NEW YORK — Marking the second high-dollar deal for music-publishing assets in a month, EMI plans to buy the rest of Motown publishing catalog Jobete by early 2003, chairman Eric Nicoli said at the British music major’s annual general meeting Friday in London.
Exact terms for the purchase weren’t disclosed, but industry sources said the other half of the storied Motown-related catalog could fetch close to $200 million.
EMI paid more than $130 million to acquire its first 50% interest in Jobete from Motown founder Berry Gordy five years ago, a deal that included an option to acquire the remaining stake for a pre-set multiple of “net publisher’s share” — or annual revenues — within five years. Jobete takes in $15 million to $20 million each year.
The prize for EMI is a highly lucrative songbook of Motown classics, including “I Heard It Through the Grapevine,” “My Girl” and “I’ll Be There.” Among the legendary songwriters represented in the Jobete catalog are Holland-Dozier-Holland, Smoky Robinson and Marvin Gaye.
Major-label giants such as EMI are increasingly looking toward the steady, predictable income streams from their vast publishing catalogs to help them ride out a sharp downturn in record sales that shows no signs of abating soon.
EMI’s publishing unit, the largest in the world, was the lone bright spot on the conglom’s otherwise dismal 2001 financial results, boosting sales by 6.6% to more than $600 million even as revenues at EMI’s recorded music division sank more than 11%.
Earlier this month, Sony Music also jumped on the publishing bandwagon: Its Sony/ATV Music Publishing unit paid Gaylord Entertainment a hefty $157 million for the storied Acuff-Rose country music songbook, which boasts more than 55,000 tunes.
Also at Friday’s annual meeting, Nicoli affirmed the company’s targets for its 2002 revenue performance (flat revenues for recorded music; single-digit growth for publishing) and said cost-savings initiatives were on track as well. EMI is in the process of a massive restructuring, including 1,800 layoffs, to streamline operations and boost sagging profits.
In addition EMI named another director to its board. Romanian-born Peter Georgescu, chairman emeritus of ad firm Young & Rubicam, will sign on Sept. 1, replacing seven-year board veteran Hugh Jenkins, who retired Friday.