The official details of the EMI restructuring reported last night are out. The spin from the top: the company is “delayering” to streamline the management structure “particularly within the developing digital landscape.” Release. Other changes include:
—“Extracting revenue and cost synergies between recorded music and music publishing”
—“Strengthening EMI’s digital and consumer marketing capabilities”
And so on ... what does this mean in plain English?
—As reported last night, Alain Levy and David Munns are out, effective immediately. Eric Nicoli becomes CEO of EMI Group. He assumes direct operating responsibility for EMI Music. In other words, no one left to blame.
—John Gildersleeve the non-executive deputy chairman becomes non-executive chairman of EMI Group.
—EMI Group CFO Martin Stewart adds finance responsibiulity for EMI Music.
—Cuts across regions. More sharing of services across divisions and regions.
—The company says it can produce an additional £110 million ($214 million) in annual savings. The restructuring cost is estimated to be no more than £150 million ($292 million).
Also as expected, the announcement included an earnings warning—following initial guidance that it would hit its targets. That projected strong second half thudded instead witjn revenue expected to fall 6-10 percent.
Reuters: Nicoli on the conference call: ““We have now had seven consecutive years of decline in the recorded music market.” EMI needs to strengthen digital music sales, he added. Nicoli said 85 percent of the cuts would come from the recorded music business.