London (Hypebot) – Terra Firma is privately telling investors that it will cut $223 million in fixed costs on top of existing EMI cost-saving initiatives. U.S. cuts include $31 million from sales and distribution plus merged back-office functions. There will also be significant cuts in operations in "non-strategic" countries. A&R and marketing budgets will be cut by $58 million and more emphasis put on social networks and user-generated Web sites like MySpace to discover and promote talent.
Terra Firma also claims it will improve EMI's cash flow by a whopping 766% over the next five years from an $43 million in 2007 to $1.1 billion in 2012 by creating $700 million in improved margins from online and mobile music. Terra Firma is not ruling out "large-scale transformational acquisitions/business combinations" and plans to fund a $100-$200 million pool for investments in smaller indie labels.
COMMENTARY:
Ain't gonna happen.
