Two labor unions back EMI sale to Universal Music


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SAG-AFTRA, the merged entity of the Screen Actors Guild and the American Federation of Television and Radio Artists, and the American Federation of Musicians gave their blessings Tuesday to Universal Music Group’s $1.9-billion deal to buy EMI’s recorded music business, which represents bands such as Coldplay, Massive Attack, Pink Floyd and others, from Citigroup Inc.

The pending deal, forged in November, also calls for Sony ATV to pay $2.2 billion for EMI’s publishing assets. Both require the approval of U.S. and European antitrust regulators, who must decide in the next few months whether the deal would restrict competition and harm consumers.


A number of critics have piped up against the deal, including the consumer advocacy group Public Knowledge and Warner Music Group, whose former Chief Executive, Edgar Bronfman Jr., took a swipe at the pending merger in January, calling it ‘dangerous.’ (Warner had also offered to buy EMI, but was outbid by Universal.)

It’s not usual for a labor union to speak up in support of big business deals. With that backdrop, the dual union endorsements of the merger seems even more unusual, especially because other labor groups such as the Writers Guild have been outspoken critics of media consolidation.

Why this departure, then? In a word -- jobs.

SAG-AFTRA, which represents 150,000 actors, writers, recording artists and other media professionals, acknowledged in its letter Tuesday to the U.S. Federal Trade Commission that the group has ‘generally expressed skepticism toward corporate mergers and acquisitions.’ The FTC has taken the lead in examining the merger for potential antitrust issues.

In this case, however, the union said the merger would save EMI from drifting into ‘oblivion,’ wrote Kim Roberts Hedgpeth, outgoing co-national executive director of SAG-AFTRA, who this week announced her pending retirement.

Allowing EMI to deteriorate on its own ‘would also do a disservice to American workers, whose jobs would be at risk should EMI wither further or be sold in pieces to fuel quick profits for capital investors,’ she added.

Raymond Hair Jr., president of the American Federation of Musicians of the United States and Canada, put forth the same argument in a separate letter to the FTC, saying ‘sustaining the EMI legacy, which produced world popular music artists such as the Beatles and Frank Sinatra, under UMG’s oversight would appear to benefit AFM recording musicians.’

So far, neither the FTC nor the European Commission have issued opinions on the merger, which would fold EMI’s assets into two of the world’s largest record companies and reduce the number of major music companies from four to three.



SAG, AFTRA craft merger plan

Warner vows to ‘fight’ EMI sale

EMI Group sold to Universal, Sony for $4.1 billion

-- Alex Pham