Is this the end of the road...for Abbey road

krd

EMI are flogging Abbey Road.

http://www.guardian.co.uk/business/2010/feb/16/abbey-road-studios-sale-emi

What will become of the place? A nightclub and restaurant complex?

DamagedTrax

im buying it for €27.50. FACT.

PaulBrewer

http://www.google.com/hostednews/ukpress/article/ALeqM5jN7dWcsJnJQ4zPBytuTIf359cdbQ

madtheory

The lowdown is that it's been "for sale" since 1995, because since then it's been run at a loss. Terra Firma got burned in the recession, so anything they can sell is fair game. The National Trust are seriously responding to the campaign to save it from property development.

MilanPan!c

I'm thining it'd make good flats.

madtheory

Nah. All those Beatles fans would be very annoying.

damagedtrax, can I come and play there too?

krd

madtheory wrote: »

The lowdown is that it's been "for sale" since 1995, because since then it's been run at a loss. Terra Firma got burned in the recession, so anything they can sell is fair game. The National Trust are seriously responding to the campaign to save it from property development.

Terra Firma bought EMI for 6.5 billion - EMI has to pay something like £120 million every 3 months to manage the debt. Over the last two years, since buying EMI, Terra Firma have discovered there isn't really that much money in music any more. There's only so many times you can release a Beatles compilation for Christmas. So now they're suing City Bank, who lent them the money to buy EMI - saying the bank tricked them into buying it. It's not just the recession. Terra Firma is run by an idiot, whose basic modus operandi was to take over companies, fire everyone and replace them with people working nearly minimum wage. I think EMI is just months away from bankruptcy. I don't actually think they can avoid bankruptcy. That in itself is as interesting as the Abbey road story.

madtheory

Do you have a link to the report on suing Citibank?

Guy Hands is no idiot. Among other successes, he is the biggest landlord in Germany. Read the Maltby report on how bad EMI was before he bought it, it's very interesting. There was a lot wrong with it, they fired a lot of people, many of whom were doing no work and snorting coke. EMI is one of very few mistakes he's made, it was bad timing.

flyswatter

Andrew Lloyd Webber is interested in buying it.


http://artsbeat.blogs.nytimes.com/2010/02/19/andrew-lloyd-webber-interested-in-abbey-road-studios/

krd

madtheory wrote: »

Do you have a link to the report on suing Citibank?

Guy Hands is no idiot. Among other successes, he is the biggest landlord in Germany. Read the Maltby report on how bad EMI was before he bought it, it's very interesting. There was a lot wrong with it, they fired a lot of people, many of whom were doing no work and snorting coke. EMI is one of very few mistakes he's made, it was bad timing.

The court case is still running Here's a link to a story in the times - but there's lots in print about the case. The short version. Terra Firma are chancing their arm suing Citi for misleading them into buying EMI. If Terra Firma win - they get 2 billion written off by Citibank, or at least that's what they're looking for. But even then I don't think that will save them. If they do a firesale on catalogue they own it might buy them more time - but Citi may be looking to take it off Guy Hand.

Record companies are not like other businesses. They usually work best when they're in the hands of guys doing cocaine and not apparently doing any work. As business history goes - whenever a typical big corporation buys into a record company, they discover they've bought their way into a freak show. if you apply the same business techniques to a record company as you do say to selling trainers or running a pub chain or a call centre you lose an incredible amount of money very fast. Looking at figures on a spreadsheet and predicting sales may be fine for selling hamburgers or tomato ketchup - but .... B-U-T Coldplay are not the Beatles. And no amount of "managing" or cost efficiencies or other business crap is going to turn them into the Beatles.

People like Guy Hands, or other "business leaders" tend to look like geniuses, but it's just the money. The chief executive of the company is the one who gets paid the most, but it's everyone else who does the work. Guy Hands is not going to pull out a guitar and write a hit.

madtheory

Thanks for the link.

krd wrote: »

They usually work best when they're in the hands of guys doing cocaine and not apparently doing any work.

I think perhaps we've got another illogical syllogism on our hands? Just because there are people in big record companies who do cocaine, it does not follow that it is these people who are responsible for the success of the company. A coke high only lasts 30 mins y'know.

EMI was successful in the 1920s, when no one in the company even knew what cocaine was. What they did understand was marketing, manufacturing, distribution and musical talent. They built on that success. That's what makes a record company successful... things got out of hand when they made millions from the Beatles and the seventies came along.

krd

madtheory wrote: »

Thanks for the link.

I think perhaps we've got another illogical syllogism on our hands? Just because there are people in big record companies who do cocaine, it does not follow that it is these people who are responsible for the success of the company. A coke high only lasts 30 mins y'know.

