The FTC and the European Union were concerned that the proposed purchase would impede competition in the music publishing world. But the E.U. cleared the deal in April after Sony agreed to divest various catalogues of songs it owns. The FTC followed suit, unanimously agreeing to the acquisition without requiring additional divestitures.
With this purchase, Sony will control the largest number of copyrights in the music publishing business — more than 2 million. Even so, the company will have less than 30 percent of the revenues for music publishing rights in this country, a Sony spokesman said Friday.
In trying to convince regulators that the deal would not be anti-competitive, Sony’s lawyers emphasized the fragmented nature of the business. They pointed to other well-established rivals, including Universal Music Publishing, which works with Adele, Maroon 5 and other top artists. Other competitors, the Sony lawyers said, also have gained a foothold in recent years, including Warner/Chapell Music, Kobalt Music Group and BMG.
With the deal complete, EMI will be folded into Sony/ATV in New York, a Sony subsidiary that is run as a joint venture between Sony and Michael Jackson’s estate. Sony/ATV represents the copyrights of Jackson, Bob Dylan and other legendary artists.
Among the coalition of investors involved in the purchase, the largest financial backer is an Abu Dhabi-based firm called Mubadala Development.
The deal came about after the previous owner of EMI Music was foreclosed upon by Citibank, which proceeded to separately sell the British company’s publishing arm and its recorded music division.
Universal Music Group has made a $1.9 billion bid for the recorded music portion of the business. That deal remains in limbo, however, while U.S. regulators investigate the competitive implications. The proposal has attracted more scrutiny in part because it is taking place in a highly concentrated industry, people familiar with the deal said.
While the publishing side of the business licenses musical compositions to television stations, filmmakers and a variety of other businesses, the recording side sells recordings directly to consumers.