When Brits cast their minds back to Warner Music Group’s buyout of historic UK label Parlophone in July 2013, one figure tends to come to mind: the purchase price of £487m.
However, in the light of MBW’s analysis of Lucian Grainge’s first four years as Universal boss, we’ve discovered some fresh information: the real acquisition price of Parlophone actually came in a tasty chunk higher – thanks to a further payment from WMG.
The initial £487m cash figure was handed over by Warner to Vivendi via Universal, which owned the acquired asset, ‘Parlophone Label Group’.
PLG brought catalogues into Warner from artists such as Kate Bush, Radiohead, Blur and Pink Floyd (pictured).
The European Commission forced Universal to divest PLG as a consequence of it being permitted to buy EMI Music. This £487m paid by Warner was worth €591m in the home currency of French conglomerate Vivendi.
Yet according to Vivendi, that price then subsequently increased a few months later.
“A restatement in november, 2013 took the total price paid by Warner for Parlophone to €621m, or around £515m.”
This was due to an “arbitration process in respect of contractual restatements to Parlophone Label Group’s sale price”.
As such, WMG handed over another €30m in November 2013 (worth £25m at the then-exchange rate of £0.84 = €1).
The restatement took the total amount paid by Warner Music Group to Vivendi for PLG to €621m, or around £515m.
As a consequence of this purchase, Warner promised the EC that it would further divest £100m+ of assets to the independent sector.
This process is ongoing, but still hasn’t been resolved, more than two years after it began.
Warner told the indies at the end of last year that by “mid/late Summer of 2015 we should be in a position to conclude the agreements and transfer the assets to your members.”Music Business Worldwide