EMI was successful in the 1920s, when no one in the company even knew what cocaine was. What they did understand was marketing, manufacturing, distribution and musical talent. They built on that success. That's what makes a record company successful... things got out of hand when they made millions from the Beatles and the seventies came along.

My point really is say the appropriate management for say O'Brien's Sandwich bars or selling office supplies, may not be the appropriate management for a record company. Wierdos make the best records. It's standard corporate practice to fire the wierdos and replace them with wombling little noddies who recoil in horror at the slightest eccentricity.

My favourite record company exes of all time would be Walter Yetnikoff of CBS and Ahmet Ertegun of Atlantic. Those guys made loads of really great records. But did a ridiculous amount of cocaine and anything else that was going. One reason the music business is doing so badly is because these guys are not around any more. They would never have let the telecoms companies rip them off. Millions of people originally got the internet just to bootleg music.

Cocaine has been around a long time. In the 20s all those American Jazz bands would have been well into their coke and reefers. Coca Cola used to have 10milligrams of pure cocaine in each bottle. Shoe shine boys used to sell it.

The cocaine high does not last 30 minutes. Cocaine upsets your brain chemistry for days. It effects some people more than others. A lot of the craziness of the last decade in Ireland can be put down to people having their brain chemistry disturbed by cocaine. It doesn't effect everyone in the same way. And for some people it's an absolute disaster because it gives something to their personality they've never experienced and the only way they can find to replicate this new part of their personality is through more cocaine.



EMI has always been an interest company. There's a documentary out there somewhere, made in the 80s on EMI - it's really good. It covers everything - the arms manufacturing and EMI's invention of the CAT scanner - And how they mismanaged that so instead of making billions on it they just barely broke even.

The notion there's a set model of business for every endeavour is completely wrong. With the standard approach in business - you make an investment and you'll get a solid return. This does not work in music and never really has. Some records that had millions spent on them flopped - and some made very cheaply have made millions. In other businesses, like aluminium smelting or hair care products, this not what happens.

PaulBrewer

http://shop.abbeyroad.com/shop/abbeyroad/

Is this an indication how things might progress ?

kmick

Im not personally a beatles fan but as far as I am concerned once it goes past saving the music its past the point of caring about it. I would not want my tax monies used to overpay for bricks and mortar. If they got it at the property value fair enough. Thats what it will eventually be worth anyway if EMI go bust.

i57dwun4yb1pt8

seems to me the fcuking beatles should buy it -
they made enough money out of it

PaulBrewer

DaDumTish wrote: »

seems to me the fcuking beatles should buy it -
they made enough money out of it

That's hardly a reason to buy it ?

PaulBrewer

kmick wrote: »

Im not personally a beatles fan but as far as I am concerned once it goes past saving the music its past the point of caring about it. I would not want my tax monies used to overpay for bricks and mortar. If they got it at the property value fair enough. Thats what it will eventually be worth anyway if EMI go bust.

Indeed.

MilanPan!c

DaDumTish wrote: »

seems to me the fcuking beatles should buy it -
they made enough money out of it

It's not ACTUALLY for sale guys.

madtheory

MilanPan!c wrote: »

It's not ACTUALLY for sale guys.

That's what I said...

madtheory wrote: »

The lowdown is that it's been "for sale" since 1995, because since then it's been run at a loss. Terra Firma got burned in the recession, so anything they can sell is fair game. The National Trust are seriously responding to the campaign to save it from property development.

I love being right

krd wrote: »

My favourite record company exes of all time would be Walter Yetnikoff of CBS and Ahmet Ertegun of Atlantic. Those guys made loads of really great records. But did a ridiculous amount of cocaine and anything else that was going. One reason the music business is doing so badly is because these guys are not around any more.

The coke is a red herring. In his book (and it's a great book ), Yetnikoff makes it clear that he had an addictive personality. That is what drove his business success, he was a workaholic. Coke was another addiction. Taking coke did not make him successful! That is a classic illogical sylogism.

I'll defer to your expertise on the duration of the coke high, but I'm just stating what I've observed down through the years.

To put it bluntly, EMI had several "creatives" worknig for them who were paranoid coke heads, and gave out big advances to non productive artists. Standard practice in the biz apparently. EMI wrote these advances in as assets each year, so that they looked more solvent than they actually were. First thing Guy Hands did was dump those non productive artists and write off the advances as a loss.
He also says a few times that he didn't make the records, he just sold them. He knows that he is not an artist.

krd wrote: »

With the standard approach in business - you make an investment and you'll get a solid return.

Try telling that to those who lost big in the recession. Nothing is guaranteed. In music, you succeed if you can bet on the good horse, just like any business.

