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Thursday, April 7, 2016

Finally, after three long years, the indies are getting what's theirs


Written by Tim Ingham — 37 months. 1141 days. 99 million seconds.

That’s how long independent labels have been waiting since it was announced they would receive $200m+ of recorded music assets from Warner Music Group in February 2013.

The deal, agreed between Warner and Merlin/IMPALA, was a result of the major’s purchase of Parlophone Label Group (PLG) – an acquisition which was cleared in the summer of that year.

The pledged assets, which have been bid on by indies over the past three years, are believed to comprise around a third of the value of Warner’s £487m ($765m) buyout of PLG.

However, the process has not been plain sailing.

A year ago, MBW published an email in which a senior Warner exec admitted that the major was “50 times oversubscribed”.

They revealed that 140 independent businesses had bid for more than 11,000 artists and catalogues by the end of 2014.

Finally, though, the finishing line is now in sight.

“WE EXPECT TO MAKE A JOINT ANNOUNCEMENT WITH IMPALA/MERLIN IN DUE COURSE.”

WARNER SPOKESPERSON

A Warner Music Group spokesperson told MBW today: “We are making good progress with the voluntary divestment process that Impala/Merlin and WMG agreed as part of our acquisition of Parlophone Label Group.

“Numerous independent labels are involved in these negotiations and we are not commenting on individual deals at this stage.

“We expect to make a joint announcement with Impala/Merlin in due course.”

Why is anticipation swirling around that joint announcement?

Because those ‘individual deals’ may or may not include Beggars/XL’s purchase of Radiohead’s classic catalogue – an acquisition which has just been publicly confirmed.

A collection of Radiohead B-sides and bonus tracks have this week been removed from Spotify, Apple Music and more services, while the basic versions of classic albums such as OK Computer (1997), The Bends (1995) and Kid A (2000) are now listed as (c) XL Recordings.

A spokesperson for XL confirmed the catalogue acquisition to MBW, but did not comment on whether the deal was related to Warner’s divestments.

“This is the first step in the transfer of Radiohead’s back catalogue from Parlophone to XL,” they said.

“The main albums are being made available in their original form as a start, before non-LP material is reconfigured.”

The purchase of Radiohead’s classic albums brings together the band’s catalogue at XL, which had already issued 2007’s In Rainbows and 2011’s King Of Limbs outside North America. (XL also released Thom Yorke’s debut album, The Eraser, in 2006, and side project Amok by Atoms For Peace in 2013).

The complicated three-year Warner divestment process, meanwhile, has been overseen by lawyer / mediator John Kennedy.

Initially, the indies were expected to strike a range of purchase, license and distribution deals to get their hands on the assets, but MBW understands that the vast majority of agreements now in place will involve an out-and-out sale.

Inevitably, with only a limited number of assets to go round, and many more independents bidding for catalogue than could ever be satisfied, you can expect some fallout from the process to emerge in the coming weeks and months – especially from those parties who have missed out entirely.

“THIS IS THE FIRST STEP IN THE TRANSFER OF RADIOHEAD’S BACK CATALOGUE FROM PARLOPHONE TO XL.”

XL SPOKESPERSON, EXPLAINING WHY CERTAIN TRACKS ARE NO LONGER ON STREAMING SERVICES

In fact, the path to Warner’s divestments has been so rocky, some simply didn’t believe a conclusion would ever be possible.

The referenced email from a senior Warner exec, dated Christmas 2014, told the indies:

“Coming up with revenue figures and valuation ranges for such a large number of artists and catalogues was an enormous task.

“Coupled to that is the need for us to carry out at least basic due diligence on the respective artist and catalogue agreements to check for issues of transferability.”

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