By Kristen Schweizer March 10 (Bloomberg) — EMI Music, the U.K. recording company controlled by Guy Hands ’s Terra Firma Capital Partners Ltd., said Chief Executive Officer Elio Leoni-Sceti will leave the company on March 31. Leoni-Sceti, a former cleaning-products executive who used to run the European unit of Reckitt Benckiser Plc, took over in July 2008, a year after Hands’s Terra Firma paid 4 billion pounds ($5.96 billion) for the London-based company. EMI Music named Charles Allen , currently its non-executive chairman, as executive chairman. He will assume the CEO role. The management changes come at a time when Hands is seeking to convince Terra Firma investors to inject new capital to keep EMI afloat. Without the funding, the label may end up in the hands of creditor Citigroup Inc., which Hands is now suing, claiming the bank tricked him into buying EMI. Leoni-Sceti had been charged with devising a new business plan for EMI Music. “Over the past two-and-a-half years, EMI Music has become a stronger and growing company, with a talented senior team, significant creative success and a more rigorous approach to marketing and operations,” EMI said in a statement today. In a letter to Hands in October, which was part of court documents filed Feb. 4 in New York, Leoni-Sceti wrote that morale at the company had reached a low and that artists are questioning whether to stay because of negative press attention focused on EMI’s financial circumstances. Losses EMI, home to the Beatles, last month posted a 1.5 billion- pound annual loss and said its liabilities exceeded assets by 408 million pounds as of March 31, 2009. Terra Firma had asked EMI for the new business plan and needs the approval of 75 percent of investors to put more capital in by end-June. EMI’s challenges come against the backdrop of the music industry grappling with declining CD sales amid piracy and a shift in consumer preference for digital downloads. U.S. compact disc sales fell 65 percent from 2000 to 2009, according to SoundScan. Vivendi SA’s Universal Music Group, the world’s largest record label, reported revenue fell 6.2 percent last year to 4.36 billion euros. Pink Floyd and Queen, which have been with EMI Music for about four decades, are in talks with other record companies to leave the label, according to two people familiar with their talks. Allen, 53, has been non-executive chairman at EMI Music since January 2009, chairing its Board and supporting the transformation of the business, the record company said in today’s statement. Allen was formerly with Granada Plc and ITV Plc. To contact the reporter on this story: Kristen Schweizer at kschweizer1@bloomberg.net
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EMI Music Says Chief Executive Leoni-Sceti to Step Down From Record Label
