Red ink flowed at British music major EMI on Tuesday, even as company brass continued efforts to turn the ship around.
EMI posted a loss of £199.5 million ($291 million) for 2001, compared to a profit of $115.4 million the previous year. Sales were down 8.5% to $3.56 billion. The slump, in line with expectations, was pegged to the poor performance of EMI Recorded Music.
The division’s sales for the year ending March 31 slipped 11.1% to $2.96 billion, and global market share declined 0.7% to 13.4%. In the U.S., EMI’s most problematic territory, market share declined 0.4% to 10.4%.
Worldwide sales for the music biz as a whole sank by 5% in calendar 2001, according to data compiled by the London-based Intl. Federation of the Phonographic Industry.
Over the past few months, EMI Recorded Music has restructured its top-level management, culled 400 artists, and cut nearly 2,000 staff — almost 20% of the workforce — in a bid to reduce costs .
Building a Levy
Moves were made by Recorded Music topper Alain Levy, who replaced chief exec Ken Berry last fall. Levy’s mandate was to set EMI back on track amid declines in market share and repeated profit warnings.
The division is negotiating to re-sign Robbie Williams, one of its most successful acts, with rumors putting the price tag at nearly $60 million.
Levy, however, has said the company would avoid big payouts following the debacle of Mariah Carey’s $100 million signing — and $55.4 million exit — from EMI’s Virgin imprint.
Carey recently re-signed to Universal Music’s Island Def Jam division for a more modest $20 million, three-album deal.
Sales at EMI Music Publishing, the most reliable financial performer in the EMI Group, were up 6.6% to $606.7 million.
EMI chairman Eric Nicoli said: “From an operating and trading perspective, the past year was especially challenging, characterized by market weakness in some regions and our own underperformance in Recorded Music.
“Our restructuring plans for Recorded Music are on track and our Music Publishing business continues to flourish. Shareholders can, therefore, expect a substantial improvement in operating performance in the year ahead.”