I think perhaps you have a romantic idea of the music business?

PaulBrewer

http://news.bbc.co.uk/2/hi/uk_news/england/london/8527095.stm

i57dwun4yb1pt8

PaulBrewer wrote: »

That's hardly a reason to buy it ?

yes it is

its their history and a part of modern english culture and history
put your hand in your pocket mcartney and buy it.

PaulBrewer

DaDumTish wrote: »

yes it is

its their history and a part of modern english culture and history
put your hand in your pocket mcartney and buy it.

Nonsense.

i57dwun4yb1pt8

i'll agree to disagree with you then

madtheory

I think perhaps your argument is poorly founded. Abbey Road is a lot more than the Beatles. It's a part of English musical heritage- there's a huge amount of great classical performances recorded there, not to mention all the other jazz, rock, pop, spoken word etc. etc. material. For example, Elgar performed at the opening.

It makes a lot more sense for the National Trust to be involved, perhaps with some financial support from the fabs.

i57dwun4yb1pt8

yes , thats what i said - its a part of engish culture-
im sure macca could help assist the national trust .


so what was called "nonsense " is now what I basically said ?

i guess some people get their kicks by trying to wind other people up

how sad is that ...

madtheory

In fairness, you both could have been clearer... something else going on there I think...

PaulBrewer

madtheory wrote: »

you both could have been clearer...

How could I make 'Nonsense' clearer ?

jtsuited

Aridstarling

Well, its now a Grade II listed building.

PaulBrewer

Yup ...

http://www.audioprointernational.com/news/1818/Abbey-Road-granted-Grade-II-listed-status

krd

madtheory wrote: »

Try telling that to those who lost big in the recession. Nothing is guaranteed. In music, you succeed if you can bet on the good horse, just like any business.

I think perhaps you have a romantic idea of the music business?

No I wouldn't have a romantic notion of the music business. I think it's a really flaky business. Most businesses are not a case of putting a bet on a horse. That's gambling. No bank in their right mind is going to pony up money for a group of horse enthusiasts to place bets.

Record companies are notorious for blowing money on lame nags. MCA paid Andy Taylor a 16 million advance for his album Thunder - Is it in your collection? And sometimes they make a lot of money from someone they haven't spent that much money on.

Sometimes really great records are made and just don't sell. And it wasn't for lack of money or promotion. Only a handful of the public had a taste for them.

The other night I was listening to a record company CD sampler from a few years back . And I couldn't believe how rubbish it was. All generic indie bands - no songs - terrible lyrics - no real melodies. Nothing. All those bands would have had money spent on them. People can bitch and moan about Lady Gaga - at least she has some tunes and doesn't bore everyone to death within 10 seconds. It's not that every record company signing should be lady Gaga. But how many generic indie bands does the world need? I would love to see the full roster of the EMI drops along side how much was spent on them.

Had I been in Guy Hands position I would have cut the roster as well. I wouldn't guarantee I could pick a hit - but I know signing hundreds of generic indie bands is not going to shorten the odds. I've been told EMI had 16,000 artists on their books before the cuts.


But I've seen enough conventional businesses that were run by flakes. Where every manager was a bluffer, and for all their talk didn't understand how their business worked. Where ludicrous "investments" were made in absolute worthless junk. Every jackass thinks they're a genius when they've a business suit on and someone has given them a management position because they liked the way they kissed ass.

madtheory

So, what is your point? After the above post, your previous posts don't make any sense to me, for example:

krd wrote: »

Record companies are not like other businesses. They usually work best when they're in the hands of guys doing cocaine and not apparently doing any work.

You were saying that the "old" way was better than the Terra Firma way, now you're saying... something else?

krd wrote: »

But I've seen enough conventional businesses that were run by flakes. Where every manager was a bluffer, and for all their talk didn't understand how their business worked. Where ludicrous "investments" were made in absolute worthless junk.

And the money the used to make those investments was loaned to them by banks. Which is part of why the current recession happened- lending to people who could not pay it back became the norm rather than the exception. Gambling and business have a lot in common.

krd

No I'm not contradicting myself. There's a difference between idiot savants and plain idiots

Record companies are very different from other businesses. If you're selling cement or aluminium, the prices will fluctuate in and out of a recession, but it's harder to lose everything. The same can't be said for selling music. It's not even like fashion retailing - where if your product is failing you can slash the price, clear the stock, and try something with a better profit margin.

When you're selling cement, there'll always be a market for it - you may have to cut your price, scale back production - you can always clear your stock. If you've banked on Eddie Reader selling millions - you might find yourself without a market for your product.

