I.B. BAD: A KERFUFFLE IN LONDON

With EMI’s survival incumbent on Guy Hands’ chances of raising enough money to prevent a takeover by Citigroup—which some still believe he may be able to do—it now appears that the Charles Allen-led EMI board and Terra Firma brass have conflicting agendas.

What Allen and the board have reportedly been discussing with UMG (namely, Lucian Grainge and his team) and Sony is a distribution deal along the lines of Disney’s arrangement with Universal—an outcome that would enable EMI to continue in the major territories as a full-service operation encompassing A&R and marketing (including sales and promotion).

At the same time, Terra Firma has been exploring the concept of a series of licensing deals, which in all likelihood would result in the radical reorganization of EMI Music, which would negatively impact head count far more than would a distribution scenario.

In reality, it’s generally assumed that the EMI board has a fiduciary responsibility to make sure that any deal made by Terra Firma is in the best interests of EMI.

One key issue facing Allen is that their potential distribution partners want an assurance that Citi won’t take over the company and sell the recorded music operation to another entity such as KKR or Warner Music—the latter company sitting out these negotiations, presumably in hopes that the prize Edgar Bronfman has long sought will eventually fall in his lap. Hands is trying to raise enough money to keep EMI solvent for the next five years, so that any potential deal will be ironclad for both parties.

The wild card is Roger Ames, who could conceivably be recruited by Allen to apply his considerable expertise to the situation, or by his former associate Dick Parsons should Citi wind up with EMI. Another possibility has Ames putting together a group of investors to buy the company.

As the maneuvering continues, Lady Antebellum has moved nearly 2 million units in three months, and the buzz is starting for the follow-up to Katy Perry’s 2008 debut LP, which sold 1.22m in the U.S. As with any Pop release, Perry’s album will go as far as its hit singles take it.