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EMI was today plunged into fresh turmoil after its private-equity owner Terra Firma sensationally parted ways with Elio Leoni-Sceti as chief executive after only 18 months in charge.
Former ITV boss Charles Allen, non-executive chairman of EMI Music, takes control as executive chairman. EMI, the record label of Coldplay and Robbie Williams, insists Leoni-Sceti's departure is by mutual agreement.
Leoni-Sceti leaves at a crucial time, just a month after EMI's parent company Maltby Capital posted an eye-watering £1.75 billion pre-tax loss in the year to March 2009.
Terra Firma investors must inject £120 million into Maltby by June to avoid breaching banking covenants on £3 billion of loans used to buy EMI in 2007.
EMI said last month that an agreement by investors to inject more money was partly dependent on Leoni-Sceti developing a new strategic business plan for the record label, the fourth and smallest of the major labels.
Allen told the Evening Standard that running EMI was a "great opportunity" and said parting ways with the CEO was "not about changing direction".
The new executive chairman maintained "the timing is helpful to us" as Leoni-Sceti had "helped the company focus on the consumer side of the business" but now the focus is on implementing the new strategic plan.
"The next phase plays to my strengths," said Allen, referring to his experience at not only ITV but also with Tesco and in banking. "We've done a lot of the cost-cutting already. It's about driving the business forward now."
Allen pointed out that despite Maltby's debts, the record label has a strong management team and currently has the number one single in the UK with Tinie Tempah and Lady Antebellum has the number one album in America.
While EMI is profitable on an operating basis, the label is hampered by colossal bank debt. If Maltby breaches its bank covenants, its lender Citigroup could seize control of the label.
Leoni-Sceti, an Italian who used to work for cleaning products firm Reckitt-Benckiser, had no background in music before joining EMI in September 2008. He officially leaves on 31 March. He said: “My job here is now done and it is time for me to move on.”
The latest boardroom drama comes as Terra Firma chief Guy Hands sues Citi, alleging he was misled during the 2007 purchase of EMI.
Reader views (1)
Having lived in Italy for 5 years and listened to the rubbish Italian music executives and musicians churn out, I can understand why EMI's decline has become more rapid since
Elio took over.
Good riddance he should go back to Italy and host Sanremo.
- Mark James, uk, 10/03/2010 12:26
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