Quoted from:
http://www.timesonline.co.uk'
Alain Levy, head of recorded music, insists that even if the deal with Warner fails to come off, the group is now strong enough to thrive on its own.John Arlidge reports
DON'T tell anyone about this, said Alain Levy, boss of EMI's recorded-music division, as he unlocked a black Hermès briefcase and took out an unmixed, copy-protected CD of Robbie Williams’s new album, Rudebox 1974, which will be released this autumn.
The 59-year-old Frenchman cranked up the volume and grinned like a proud father. 'This track's mixed by William Orbit, who did Ray of Light with Madonna,' he boasted. 'Robbie sings in French at the end of this one, y'know.' Levy and Williams are not related, but they do have a lot in common. A few years ago each was confronting disaster.
Williams was battling drug addiction. Levy was struggling to save a firm that was so badly run it was nicknamed 'Every Mistake Imaginable'.
What a difference a few years make. Robbie Williams is 'clean' and Rudebox 1974, which marks a Madonna-style conversion from rock to electronica, looks a sure-fire No 1.
Levy, too, has his eye on the top spot, in the business charts. EMI's bid to take over Warner Music is designed to create a company with the best new artists and the best back catalogue. 'It's a fantastic way to build a future ... and become the best music company in the world,' he said.
The proposed Anglo- American outfit would boast Madonna, Coldplay, Robbie Williams, Kylie Minogue, Norah Jones, Green Day and the Pet Shop Boys. The back catalogue would include the collected works of the Beatles and the Eagles.
The only problem is that ever since Levy and EMI chairman Eric Nicoli unveiled the bid, it has created enough angst to inspire a Coldplay box-set. Last week's unexpected ruling by the European Court of First Instance that annulled the decision by the European Commission, Europe's competition regulator, to approve the creation of Sony BMG two years ago is just the latest in a long line of setbacks.
Almost immediately after EMI launched its bid, Warner responded by making a counter offer of its own for EMI, which rejected the bid and raised its offer. Warner rejected the revised bid and raised its offer.
As the transatlantic bidding war intensified, rumours began to spread that Warner boss Edgar Bronfman had offered EMI’s chairman, Eric Nicoli, a job in any combined company but had frozen out Levy. The two men had fallen out almost a decade ago when Bronfman led the acquisition of PolyGram, Levy's former firm.
But however bad it gets - Levy conceded that the European ruling could make it impossible to convince the European Commission to approve a deal - he refuses to give up. In his Kensington office last week, only minutes after the European court ruling was published, he set about trying to smooth relations between EMI and Warner.
He dismissed as 'utter nonsense' reports that Nicoli would stay on after any US takeover, while he would be forced to quit. 'There has been no discussion like that,' he said. When he first heard the rumours he thought they were so funny that he e-mailed Nicoli to tell him he'd heard that he, Nicoli, had got a job as Bronfman's chauffeur.
Levy pooh-poohed claims that he and Bronfman could not work together after the latter's 1998 purchase of PolyGram. 'To see it as a big fight of two egos, that's total nonsense.'
He conceded that the personal chemistry between the pair had 'not been right' after the PolyGram sale. They had “hours of discussions” after the deal was signed and Bronfman offered him a job, as the head of music in the new joint company. 'But I felt that I would be miserable and he probably would be miserable and it would end in tears.'
Levy quit instead and joined EMI’s recorded-music division in 2001.
He insisted that his relationship with Bronfman was amicable. 'He might have changed since. I might have changed since. I see Edgar socially at functions and we talk, absolutely. Have we ever said anything bad about each other? No.'
Far from quitting, Levy hinted that he would like to be head of music in any new Anglo-American outfit.
'Would I like to be here for the next five years continuing to build what I have built out of something that was in pretty bad shape? I have a total passion for my job.'
Although EMI made the first move in the transatlantic takeover battle, tabling a bid for Warner at $28.50 a share, later revised upward to $31, valuing the company at £2.5 billion, Levy said that if a Warner takeover of EMI created greater shareholder value than an EMI takeover of Warner, he would support it.
'I am paid to create shareholder value, but the price has to be right. What Warner can't do is try to buy us on the cheap.'
EMI directors are said to have dismissed Warner's offers of 310p and 315p a share, that value EMI at £2.6 billion, as laughable. 'We certainly would not write that word but it might have been said,' Levy said with a smile.
Five years ago EMI looked like it might have to merge with the likes of Warner to stave off bankruptcy. In common with the music industry as a whole, it was struggling to cope with illegal digital downloads, CD piracy and falling CD and singles sales. It was overstaffed, and budgets were, by Levy’s own admission, bloated. Between January 2000 and September 2001 the company lost 65% of its market value.
After firing 1,800 staff and 400 artists, slashing £150m off the company's annualised fixed costs and cracking down on illegal downloading while embracing new legal digital distribution systems - notably Itunes and Napster, ringtones for mobile phones and soundtracks for computer games - EMI’s revenues returned to growth last year for the first time since 2000.
Like the music industry in general, EMI is now, Levy said, out of the woods. 'We have taken the lesson that you cannot ignore the consumer. There is a business model. People want more music. But they want the music in different ways. We have to find ways to monetise it.'
A Warner/EMI deal would speed the company’s recovery by cutting £200m of back- office costs from the new business and expanding the artist repertoire, particularly in the US where EMI has been weak until recently. But even if the deal with its new dance partner does fall through, Levy insists that EMI will still thrive.
'A deal would create value but, if it doesn’t happen, we'll create value in a different way to become the best music company in the world. There's nothing structurally wrong. We have a 14% market share, so we are sitting at the top table.'
And EMI can bring some of the world's best talent to that table. Last month Levy took Kylie to Elton John’s White Tie and Tiara Ball to celebrate the Australian singer's comeback after successfully battling breast cancer.
'She is back in the studio recording and is starting her tour where she left it. I told her I might go, but her manager said he might not be able to get me tickets.' Does he have a secret CD of Kylie's he can play, like that of Robbie Williams? 'It's too early,' he said. 'She' gone through a hell of an experience but she is at the top of her form, I can tell you.'
Whatever happens in the transatlantic takeover saga that has already had more comebacks than The Who, you get the feeling that Levy will still be sitting in his Kensington office playing his Robbie and Kylie CDs and grinning like a doting dad.'
