Universal Music Iberian Peninsula (Spain & Portugal) has purchased Spain's biggest independent label, Vale Music, from its founder Ricardo Campoy. Universal says the development, unveiled today (J
Universal Music Iberian Peninsula (Spain & Portugal) has purchased Spain's biggest independent label, Vale Music, from its founder Ricardo Campoy. Universal says the development, unveiled today (June 22), will boost its local A&R presence.
The news comes just two days after Marcelo Castello Branco's exit as president Universal Music Iberian Peninsula. Castello Branco was not involved in the Vale acquisition talks, and the two developments are not directly connected, said Jesús López, Miami-based chairman of Universal Music Latin America & Iberian Peninsula. López was speaking from his Madrid office where he expects to be based for several months until a replacement is found.
Vale Music signed the successful artists from the world's first major TV reality show success, Operación Triunfo (Operation Triumph), which launched several stars including David Bisbal, Bustamante and Rosa. Vale Music artist Bustamante entered Spain's Media Control album charts at No. 1 yesterday (June 21) with "Pentimiento." Vale Music artists Rosa's "Me Siento Viva", David Civera's "Ni El Primero Ni El Ultimo," and self-titled Orquesta Mira Quien Baile are at No. 3, No. 9 and No. 10, respectively.
Vale Music was Spain's 5th biggest label in 2005 with a 10.96% market share, according to labels' body Promusicae. Together with Universal's 16.94%, the labels have a combined share of 27.90%, just ahead of leader Sony BMG's 27.22%.
López says the Vale purchase "is not aimed at increasing market share as such or cutting costs...but to increase our local product." He said job losses would be minimal and involve back office only.
"Vale has a proven track record and can clearly remedy a local A&R problem that Universal has in Spain. We have a good catalog and classics department, but need to improve our local product, which is Vale's speciality. Vale Music product is tremendously exportable in Latin America, for example."
Universal Music Group says in a statement released today that the strategic acquisition will "bolster UMG's strength in the €1.8 billion ($2.27 billion) market for Spanish-language repertoire".
But López stresses that the Vale purchase is the start of a global strategy to acquire front-line indies in several world markets where local product and A&R profile needs to be boosted. "Vale Music is the first purchase in this new policy, but it will not be the last," López says. "Five years ago Universal set about improving its serious financial situation. Now the focus is on A&R and local product." He says this policy is spearheaded by Doug Morris, CEO of UMG in New York; Lucian Grainge, chairman/CEO of UMG International in London; and Pascal Negre, president of UMGI's Mediterranean, South America & Middle East regions in Paris.
Terms of the transaction were not disclosed. López describes industry rumors in Madrid that Universal paid €47 million ($59 million) for Vale Music as "not accurate."
Negre says, "Vale Music is an amazing success story, it is a pioneering label."
Campoy says "our uniqueness is the passion of our ideas, and that's why the label is a dynamic, creative force in talent and music in Spain. Now, in partnership with Universal, we are ready to propel Vale Music and out artists into the international marketplace."
Vale Music began in 1997 as a dance music and compilation specialist, and it cornered Operation Triumph artist CD sales from 2000. These sales worldwide have totalled 10 million in solo-artist albums and four million in compilation albums. David Bisbal alone has sold four million copies of his first two Vale Music albums, which for the past three years have been licensed to Universal for sales outside Spain.
Vale will continue to operate as a separate company from its Barcelona offices. Campoy and two senior executives will continue as president and respective VPs for five years under the terms of the acquisition.