New owner ousts top EMI executives

EMI's new owner, the venture capitalist Terra Firma, yesterdaystamped its presence on the big music group by paying off long-serving chief executive Eric Nicoli, and chief finance directorMartin Stewart.

Three Terra Firma partners, none of whom has experience of themusic industry, have been brought in to "maximise the value of thesignificant assets in EMI's publishing business and to realise thedigital opportunity in recorded music", the private equity housesaid.

Nicoli, who will depart with a GBP2.8m package, presided over EMIfor eight years, and yesterday's announcement is being widely seenin the industry as the price of his failure to pull off a mergerwith Warner last year that would have taken EMI into the musicindustry premier league, alongside Vivendi and Universal, and theSonyBMG joint venture.

Nicoli will be replaced by Chris Roling, formerly of chemicalsgroup ICI, where he was vice-president, finance, procurement andlogistics. He will effectively act as chief executive, reporting toTerra Firma's boss, Guy Hands, who will chair a newly-createdsupervisory board.

Also joining are Ashley Unwin, formerly of Deloitte Consulting.His role as director of business transformation will be to reviewthe performance of EMI's senior managers - in particular Roger Amesin North America, Tony Wadsworth in the UK and Jean-FrancoisCecillon in Europe.

Julie Williamson, who previously acted as fixer in Terra Firma'spub deals, will re-evaluate EMI's commercial deals and contracts.

However, Roger Faxon remains as chief executive of EMI'ssuccessful music publishing division, which is strong in the US,where the EMI stable includes songwriters such as Jay-Z and theMotown catalogue.

Nicoli's time at EMI, which has stars such as Robbie Williams,Lily Allen, the Rolling Stones and Pete Doherty's band,Babyshambles, on its books, saw the industry fall from the CD boomyears that saw fans replace vinyl with discs.

He arrived in 1999 in a blaze of glory from United Biscuits,where he invented the Yorkie bar, into the teeth of the internetexplosion, and along with it, the file sharing networks that made itpossible to swap music for free.

In order to recover, and crack the US market, he began a seriesof dalliances, first with AOL Time Warner in 2000. Then again withWarner Music last July. But neither Nicoli, nor Edgar Bronfman Jr,Warner's chairman, could decide who was taking over who, and thedeal collapsed. That was followed by a flirtation with BMG ofGermany, and then venture capitalist group Permira.

In the end Nicoli failed to break into America and couldn't pulloff that one big deal.

At the same time EMI made a number of dud bets on artists, mostnotably the 2001 GBP60m recording deal with Mariah Carey, whoproduced a f lop of an album, had a breakdown and walked out - butnot before securing a GBP20m payoff.

The group also parted company with a raft of senior executives,including Alain Levy, the man Nicoli hired to lead the recovery ofthe recorded music business. Levy who had been chairman and chiefexecutive of EMI Music since 2001, went in January with a GBP3.5mpay-off, and vice-chairman David Munns also departed. Nicoli movedfrom group executive chairman to chief executive in time to delivertwo profit warnings so far this year.

Come May this year, after poor performances had led shareholdersto wipe over GBP150m off the market cap, EMI's board recommendedthat its shareholders accept Terra Firma's GBP2.4bn takeover offer.The group is expected to be delisted on September 18.

After that, it is not only management blood-letting to beexpected, according to Patrick Yau, an analyst at BridgewellSecurities, who said: "EMI has not been able to attract enough big-selling artists. Being able to offer decent advances is one way ofachieving this."

In a statement, Hands said: "We will invest in the business toensure that it grows both organically and by acquisition. The goalis for EMI to be the world's most innovative and consumer-focusedmusic company and the best home for musical talent."