• frontpage-logo
  • NYI-homepage-mobile-logo

  • Katy Perry is one of EMI's top new artists.

    The record company that’s home to The Beatles and “It Girl” of the moment, Katy Perry, has fired off another distress signal. It will need new cash next year to stay in business as it tries to deal with a mountain of debt.

    EMI Group PLC, owned by Maltby Capital is also home to Coldplay, Lily Allen, Pink Floyd and Norah Jones among other artists.

    The London-based company came close to collapse a few months ago after talks with rival music companies Universal Music Group, Sony Music Entertainment and Warner Music Group about various forms of a tie-up or distribution deal failed.

    It was saved by a further injection of capital from Guy Hand’s private equity firm, Terra Firma, which bought EMI for around 2.4 billion pounds in 2007, warding off foreclosure by its main lender, Citigroup.

    New CEO Roger Faxon is slashing costs, which has angered many artists, causing some to flee the label.

    Among key artist departures in recent years, the Beatles’ Paul McCartney took his older catalog of solo songs to Concord Music, the label that helped him create “Memory Almost Full” in 2007.

    That year, he stopped giving new work to EMI. Rock band Queen is also giving Universal the rights to distribute its catalog outside North America, ending a 40-year relationship with EMI.

    Maltby’s annual report revealed that EMI lost 512 million pounds in its fiscal year through March 31, significantly less than the 1.57 billion pound loss it reported last year.

    It said today (Aug. 18) that it has enough cash to meet current obligations on its $4.7 billion in debt but added that it will likely need more funding to avoid breaching debt covenants going ahead.

    Maltby Chairman Stephen Alexander tried to put a positive spin on the news. “This report shows the very real operational progress that EMI has made in the past three years, in the face of the serious challenges faced by the music industry and the wider economy,” he said.

    Revenue rose 5$ to 1.65 billion pounds, driven by the release of the remastered Beatles’ catalogue and hits from new artists including Perry, who has sold around six million albums worldwide.

    Country band Lady Antebellum, the top seller of the year in the United States is also an EMI act.

    EMI has struggled more than most other recording groups amid a decline in CD sales following the departure of key artists.

    (The Associated Press contributed to this report)