Terra Firma, the venture capital firm run by Guy Hands, hopes to appoint a new chief executive to run EMI by the end of January but question marks over the top three internal candidates make it unlikely that any of the trio will get the job.

The emerging perception is understood to be that none of EMI’s remaining leaders - Roger Ames, Tony Wadsworth and Jean-François Cecillon – appear to meet all of Terra Firma’s requirements for turning around the struggling music major behind Kylie Minogue and the Spice Girls. That makes an external appointment likely.

Mr Ames, the head of EMI in North America, is the most experienced of the three. He ran Warner Music before its sale by Time Warner and has been a millionaire since he sold London Records, home to New Order and Bananarama, to Time Warner in 1999.

Terra Firma, though, is keen on the idea of a chief executive who will have only a limited relationship with artists, leaving label executives freer to make their own decisions. Mr Ames is often closely involved in artist and music decisions, which may not be what the venture firm wants.

Mr Wadsworth, a long-time EMI executive, runs EMI’s UK business – traditionally the most important part of the company. Mr Wadsworth is close to key artists such as Damon Albarn, who is behind Blur, Gorillaz and The Good, The Bad and The Queen. Mr Wadsworth is also ultimately responsible for handling Coldplay, EMI’s best-selling act.

The EMI UK boss, who has run the British business since 2002, has presided over a year in which domestic market share has collapsed but is not blamed for problems that are pinned on the period when Alain Levy ran the recorded music business worldwide. Although Mr Wadsworth is seen as having strong musical taste, there are concerns that even greater management responsibility might distract him from developing acts.

Mr Cecillon runs EMI’s International division, which covers the rest of the world outside the US and UK. The Frenchman ran EMI UK between 1992 and 1998, signing Robbie Williams to the company after he split from Take That. After leaving the company, Mr Cecillon rejoined in 2004 to run the international business.

Questions have been raised about the effectiveness of the traditionally highly profitable international arm, which makes money by exporting British and American material overseas. The division has 1,100 artists on its roster and it is believed that there are too many acts to be promoted effectively by the operation. Guy Hands, currently executive chairman of EMI, is intending to become nonexecutive once a new leader is appointed, although he likes to be closely involved in businesses owned by the private equity firm he leads.



Record profits



Ten things we learnt about EMI this week.

—Terra Firma, the new owners, believe that they can find over £100 million of annual savings from cutting inefficiences from the previous management led by Eric Nicoli

—Terra Firma is contemplating a sale of EMI in 2012, which if its plans were met, would value the music company at £9.4 billion. Terra Firma bought EMI for £3.2 billion, including debt, after clinching 90 per cent of the company in August

—Citigroup, EMI’s lender, has lost an estimated £200 million on its £2.5 billion loan to Terra Firma - or would if it tried to syndicate the debt to other banks

—A company house in Mayfair, used as London digs by Eric Nicoli and other senior executives, is being sold for £5.6 million. It was originally bought for £500,000

—The bill for fresh fruit and cut flowers at the EMI headquarters was an estimated £200,000 a year. The bill to decorate a Los Angeles apartment used for EMI entertaining with candles came to £20,000 a month

—Allegations of large advances lavished on artists, including one incident where an artist received a $15 million advance, spent $250,000 on recording an album and kept the rest

—Radiohead were offered £3 million to stay with EMI for a one-album deal, but the British band opted to distribute their latest album, In Rainbows, over the internet

—Documents seen by potential co-investors show that Terra Firma believes it can boost profits in EMI’s recorded music arm from £61 million last year by more than eight times, to £528 million in 2012

—Terra Firma hopes to appoint a successor to Mr Nicoli by the end of January. The new chief is expected to be an outsider to the music business, however three internal candidates are also under consideration

—Allan Leighton, the chairman of the Post Office, is to join Terra Firma’s advisory team, which already includes Lord Birt, the former Director-General of the BBC, and Mike Clasper, former chief executive of BAA

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