Slater Out As Flom Heads Combined Capital & Virgin U.S. Layoffs Loom.
EMI Group today announced the company is merger of its Capitol
and Virgin labels to form The Capitol
Music Group, a front line pop, rock and
urban label group. Jason
Flom has been promoted to lead The Capitol Music Group as Chairman and
CEO. Flom, who joined EMI 
as Chairman
and CEO of Virgin Records America in November 2005, reports directly to EMI Chairman Nicoli.
Andy Slater, who has headed of Capitol Records since 2001, has stepped down. Many other layoffs are sure to follow since combining these two major 
labels is part of EMI’s recentlyannounced restructuring designed to
deliver $217 million in annual savings.
Bruce
Lundvall, head of The Blue Note will continue to
report directly to Nicoli, as will EMI Music North America’s COO
Ivan Gavin and CFO Colin
Finkelstein. EMI
Music Marketing President Ronn Werre, Capitol Nashville President and CEO Mike
Dungan, EMI Christian Music Group Chairman/CEO & President Bill Hearn and
Caroline Distribution General Manager/SVP Bill Hein will all continue to report
to Ivan Gavin.
Full press release after the jump.
Subject:
PRESS RELEASE: EMI MUSIC FORMS CAPITOL MUSIC GROUP IN THE
US
COMPRISING
CAPITOL AND VIRGIN IMPRINTS, JASON FLOM TO HEAD NEW LABEL
GROUP IN THE UNITED STATES COMPRISING CAPITOL AND VIRGIN IMPRINTS
GROUP
NEW YORK
, JANUARY 25, 2007 – After a review of EMI Music’s
American operations, Eric Nicoli, the Chief Executive Officer of EMI Group
today announced that the company is merging its Capitol and Virgin labels to
form The Capitol Music Group, a front line pop, rock and urban label group that
will comprise the Capitol and Virgin Records imprints.
Jason Flom has been promoted to
lead The Capitol Music Group as Chairman and CEO. Flom, who joined EMI as Chairman and CEO of
Virgin Records America in November 2005, reports directly to Nicoli and will
now oversee the combined Capitol and Virgin rosters in the
US
.
Nicoli said: "The music
business shows exciting growth potential, but the environment remains extremely
challenging. In order to thrive and meet
the demands of a rapidly evolving and dynamic music market, we must re-think
our operations, not only to make them efficient, but also more effective and
focused on creative excellence. By
bringing Capitol and Virgin into one label group, we will be better equipped
than ever to promote and nurture artistic talent. We remain strongly committed to developing
artists in
America
in all
genres as this is a key repertoire source for the world, and to that end, we
will maintain our A&R focus and keep a presence in both LA and
New York
. This structure will also allow us to further
build our digital capability.”
“Jason Flom quickly demonstrated
his leadership and artist development abilities since he has been at Virgin. I
am confident that he will take us to new levels of success in the rock, pop and
urban genres as leader of the Capitol Music Group.”
Andrew
Slater, who has been President and Chief Executive Officer of Capitol Records
in the
US
since 2001, has stepped down from his post.
“I would like to thank Andy for
his contribution to Capitol and EMI over the past six years and wish him well
in all that he does in the future,” said Nicoli.
The
formation of this combined
US
label group is part of EMI Group’s recently announced restructuring program,
designed to deliver £110m ($217 million) in annual savings across its
business.
CEO of The Blue Note Label Group, will continue to report directly to Nicoli,
as will EMI Music North America Chief Operating Officer Ivan Gavin and EMI
Music North America Chief Financial Officer Colin Finkelstein.
EMI Music Marketing President
Ronn Werre, Capitol Nashville President and CEO Mike Dungan, EMI Christian
Music Group Chairman/CEO & President Bill Hearn and Caroline Distribution
General Manager/SVP Bill Hein will all continue to report to Ivan Gavin.
“The combined Capitol Music
Group under Jason Flom will become part of a portfolio of labels that position
us to be best-of-class in all genres in the US market: the new Capitol Music Group, our very
successful Capitol Nashville label, the market-leading EMI Christian Music
Group, The Blue Note Label Group aimed at the adult music buyer, our US Latin
label EMI Televisa Music, EMM’s terrific catalog business and Caroline as a
full service distribution and marketing arm for the independent label area,”
said Nicoli.