Many straight and serious types in the corporate world, on big salaries, driving big cars, working the 16 hour days, are idiots. They're complete fakes. They take the credit when things go right, and get someone else to take the blame when things go wrong. I've worked for people who've lost millions through stupidity - not from taking gambles - just pure haven't got a clue stupidity. Most big businesses womble along run by wombles. They're more concerned how everything looks and getting their arses kissed than concentrating on the fundamentals of their business and not screwing up.

Show business is completely different. Say if the Pogues had been "managed" by the typical pompous senior management you find running Irish companies. Imagine, and treated them like employees. Showed them who was boss. Sacking anyone who wouldn't cow down to them or kiss their arses. (Getting rid of anyone who was a little bit "weird" and not corporate enough) What would the result have been? Does it bear thinking about.

If you're running the Pogues it works differently. Doubling the marketing budget and bullying the band may not give you more sales. Making Shane happy might. But if you fired Shane for being a weird drunk before they made their first record, you have no Pogues to begin with.

krd

I've just found out - Aslan are on EMI - maybe Guy is out of the woods

i57dwun4yb1pt8

krd wrote: »

No I'm not contradicting myself. There's a difference between idiot savants and plain idiots


Many straight and serious types in the corporate world, on big salaries, driving big cars, working the 16 hour days, are idiots. They're complete fakes. They take the credit when things go right, and get someone else to take the blame when things go wrong. I've worked for people who've lost millions through stupidity - not from taking gambles - just pure haven't got a clue stupidity. Most big businesses womble along run by wombles. They're more concerned how everything looks and getting their arses kissed than concentrating on the fundamentals of their business and not screwing up.

.

thats the truth right there

madtheory

True, music is very far from the best way to make money. But it's a bit more exciting than cement. Clearly, compared to music cement would be towards the bottom of Maslows hierarchy of needs, more in demand and therefore is less risk and more profitable in the long term. No argument there.

Yes, sure, there are business people who are idiots. I don't think there's a higher percentage than in any other area. I know some excellent business people who are not risk averse, and are still very rich, at no one's expense. In my experience, it's taking risks that get you somewhere.

You did not initially make a distinction between idiot and idiot savant, there's a reason you have to put savant there... so are you saying that you think Guy Hands is an idiot savant, or an idiot? Because I was saying he's not an idiot. No mention of savant.

Fact is EMI publishing is very profitable, and IMO that is what Guy Hands (and also now Citibank) has his eye on.

krd

Madtheory, I've been working my way through the Maltby report (still haven't finished) Most of it has confirmed my suspicions. That he thinks he can run EMI like it's burger king.

The publishing wing of EMI hasn't been effected by internet piracy because they make their money through things like radio and TV. Their market hasn't been effected. The EMI publishing catalogue is huge - they get a major slice of the worlds radio royalties everyday. But it's a very different business to EMI music.

I still think Guy Hands doesn't understand why EMI music functioned in the way it did before he came along. Like his surprise at the 700k taxi bill. It's not as shocking as it sounds. The nature of that kind of business means moving thousands of people around for the purpose of work. RTE has a similarly large taxi bill. The BBC would also have a similar bill.

Also what Guy thinks he can do with advances. It seems the in the UK, artists are getting large advances up front, that are not recovered through sales. In the Maltby report Guy is under the impression that because they're getting their money up front artists have less incentive to push themselves to make better records and promote themselves. In Guy's mentality musicians are like rats in a maze chasing after bits of cheese.

The large upfront advances may just be because that's the convention. And artists on their percentage of music sales are not really expected by themselves or the record companies to recover the advance unless they have a really big hit.

The Maltby report is very interesting - there's also a bit in there about spending on production - saying the listeners are not able to discern any difference in the quality for less expensive productions - Good bye Abbey road and Air - Box room here we come.

From looking at the Maltby report and EMI - I still think EMI are in big trouble (Guy is betting the farm on Katy Perry's ass) but the music industry is not in such bad health as I thought it was. Something has to replace CD sales. Guy Hands biggest problem is Citi-bank, the repayment on the loan is 480 Million a year. EMI has never made a profit that high. The court case is Guy trying to get Citi to write-off a large part of the debt. If he succeeds he's safe - if not EMI will become EMI-CitiBank - Lily Allen will end up working as a cashier to pay off her advance.

madtheory

Hi krd, you make some fascinating points, it's really great to engage on this level. Unfortunately, I don't have the time to address them properly now, they are food for thought!

But a quick question- clearly EMI was floundering before Guy Hands came along, and he has hired new management staff all of whom are music veterans, i.e. he's not deluded about his music knowledge... so surely a huge change was warranted, and it was/ is being carried out to the best of their abilities?

That said, narcoman over on SOS was describing how they dumped a lot of their artists from publishing, and it seems very foolish, from his side of the fence.