Flom promoted to CEO of new group

EMI North America will merge its Capitol and Virgin labels to form the Capitol Music Group — the first significant move in EMI Group’s recently announced restructuring program.

Virgin Records chairman-CEO Jason Flom has been promoted and will head the Capitol Music Group as chairman-CEO. He will oversee the combined Capitol and Virgin rosters in the U.S.

Andy Slater, prexy-CEO of Capitol Records since 2001, has ankled his post. He had more than four years remaining on his contract.

“By bringing Capitol and Virgin into one label group, we will be better equipped than ever to promote and nurture artistic talent,” EMI Group CEO Eric Nicoli said in a statement. “We remain strongly committed to developing artists in America in all genres, as this is a key repertoire source for the world, and, to that end, we will maintain our A&R focus and keep a presence in both L.A. and New York. This structure will also allow us to further build our digital capability.”

Virgin and Capitol are the two key labels in the rock, pop and urban marketplaces. Capitol has a stronger West Coast presence, while Virgin is mostly in the East; group will be headquartered in New York.

EMI, which has the lowest market share of the big four in the U.S., will retain Capitol and Virgin as separate imprints. The labels will have dedicated promo teams, and current A&R staff levels are expected to be maintained. Overlapping functions — finance, IT, marketing, etc. — will see significant cuts.

The management team began assessing the workforce Thursday, and while pinkslips are expected to be handed out soon, a number of employees will instead see shifts in job descriptions. There was no word as to what the highest posts within Capitol and Virgin would be, nor any indication who would hold those jobs.

Since Nicoli announced the restructuring, expected to generate $217 million in annual savings, he has made moves to consolidate power at the company, first by dismissing top deputies David Munns and Alain Levy.

Slater, a producer and manager who had never run a label, came to Capitol in 2001 and was responsible for pushing Coldplay and Chingy, quickly doubling the imprints’ revenue from the previous regime.

He also oversaw successes such as Corinne Bailey Rae and the reinvention of Liz Phair as well as flops such as the Vines. Other than Coldplay and Radiohead, the label has struggled to gain any traction with Brit imports along the lines of Idlewild, the Doves and Starsailor.

Flom, a Nicoli hire in November 2005, took over from Matt Serletic, who had a dismal run. Flom came over from Atlantic Records, where Staind, Jason Mraz and Death Cab for Cutie had been delivering impressive sales figures under his watch. Before that, Flom founded Lava Records, an especially strong rock label in the 1990s with a roster led by Kid Rock and Sugar Ray.

Last year, Virgin made KT Tunstall a priority artist and spent the bulk of the year marketing her debut “Eye to the Telescope.” Disc has sold almost a million copies. Company is starting to make inroads with rock act Red Jumpsuit Apparatus.

Capitol, meanwhile, invested heavily in Rae, whose debut has topped 870,000 in sales. Virgin is priming the pump for the third Joss Stone album, while Capitol is working on the debut of another Brit import, Lily Allen. EMI’s Blue Note will release the third Norah Jones album on Tuesday.

“Jason Flom quickly demonstrated his leadership and artist development abilities since he has been at Virgin. I am confident that he will take us to new levels of success in the rock, pop and urban genres as leader of the Capitol Music Group,” Nicoli said.

Nicoli did not alter any other aspect of the reporting schedule. Most recently, Nicoli created the Blue Note Label Group to focus on the adult music buyer and not just the jazz marketplace, where Blue Note is a premier brand.

EMI has five albums in the top 50 this week, two of them catalog items. An album by Keith Urban, a Capitol Nashville artist, and the Beatles’ “Love” project are the only EMI products in the top 200 that have sold more than 1 million units.

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