German independent labels body VUT today (March 1) confirmed its formal backing to the agreement between Warner Music Group and pan-European labels body Impala which has sparked heated debate within the independent sector.
The Impala/WMG agreement, announced Feb. 20, stated that Impala would support a proposed acquisition of EMI by the U.S.-based major. In return, WMG would help fund the independent sector’s global digital rights licensing platform, Merlin, and divest unspecified recorded music assets to indies.
VUT president Mark Chung says the German body’s management board came to its majority decision at a meeting in Berlin on Feb 28, although VUT did not announce it until 24 hours later. Chung says the as-yet confidential details of the WMG/Impala agreement fulfil Impala’s demands regarding the circumstances of the merger and the transparency of specific financial aspects.
In the United Kingdom, two members of Impala-affiliated national indie labels body AIM have resigned in protest over the agreement. Aim is due to formulate its own official stance towards the pact at a meeting on March 6. According to VUT, none of its members have threatened resignation over the issue.
Chung admits that debate on the agreement had been heated, adding that WMG’s financing of Merlin was an important element in gaining VUT’s backing. “It goes without saying that considerable funds are required to make Merlin powerful and effective”, he says.
However, Chung also insists that VUT “would have accepted this contract even without the financial support.” WMG, he says, “accepts a model in which the independents are strong, competitive players in the market and therefore better partners.”
