EMI stands to keep the rights to hits by The Beatles for another 20 years, after a Brussels committee agreed to extend copyright protection for sound recordings across Europe from 50 to 70 years.
The recommendation, which is likely to be approved by the Council of Ministers on Monday, falls short of the 95-year term the music industry lobbied for, but will benefit all music companies. The move could help Citigroup as the US bank seeks to sell EMI, which it seized from Guy Hands’ Terra Firma group in February.
The Beatles first hit, Love Me Do from 1962, would have gone into the public domain next year. The Rolling Stones signed with Decca Records, now part of Universal Music, the same year, and the extension will affect artists ranging from Elvis Presley to Edith Piaf.
EMI has repackaged The Beatles’ music numerous times, but has not disclosed how much of its revenues come from its 1960s hits. Industry analysts said the copyright change would have a small but positive effect on its valuation.
Citigroup is expected to ask for second round bids for EMI by late September, with bids expected in a range of $3bn to $4bn. “If I was Citibank, the price just went up,” said Michael Sukin, an attorney who has represented the music industry’s case for term extension for over 12 years. “The catalogues of the major companies will become more valuable than they were yesterday.”
Valuations of EMI have been swayed by factors ranging from calculations over EMI’s pension and lease obligations to bidders’ outlook for digital music services such as Spotify and their assumptions about credit markets.Last Updated: 09/09/11 07:57