EMI Group on Monday threw cold water on reports that it had agreedto pay pop diva Mariah Carey a lump sum to end her multi-million dollarrecording contract after her last album Glitter flopped.
Recent reports suggested EMI had agreed to pay Carey off with asmuch as $50 million after its Virgin label signed the star in one ofthe most expensive recording deals ever, only to see her first releaseGlitter sell a mere two million copies.
"EMI wishes to make clear that it has made no such payment oragreement," EMI said in a statement. EMI, whose top artists includeRobbie Williams and Kylie Minogue, was harshly criticized last year forpaying excessively for a 31-year-old star past her prime when it signedthe four-album Carey deal, worth an estimated 57 million pounds. At thetime, EMI justified the deal as building much-needed U.S. market sharewith the best-selling female singer of the last decade, who has soldmore than 120 million albums. Rumors of Carey's departure started afterthe executive who signed her recording contract, Ken Berry, was forcedout of the British music group in a reshuffle and replaced by AlainLevy. Former Polygram boss Levy immediately set to work reviewing therecorded music business in a move to slash costs after a tough year inthe music industry.
Old-timer David Bowie has already been axed from the EMI roster.However, analysts had questioned the rationale behind EMI paying asmuch as $50 million to Carey given that she had only produced one albumunder the contract and her Glitter album had been hit by astring of bad luck. Glitter was delayed after Carey suffered abreakdown last year and was then released on September 11. Ill healthalso prevented Carey from promoting the album, resulting in a huge lossfor EMI.
Carey's previous albums such as Music Box have sold as manyas 20 million copies. EMI, the world's third largest music group, hasbeen under severe pressure to brush up its act, especially in the coreU.S. market, after two failed merger attempts–first with WarnerMusic and then with BMG. EMI shares fell 35 percent last year. OnMonday, they were trading 2.7 percent down in London. The musicindustry as a whole also suffered its worst year ever in 2001 after theSeptember 11 attacks compounded already low growth due to piracy andwaning CD sales, battering majors that also include Sony Music andUniversal. EMI brought Levy on board in October to replace Ken Berryafter the group posted a dismal first half performance and warnedfull-year profits would dive 20 percent. Levy's strategic review of thebusiness is due to be completed early this year. EMI Chairman EricNicoli has said further job losses may be made while labels areexpected to be restructured and rationalized. In a move to cut costs ina shrinking industry, a number of music groups have been offloadinghigh-profile artists who do not sell enough albums to warrant costlycontracts.