If the consortium led by Sony Corp. of America gets approval to acquire EMI Music Publishing, it would cut 326 positions over two years to achieve $70 million in net cost savings, according to a story by Ben Sisario published in the New York Times.

That story--based on a copy of the prospectus obtained by the newspaper, issued to raise $1.15 billion to help finance the planned $2.2 billion acquisition of EMI--says that the EMI work force would be reduced by 142 people within the first year of ownership and 174 would be let go after serving on a transitional basis. That would leave 189 EMI staffers with jobs.

Neither Sony nor EMI Music publishing could be reached for comment at press time.

As has been previously reported, Sony/ATV would serve as the administrator for the EMI publishing assets, which would be maintained in a separate company since it has a different ownership structure than Sony/ATV.

Sony/EMI Deal: Publishing Companies Would Remain Separate, But Managed by Sony

The latter company is a joint venture between Sony Corp. of America and the Michael Jackson estate and Sony/ATV itself would have a 38% stake in EMI Music Publishing if the regulatory agency approval of the acquisition is given. The other investors participating in the proposed purchase of EMI Music Publishing are: Mubadala Development Company PJSC; Jynwel Capital Limited; the Blackstone Group's GSO Capital Partners LP; and David Geffen.

Earlier this month, Sony/ATV offered to sell publishing assets worth $20 million in royalties, according to a Reuters article, in an attempt to get the EU to approve the transaction without having to face second stage scrutiny like Universal Music Group's proposed $1.9 billion acquisition of EMI recorded music operation. The EU regulatory commissioners are expected to announce tomorrow whether they are approving the deal; or will take a longer second phase look at the deal like they did with Universal Music Group's attempt to acquire EMI's muusic assets which has been pushed from March to what will likely be August of this year.

European Commission Investigation Into Universal's Purchase of EMI Music Enters Phase Two

While the planned cutbacks would achieve a total of $120 million in savings, as the administrator of EMI Music Publishing Sony/ATV would be paid $50 million, based on the traditional 15% administration fee, which would be based on net publisher's share.

Extrapolating out that $50 million admin fee means that EMI Music Publishing produced $344 million in net publisher's share in its most recent fiscal year.

In its most recently available public numbers for the year ended March 30 2010, EMI Music Publishing reported about $760 million in revenue with earnings before interest, depreciation and administration of $239 million.

Sony/ATV Offers Unspecified Concessions to European Union in EMI Music Publishing Deal

Based on the $120 million in savings the Sony-led consortium anticipate by the layoffs, that means that EMI's EBITDA for its most recent fiscal year ended March 30, 2011 was about $224 million.

With EMI Music Publishing having between 40-50 creative people on its staff means tthe Sony-led consortium will also keep some licensing and other business deal makers from the EMI staff. Some of the retained staffers would likely help Sony/ATV deal with the added volume it would be handling. Sony itself is under pressure to reduce it's own staff, according to press reports about a planned 10% staff reduction.

Billboard estimates Sony/ATV's revenue at about $500 million annually, which means that the combined portfolios they will be overseeing will have about $1.261 billion in annual revenue.

According to financial reports, Universal Music Publishing has annual revenue of about $898 million while Warner/Chappell's annual revenue total is about $544 million.

Universal Music's EMI Acquisition Supported by SAG-AFTRA, AFM

Meanwhile, in the prospectus, according to the New York Times story, the combined Sony/ATV and EMI Music Publishing portfolios would own 31% of the music publishing market place.

That implies a worldwide music publishing revenue of about $4 billion. Under that assumption, that means that the majors combined own nearly 68% of the music publishing marketplace, which is roughly in line, if a little high, with the commonly-held industry view that those publishers represent about 60% of the market.

But according to an analysis of the IFPI estimate of 2010 publishing revenues written by Will Page and Bruce Dickinson, global music publishing revenue totaled $9 billion in that year. If that number is accurate, Sony/ATV and EMI would have 14% of the global market, while the majors would have 30% of the market.

Its unclear why there is an apparent discrepancy between the IFPI global publishing estimate and the numbers used in the prospectus to raise funding for the EMI Music Publishing acquisition.

In any event, a number of organizations and independent music company groups, including IMPALA and A2IM, have aligned opposing the deal while yesterday SAG-AFTRA and the American Federation of Musicians today gave their conditional backing to the EMI deal.