HITS Daily Double


Veteran Execs Failed to Turn Around the Struggling Last-Place Music Group During Their Five-Year Reign
In the first big story of 2007, EMI Music CEO Alain Levy and Vice Chairman David Munns were abruptly terminated on Thursday. According to one London staffer, the two executives were escorted out of company headquarters. The Financial Times broke the story after London business hours, and the company confirmed the firings Friday morning.

In making the announcement, EMI gave the details of yet another restructuring and said that EMI Group Chairman Eric Nicoli would himself run the company’s music operations.

This news was greeted with skepticism around the industry, with former Warner Music Chairman and current EMI consultant Roger Ames widely viewed as the logical person to be given the job of making the company competitive. Ames is a Brit (by way of Trinidad) and, while running WMG, he attempted to acquire EMI. There’s also talk of Ames taking on an advisory role with Nicoli, who has no hands-on experience in the music business.

Ames is one of the most digitally savvy executives in the industry, and thus particularly well equipped to ramp up EMI's digital business, which lags behind that of the rest of the Big Four.

The company said it expects to achieve 110 million pounds ($213 million) in annual cost savings from the restructuring, with 85% coming from recorded music. The plan will involve an unspecified number of job cuts, and some believe the number could be almost 20% of the company 5,000-person work force.

The removal of Levy and Munns is likely to stir debate about Nicoli's less than spectacular performance as company head, topped by his failure last year to close a deal with WMG, which went on to post the only gain in 2006 U.S. marketshare among the Big Four.

This one ain't over, not by a long shot.