Terra Firma Writes Off $1.7 Billion In EMI Investment

LONDON (Hypebot) – IS THAT LOW ENOUGH?

EMI owner Terra Firma has written off half of its €2.6B ($3.3B US) investment in the music group. The "impairment" shows that the private equity firm and its head Guy Hands believe that they have little chance of ever recovering their investment. Many other equity firms are also devaluing investments at a time when the global economy shows no signs of a turnaround.

But further write offs may be necessary. By comparison, Media Memo points out that Warner Music Group stock has fallen 86% to a mere $1.86 cents a share since August 2007 when Terra Firma beat WMG to purchase EMI.

EMI EARNINGS RISE AS A&R TAKES BACK SEAT

Thanks to aggressive cost cutting, EMI's earnings for the last 9 months of 2008 rose from £12M to £104M before interest, tax, depreciation and amortization. Earnings in the music publishing division incr¬eased from £81M to £91M.

But apparently artist development, the lifeblood of most record labels, is not at the core of the EMI turnaround strategy. In a hint of things to come, Terra Firma said in its gloomy annual report that EMI would be even "more selective" in its signings.

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