Senate Panel Set to Review Universal Music-EMI Deal

Top executives from the music industry are scheduled to visit Washington Thursday to testify about Universal Music Group’s proposed purchase of EMI.

The deal would merge two of the big 4 music companies – a consolidation that has drawn criticism from competitors and consumer groups.

As our chart below shows, the music distributors, parent companies and lobby firms include some Washington powerhouses. (An interactive version can be found on Muckety.)

Big 4 music companies

Citigroup, which acquired EMI after it defaulted on loans, agreed in November to sell the record labels to Universal Music for $1.9 billion. It signed a separate deal with Sony Corp. to sell off EMI’s publishing unit.

The Universal-EMI merger is being reviewed by the Federal Trade Commission and the European Union, as well as by the Senate antitrust subcommittee.

Among those scheduled to appear before the Senate subcommittee are Lucian Grainge, chairman and CEO of Universal Music Group; EMI chief Roger C. Faxon; Irving L. Azoff, head of Live Nation Entertainment; and Edgar Bronfman, Jr., former chairman and a current director of Warner Music Group.

Bronfman, a billionaire who sold Warner Music to Access Industries last year, has pledged to lobby against the merger, both in the U.S. and in Europe.

“Warner is going to fight this tooth and nail,” he said at a January media conference.

Last week, two groups, the Consumer Federation of America and Public Knowledge, sent a report to the Federal Trade Commission, arguing that the deal would limit competition.

Anticipating an opposition drive, Universal has signed up with two additional shops in the past two months: Capital Hill Strategies and Podesta Group. It already had a contract with Bingham McCutcheon.

This table shows lobby expenditures for major players:

Company 2012 Q1 2011 Connection
Citigroup $1,520,000 $5,470,000 owner of EMI
Universal Music Group $980,000 $3,670,000 proposed buyer
Sony Corp. $917,000 $3,610,000 parent of Sony Music
Warner Music Group $360,272 $440,000 subsid of Access Industries
Access Industries $60,000 $240,000 parent of Warner Music
Live Nation Entertainment $55,000 $220,000 strategic partner of Universal
Future of Music Coalition $20,000 $80,000 artists group
Consumer Federation of America $10,000 $60,000 consumer group
Public Knowledge $0 $10,000 consumer group
Total $3,922,272 $13,802,011

Sources: First Street, Center for Responsive Politics, U.S. Senate Office of Public Records

Several members of the Senate subcommittee have received campaign donations from companies interested in the outcome of the hearings. The following table shows all the members and contributions reported thus far in the 2012 electon cycle:

Member Universal Music Citigroup Warner Music Vivendi Edgar Bronfman Jr.
Herb Kohl (D-WI) (chair)
Chuck Schumer (D-NY) $500
Amy Klobuchar (D-MN) $1,500 $1,000 $7,779 $1,000
Al Franken (D-MN)
Richard Blumenthal (D-CT) $2,000 $2,000
Michael S. Lee (R-UT)
Chuck Grassley (R-IA)
John Cornyn (R-TX) $1,000

Sources: Federal Election Commission, Center for Responsive Politics

Follow Laurie Bennett on Twitter: @Muckety.


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