HITS Daily Double
UMG’s 13.4% year-over-year revenue drop has industry observers asking whether the increased corporate anxiety level will cause heir apparent Lucian Grainge to begin making moves faster than had been expected.


This Week’s Column Stars Charles Allen, Rolf Schmidt-Holtz, Lucian Grainge, Steve Berman and Edgar Bronfman Jr.
Most expected EMI to undertake a reorganization once the company had resolved its immediate financial issues with Citigroup, but to date there has been no word about such a move. This lack of decisive action puts the focus squarely on EMI Music head Charles Allen, who has kept a strangely low profile since the company got its financing, causing some to question the agenda of the former TV executive. EMI’s most pressing need is the revitalization of its U.K. A&R department, which was once the engine that powered the company worldwide through the signing and development of such breakthrough acts as Radiohead, Blur, Robbie Williams, The Verve, the Rolling Stones, Coldplay, Gorillaz and Corinne Bailey Rae. But during the Guy Hands era, the U.K. pipeline has virtually dried up, and many place the blame on the unconventional revamping of EMI Music’s infrastructure following Hands and Terra Firma’s 2007 acquisition of the company, which separated A&R and marketing, while splitting A&R itself into a U.K./North American unit under Nick Gatfield and the rest of the world under Billy Mann. The A&R department took a pair of major hits this month with the departures of U.K. veteran Chris Briggs and U.S. exec Chris Anokute. The latter, a close associate of hitmaker Dr. Luke, brought Katy Perry to the label with Angelica Cob-Baehler and A&R’d her 2008 breakthrough as well as the upcoming follow-up, including Perry’s current hit “California Gurls” (with 525k paid downloads in just two weeks). The album is expected to be one of the year’s biggest. Concurrently, rumors began to spread that Gatfield may also be jumping ship, to Sony Music U.K. EMI’s most significant artist development stories under the current regime have come out of the U.S., with the Mike Dungan-led Capitol Nashville contributing mightily via Lady Antebellum (2.1m) and Darius Rucker (1.4m), whose next release should be set up for the Lady A treatment. On the macro level, while Ronn Werre is firmly holding the reins of EMI’s North American operations, it remains unclear who possesses the expertise to lead the rest of the world. Though David Kassler, EMI’s COO outside North America, is well liked, the company’s rank and file believes that the Terra Firma alumnus’ lack of music business experience makes him under-qualified to fill this leadership position… Those recent press reports of infighting at Sony Music have thrust the spotlight Rolf Schmidt-Holtz, whose inability to meld the cultures of Sony and the former BMG has led wonderers to wonder whether Howard Stringer will offer him a new deal. If not, most believe Stringer will be hard-pressed to find any executive with the skills to heal the breach. Tom Freston was reportedly offered the job but turned it down... UMG’s 13.4% year-over-year revenue drop has industry observers asking whether the increased corporate anxiety level will cause heir apparent Lucian Grainge to begin making moves faster than had been expected, leading to questions about the nature of his agenda. As noted three months ago in Time magazine, Grainge possesses a confrontational style, having once begun a staff meeting in London by turning out the lights and stating, “This is what it’s like when you don’t have any hit records.”… Lots of chatter about Grainge’s history with UMG President/COO Zach Horowitz, who replaced the English executive as the head of MCA’s U.K. publishing division back in the 1980s... Interscope has long prided itself on not giving its executives titles, so it’s noteworthy that a photo and caption for an Eminem plaque presentation serviced by the company last week referred to Steve Berman as IGA Vice Chairman. Berman had previously been identified in trade photos as head of sales and marketing, and prior to that, simply as Big Bubba… Plenty of buzzing in label executive suites over Fred Goodman’s upcoming book Fortune’s Fool, the sequel to his critically acclaimed 1997 tome Mansion on the Hill. Advance galleys are being vetted intently by those included in the book, which essentially traces the last 20 years of the music business, with Edgar Bronfman Jr. as its focal point. The book recounts the death of Warner’s Steve Ross in 1992, precipitating a tectonic shift in power that saw “Efer” acquire Universal from Matsushita and subsequently merge it with PolyGram, then further expand his empire with the extrication of Interscope from the Warner system... Names in the Rumor Mill: Tony Wadsworth, Martin Kirkup, Rick Dobbis, Andy Lack, Charles Goldstuck, Jimmy Iovine, Michael Fuchs and Bob Krasnow.