HITS Daily Double
When the IMPALA press release hit the wires, the question on everyone’s lips was, how could the association possibly justify its fervent opposition to one merger of major labels while wholeheartedly endorsing another?


Strange Bedfellows' Improbable Coupling Continues to Send Shockwaves Throughout Indie Label Land, Industry as a Whole
One of the more bizarre occurrences of recent weeks was the endorsement of a Warner Music-EMI combination on the part of international indie trade association IMPALA, whose complaints about the Sony BMG merger last summer led to the EC’s reexamination of the arrangement—the irony being that WMG and EMI called off their previous negotiations as a direct result of IMPALA’s actions.

Things got even weirder yesterday, when IMPALA reiterated its opposition to Sony BMG on the heels of the EC’s announcement that it will spend up to four months reexamining the implications of the merger before either approving or annulling it. When the IMPALA press release hit the wires, dumbfounded industry watchers asked, how could the association possibly justify its fervent opposition to one merger of major labels while wholeheartedly endorsing another? That, of course, is the 64-euro question.

Remarkably, the release didn’t even try to resolve this apparent contradiction. IMPALA Chairman Martin Mills insisted that “IMPALA’s position remains consistent: mergers without appropriate remedies are unacceptable and always have been,” while President Patrick Zelnik said, cryptically, “We will…be urging the Commission to take into account the recent acknowledgement by Warner that concentration in music causes serious problems and needs serious solutions.” The widespread reaction to these statements is that they seem intended to obscure the facts rather than clarifying them.

Stunned by the announcement of this unlikely marriage when the news broke last Thursday (2/22), British indie labels Ministry of Sound and Gut resigned from IMPALA’s U.K. affiliate, AIM, in protest, with the former demanding answers in a Feb. 28 letter to the London-based trade group. Among other things, MoS wants to know why IMPALA chose to go against the fundamental interests of the labels it represents, and why the decision to endorse the merger was made without the knowledge or involvement of its membership; additionally, it has asked to see all documents and correspondence generated by the negotiations between IMPALA and WMG. The letter also asserts that damages to the indies resulting from a WMG-EMI hook-up would exceed $100 million.

While many remained stunned by this union of previously hostile parties, others are giving credit to WMG for pulling off a very slick move indeed. Everyone in Britain now wants to know which functionary at WMG U.K. came up with the idea and what really went down, with many theorizing that IMPALA and Chairman Martin Mills fell for empty promises.

And in yet another irony, releases from Mills’ Beggars Group of labels are distributed in the U.S. by WMG’s own ADA.