An adviser to Guy Hands, speaking privately this time last year:
They think there are people with ‘magic ears! (guffaws) They believe they have people who can spot talent. They don’t know how to use market research or anything like that…All I can tell you is that Guy will be cutting a lot more cost out of that business than has so far been indicated publicly…
It is probably fair to say that the Terra Firma boss knew very little about the music industry when he spent £4bn taking EMI over in the summer of last year.
And it is probably right to assume now that Mr Hands is having to cut a lot deeper and quicker than even he anticipated.
Two of EMI’s top executives put in by Terra Firma, Chris Roling and Ashley Unwin, have now been ousted, and the private equity house has been forced to inject more capital into the music business to stop it breaching banking covenants.
Mr Unwin was “managing director of talent.” The status of his ears is unknown.
What is faintly amusing is that if things deteriorate further at EMI, US taxpayers might well end up owning the assets. The £2.6bn of debt provided by Citigroup to help fund the deal was sitting in the bank’s leveraged loan portfolio - and that has now been underwritten by the Federal Reserve.
Related link:
Terra Firma loses string of executives seconded to EMI - Telegraph
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