EMI seeks buyer for Abbey Road studios
LONDON (AP) -- The long and winding road of Beatles history has taken a new twist.
Cash-strapped music company EMI Group Ltd. is seeking a buyer for Abbey Road, the London studio where the Fab Four recorded some of their most famous songs, a person familiar with the situation said today.
The person said talks had been going on for several months but a buyer had not yet been found. The individual spoke on condition of anonymity because the talks are private.
A spokesman for EMI refused to comment on the sale bid, which could raise tens of millions of dollars for the struggling label.
Analysts said the sale price would be far short of the $165 million EMI needs to survive, and would mean giving up one of its most high-profile assets -- not just a recording studio, but a tourist attraction and shrine for Beatles fans.
"It's like throwing sandbags off the crippled balloon," said Adrian Drury, an analyst at Ovum Securities. "It is not going to help its cash situation that much. But EMI management are trying to desperately raise cash wherever they can, so the normal rules don't apply."
EMI, whose artists include Coldplay, Lily Allen and Robbie Williams, has struggled financially since it was bought in 2007 for 2.4 billion pounds by private equity firm Terra Firma Capital Partners.
EMI has fared worse than the other major labels -- Universal, Sony BMG and Warner Music Group -- amid the decline of CD sales and the rise of digital music downloading.
Several big-name acts, including Radiohead and the Rolling Stones, quit the label amid the cutbacks and restructuring that followed Terra Firma's takeover.
An audited report released earlier this month revealed that Terra Firma needs a huge cash infusion by June to avoid defaulting on its loans from Citigroup Inc. and may require more than $165 million to last through this year.
If funds can't be raised and the loan goes into default, Citigroup could seize EMI and cause it to be sold or broken up.
EMI's predecessor bought the Georgian town house at 3 Abbey Road in London's residential St. John's Wood neighborhood for 100,000 pounds in 1929 and turned it into one of the world's most sophisticated recording studios. Edward Elgar recorded "Land of Hope and Glory" with the London Symphony Orchestra there in the 1930s. It is still used by orchestras; the soundtracks of the "Harry Potter" and "Lord of the Rings" films were recorded at Abbey Road.
Since the 1960s it has been one of the world's most famous rock music studios. Albums recorded there include Pink Floyd's "Dark Side of the Moon," Wings' "Band on the Run" and Radiohead's "OK Computer."
It is most closely associated with The Beatles, who made most of their recordings from 1962 onwards at Abbey Road, developing an ever-more sophisticated sound under producer George Martin.
The crosswalk in front of the studio was immortalized on the cover of 1969's "Abbey Road," the final studio album The Beatles recorded. "Let it Be" was the band's final release, in 1970, but it was recorded before "Abbey Road." Paul McCartney still lives nearby.
"The thought of a property speculator coming in, knocking it down and building flats doesn't bear thinking about," said Pete Nash, chairman of the British Beatles Fan Club. "If I had the money, I'd buy the place."
The lack of buyers so far for Abbey Road may reflect tough times for recording studios. Technological advances that let musicians make sophisticated recordings on a laptop computer have put pressure on facilities like Abbey Road.
"Modern recordings can be done these days in somebody's bedroom," Nash said. "I think the glory days of Abbey Road are long gone. it might be more valuable as a museum."
Potential buyers beware, however: the famous black-and-white crossing is not included in the deal.