# # #
ABOUT EMI GROUP
EMI Group is
one of the world’s leading music companies, operating in 50 countries. Its two
divisions include EMI Music Publishing, the world’s top music publisher, and
EMI Music, its recorded music division.
ABOUT EMI MUSIC
IN THE
US
EMI Music North
America is a part of EMI Group. Its
U.S. units include Astralwerks; The Blue Note Label Group, which includes the
Angel, Blue Note, EMI Classics, Manhattan and Narada imprints; The Capitol
Music Group, which includes the Capitol and Virgin imprints; Capitol Nashville;
Caroline Distribution, serving the independent label community; EMI Christian
Music Group; EMI Televisa Music; and Mute. Its EMI Music Marketing unit comprises catalogue marketing, strategic
marketing and sales for all of EMI’s
US
labels. For further information, please visit www.emigroup.com.
Contact:
Jeanne Meyer,
EMI
North America
, +1.212.786.8850
Amanda Conroy,
EMI worldwide, +44.20.7796.7529
Bio, picture of
Jason Flom available upon request
Why are you positioning Flom as the knight in shining armor to save EMI in North America? EMI is an international organization first and foremost. This duffer cannot see past the US mainland. He does not have a legitimate entrepreneurial bone in his body nor does he have the financial discipline or administrative acumen to be EMI’s North American Chief (not to mention the head of the recently formed Capitol Music Group). He is a jammy, silver spooner that always had money from day one, partied extensively in the 80’s and 90’s, went to rehab, had the backup of father-lawyer-power broker Joe Flom for protection (along with Azzoli, Morris et al). He is old guard that cares more about how he looks rather than the company and its employees.
EMI has been in a state of flux post the ejections of Levy, Munns (who appointed Flom), Slater, Gavin and the defection of Bandier. This has allowed Flom to fly under the radar of real financial scrutiny as the priority was to get the Terra Firma deal done post haste. The focus was on this transaction not what Flom was doing in the States. If Gavin was left in place (at least for the transition period) he would have put a stop to alot of the heavy spending that has artificially made some of Flom’s records look successful. This is someone that should be in a leadership position?
Jason was always protected in his 26 years at Atlantic. When he had a big record it was forced then as his ‘big’ records are forced now. He is not building any long-term careers. Do you really think that Red Jumpsuit Apparatus has been a profitable venture? That record along with 30 Seconds To Mars (who he inherited) and many others have all been pushed through the system using the old paradigm. Has anyone looked at the recording, video and promotional expenditures? These will not be career artists nor will their follow up albums have any traction. They mean nothing internationally. He has not built or associated himself with any career artists at EMI. The financial pit that he is digging will only deepen.
Jason needs platinum records to justify his existence and ego among his music industry “executive” peer group. He is already wealthy (from birth and Bronfman’s payoff to get him out of the building). He has no incentive to be thrifty. He wants the accolades. He wants the red carpet. This is not the discipline necessary of a leader in this industry’s current age. Without his RIAA endorsed plaques he sees himself as a loser, an outsider, someone who has gone cold. Do you really think it will take the private equity finance brethren at Terra Firma more than a few minutes to figure this out. They want profitability. That is their certification. That is the credo that they abide by. If you look at the top 5 releases that Flom has taken credit for since taking his post you will see that all have been financial misfires. Misfires using EMI’s money to make himself look good, at the expense of the company.
What about A&R? Very overrated. His historical knack for finding bands was entrenched in using phone research and/or spotting regional airplay on small labels and scooping from that trough. Would a more effective model (assuming you subscribe to this form of talent scouting) not be to hire real, mathematically inclined statistical analysts utilizing customized software tied in to web metrics fractionation?
Executive team? One only needs to take a look at who he has surrounded himself with. Bring them across the pond and they would be immediately detained at Her Majesty’s pleasure!
Digital? Bloody awful. There is no expertise here. This bloke is still living in the 1990’s. He is just another recycled relic of the old machine. Mr. Hands, make changes before another English institution is flushed down the loo.
— Posted by Ken Berrie