EMI Group on Monday threw cold water on reports that it had agreed to pay pop diva Mariah Carey a lump sum to end her multi-million dollar recording contract after her last album
Recent reports suggested EMI had agreed to pay Carey off with as much as $50 million after its Virgin label signed the star in one of the most expensive recording deals ever, only to see her first release Glitter sell a mere two million copies.
"EMI wishes to make clear that it has made no such payment or agreement," EMI said in a statement. EMI, whose top artists include Robbie Williams and Kylie Minogue, was harshly criticized last year for paying excessively for a 31-year-old star past her prime when it signed the four-album Carey deal, worth an estimated 57 million pounds. At the time, EMI justified the deal as building much-needed U.S. market share with the best-selling female singer of the last decade, who has sold more than 120 million albums. Rumors of Carey's departure started after the executive who signed her recording contract, Ken Berry, was forced out of the British music group in a reshuffle and replaced by Alain Levy. Former Polygram boss Levy immediately set to work reviewing the recorded music business in a move to slash costs after a tough year in the music industry.
Old-timer David Bowie has already been axed from the EMI roster. However, analysts had questioned the rationale behind EMI paying as much as $50 million to Carey given that she had only produced one album under the contract and her Glitter album had been hit by a string of bad luck. Glitter was delayed after Carey suffered a breakdown last year and was then released on September 11. Ill health also prevented Carey from promoting the album, resulting in a huge loss for EMI.
Carey's previous albums such as Music Box have sold as many as 20 million copies. EMI, the world's third largest music group, has been under severe pressure to brush up its act, especially in the core U.S. market, after two failed merger attempts–first with Warner Music and then with BMG. EMI shares fell 35 percent last year. On Monday, they were trading 2.7 percent down in London. The music industry as a whole also suffered its worst year ever in 2001 after the September 11 attacks compounded already low growth due to piracy and waning CD sales, battering majors that also include Sony Music and Universal. EMI brought Levy on board in October to replace Ken Berry after the group posted a dismal first half performance and warned full-year profits would dive 20 percent. Levy's strategic review of the business is due to be completed early this year. EMI Chairman Eric Nicoli has said further job losses may be made while labels are expected to be restructured and rationalized. In a move to cut costs in a shrinking industry, a number of music groups have been offloading high-profile artists who do not sell enough albums to warrant costly contracts.