Sony fires 15,999 plus Charlie Walk

Sony Corp. is cutting its workforce by approximately 4 percent. This means an elimination of around 8,000 staffers and 8,000 part-time contractors. 

From a music perspective the only news-worthy bit of information coming from this announcement is the imminent departure of Charlie Walk from Epic Records. Walk is/was President of the Sony Music imprint and will leave the company at the end of the year. 

Walk’s ouster had been rumored for weeks. No reasons were given for his exit. But the numbers say it: According to SoundScan figures, Epic’s market share in current albums fell from 4.22 percent in 2005 to 1.58 percent this year.

In addition to the President some more Epic staffers in radio promotion and in A&R are expected to lose their jobs. No word yet on who will replace Walk, but EVP Andy Gershon who joined Sony from V2 in early 2007 could be the obvious choice. Walk was promoted to President almost exactly three years ago.

Terra Firma: Don’t worry, EMI will meet covenants

All this talk about the prospect of defaulting on Citigroup loans and another possible cash injection for EMI is overblown, the people at Terra Firma think. And they are putting their own spin on the story for an article in The Independent. Strangely, though, nobody is being quoted with a name to deny the recent rumors. 

The usual sources within the company talked to the paper, “angrily” denying suggestions that it needed more cash to avoid breaching covenants in March. So, they’re angry and want to set the record straight, but they don’t want to go on record with a face? Smells funny to me. 

The sources from Terra Firma and EMI told the Independent that they have a covenant check scheduled for March and that they are confident EMI will not default on the loans made by Citigroup. 

“EMI had a solid first half, and if performance continues in the same way then there is no reason why it should run into problems. The covenant light facility has seven years to go, and March is nothing more than a covenant test,” the sources say. 

The paper goes on to report on the most recent cash injection Terra Firma had to put into EMI and puts the amount in the area of £65-£75 million. This is exactly what had been reported in early December and seven times as much as the £10 million the Wall Street Journal had in yesterday’s story. 

Just goes to show that they are all out there fishing. Nobody really seems to know how big of a liability EMI is to Terra Firma. We will have to take the private equity’s angry word for it: EMI doesn’t need more cash. Now, wouldn’t that be good news …

Vivendi CEO: Recession? We don’t care

Interested in a recession-proof business? Look no further, the French have it. Vivendi, corporate umbrella of Universal Music Group, Activision Blizzard, Canal+ and other formidable companies, says it is not feeling the macro-economic changes happening everywhere around them. 

CEO Jean-Bernard Lévy told a media conference hosted by French newspaper Les Echos that the global economic crisis was “not a reality” for Vivendi at the moment. Christmas sales of “impulse-buy” products like CDs,video games and accessories were at normal levels. Wow, good for him. I guess size does matter in the case of UMG.

“It’s possible that there will be a gradual erosion of our markets and results. But we think we have a much higher than average level of resistance,” Lévy said, adding that Vivendi may make some acquisitions in the coming quarters. Europe’s biggest media group is looking for takeover targets that carry cheap market valuations. The company is especially interested in finding candidates in markets that are growing faster than France.