Mariah Carey’s contract buyout by EMI was a topic on CNN’s Money Line earlier this week where experts discussed the financial implications for the company and the music industry in general. Read on for a transcript, thanks to Mariahsweb.com.
CASEY WIAN, CNN CORRESPONDENT: EMI records this week agreed to pay Mariah
Carey $28 million to escape its four-year, $80 million contract with the
fallen star. Last year, EMI paid another $21 million for Carey’s critically
and commercially disappointing album, “Glitter.” Still, considering production
and marketing costs for three more albums, dropping Carey saved EMI’s Virgin
Records about $50 million.
Record companies are now paying dearly for signing acts to huge multi-year
contracts. Most labels lost money last year, while album sales fell for
the first time in at least a decade.
PETER BART, “VARIETY”: Good evening.
PILGRIM: Let’s talk about the headlines were dominated by Mariah Carey
being bought out of her contract. What a buy out, $28 million.
BART: That’s right.
PILGRIM: What a contract, $80 million.
BART: But you know an $80 million deal for the company that just lost
$80 million in the last six months always sounds a bit ominous, doesn’t
PILGRIM: Yes. It’s a coincidence that number. What do you make of the
buy out? And is there any downside risk for the company?
BART: Of course there’s — whenever you see a buyout like that, you
know, there’s a new management. Alain Levy has come in to run EMI Virgin
Records and the new management in any industry always sees everything differently.
But you know this case, Mariah Carey’s life reads like a bad pop novel.
You know, the unknown, discovered by the company’s president, marries the
company’s president, becomes a superstar, makes an album like “Glitter”.
And, of course, “Glitter” fizzles and now she is being bought out.
PILGRIM: Well, there’s no such thing as bad publicity, I guess, in this
business because she certainly generated enough ink this week. What if
she makes this comeback? It’s such a story. Isn’t there a risk?
BART: Well, of course, remember she is going to sing the “National Anthem”
at the Super Bowl, so she is not exactly disappearing from the scene. I
think the risk is to EMI really because if she comes back and makes a big
hit somewhere else, then they look rather foolish, don’t they. Of course,
these big deals are in style. Whitney Houston has a hundred million dollar
deal from Arista. But again, in the music industry, as in film and television,
so much is being banked on the superstars, that if the superstars don’t
perform, the companies look rather silly.
PILGRIM: These numbers are mind boggling. What does it say about the
recording industry in general that these numbers exist and yet business
is not that good, is it?
BART: Well, the music business is dominated by three giant companies
and it’s up to them to nurture creative talent because they’ve really bought
out all the independents. And the big question mark is whether these multinationals
can nurture new talent. In the music industry, this has not worked. I think
overall sales are down five percent from last year. That’s a pretty hefty
decline when you consider that the movie business has had a tremendous
year and is very much counterrecessionary. I mean, business is strongly
on the uptake in film.