Duet long in the making
It took 11 years and a job change or two, but Dick Parsons finally has EMI.
EMI was taken over on Tuesday by Citigroup, where the former Time Warner chairman now serves as non-executive chairman.
In 1999, when Parsons was serving as president of Time Warner, he began to aggressively pursue a merger between the company’s Warner Music unit and EMI. The story goes that Parsons and Warner Music topper Roger Ames tracked down CEO Gerald Levin in one of the most remote areas of China on the Tarim Basin oasis and over beers convinced him that the merger made sense. Levin gave the go-ahead, and Parsons and Ames worked tirelessly over the next few months.
But Levin had other ideas as well. In January 2000, he and AOL chairman Steve Case surprised the world when they announced that the Internet company would buy Time Warner. A few weeks later Parsons announced a $20 billion merger between Warner Music and EMI.
But Time Warner scrapped the potential merger in October 2000 after it looked like it would face a big challenge from regulators in Europe. Parsons was said to have been crushed. A jazz buff, he was always proud of the music operation at Time Warner. In addition, Levin was apparently convinced that TW would not be able to gain regulatory approval for two deals, and for him, the AOL combo made more sense. That deal won approvals in January 2001. Of course, history proved Levin’s choice to be misguided, resulting in one of the worst mergers ever.
In 2003, with Time Warner carrying a mountain of debt, Parsons, who’d taken over as CEO from Levin, was forced to sell his beloved Warner Music for $2.6 billion to a group led by Seagram heir Edgar Bronfman Jr. and private equity firms.
Of course, the last business Citigroup will want to be in is music, and it will certainly look to sell EMI, either recorded music and publishing together or separately. Warner Music, which has had several merger dalliances with EMI since the Time Warner sale to no avail, is the most likely interested buyer. For Parsons, it puts him in an interesting situation. In addition to his role at Citigroup, he is a senior adviser to the Providence Equity Group, one of Warner Music’s backers.
Parsons declined comment through an email Tuesday.