Page last updated at 19:40 GMT, Thursday, 4 February 2010

EMI reports 1.75bn annual loss

Sign outside EMI offices in London
EMI relies heavily on its back catalogue

Record company EMI has reported an annual pre-tax loss of £1.75bn in the year to 31 March 2009 amid continued fears over the state of its finances.

The results for EMI, which has deals with Robbie Williams and Coldplay, include more than £1bn in write-offs.

The firm has been hit by illegal downloading and the move away from album sales to single digital tracks.

EMI is at the centre of a legal dispute between private equity owner Terra Firma and US bank Citigroup.

Terra Firma is seeking billions in damages linked to its £4bn purchase of EMI in 2007.

It accuses the bank of inflating the price of the firm by not revealing that the only other bidder, Cerberus Capital Management, had withdrawn.

Every single cent of Terra Firma's equity has been wiped out.
Robert Peston
BBC Business Editor

Citigroup is contesting the claim, saying it will defend its role in the proceedings "vigorously".

Shortfall

EMI is now the smallest of the four major record labels, and has launched a turn-around plan to try to cut costs and boosting internet sales to compete against the likes of Universal and Warner.

It has also cut about 2,000 jobs but lost some of its acts, including Radiohead, in the row that followed.

BBC business editor Robert Peston said the results showed "one of the biggest ever losses on a private equity investment".

EMI was sold at the height of the private equity buyout bubble in 2007. The business has been battered by its high debt levels and a weak performance as record companies struggle to make cash .

The group warned of a "likely significant" shortfall when it had to meet covenants on its £2.6bn debt at the end of March 2010.

Excluding its huge one-off write-offs, EMI saw operating profits of £143m, compared with £101m the previous year.



Print Sponsor


MUSIC RETAILING

Promotional logo for Stuff Market Place Stuff happens
What comes next when record shops close down?

Beatles box set, USB edition Beatles boom
Why is troubled EMI still dependent upon old music?

Rare Turkish music album reissued by Finders Keepers Records Lost tunes
Rare music sleuths make a monkey of the major labels

White vinyl single coming off the presses at the Portalspace factory in Hayes, Middlesex Revived 45
The seven-inch vinyl single marks its 60th anniversary
MORE FEATURES
 
KEY NEWS STORIES

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites

FROM OTHER NEWS SITES
Financial TimesDebt woes undermine EMI's chart success - 8 hrs ago
The Scotsman Terry Murden: Toyota has to fix that drip, drip, drip of bad news - 10 hrs ago
Times Online My status as tax exile is no sham, says Hands - 12 hrs ago
Guardian.co.uk Debt crisis leaves private equity to bite the bullet - 14 hrs ago
New York Times EMI Posts $2.4 Billion Operating Loss - 22 hrs ago
* Requires registration



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC navigation

BBC © 2013 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific