HITS Daily Double

Parlophone on the block

THE TIPPING POINT? As I.B. Bad noted in his latest column, which posted this morning, some are spinning that the assets UMG will have to divest in order to gain approval from the EC for its purchase of EMI Music may impact the economics of the acquisition in a dramatically negative way. Or, as he put it in his previous column two weeks ago, when does a good deal become a not so good deal? In that sense, what do we make of the change in strategy we told you about yesterday involving the divestment of active label Parlophone, with BMG Rights Management as the likely buyer (see item below), which has been confirmed by the Financial Times? According to Wall Street Journal sources, the shift occurred earlier this week when the EC indicated that selling Virgin and other dormant labels wouldn't be enough to restore balance in the market. Instead, they wanted Universal to find ways to move current acts to competing labels. Universal executives initially resisted that demand, according to people familiar with the matter, saying it amounted to treating artists like "secondhand cars." But it now appears that they had no choice. (7/27a)