French Independent Label Trade Body Urges French Government to Support Believe Against Warner Music Takeover
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French independent label trade body the Union des Producteurs Phonographiques Français Indépendants (UPFI) has issued a statement calling on the French government to support Believe against a potential hostile takeover by Warner Music Group. The UPFI emphasizes the “potentially devastating consequences” if Warner is allowed to proceed with its proposed acquisition of Believe. According to UPFI, Believe, as a distributor of numerous French labels and artists worldwide, plays a crucial role in the music ecosystem and must remain independent.
Believe is seen as a model of success and resistance against the consolidation trend present in the music industry, where significant distributors have been acquired by larger entities, such as Sony Music’s acquisitions of The Orchard and AWAL. The UPFI is concerned about the impact a Warner takeover could have on Believe’s independent status.
The recent developments surrounding Believe’s potential takeover have been marked by regulatory scrutiny. The French financial markets authority, AMF, rejected a request by a consortium led by Believe’s founder and CEO Denis Ladegaillerie for a waiver of board approval conditions related to their bid. This move could potentially accelerate the timeline for Believe’s acquisition and potentially exclude Warner from making a competing offer.
Warner had expressed informal interest in acquiring Believe at a suggested price of €17 per share. However, the AMF ruled that the board waiver sought by the Ladegaillerie consortium was not compliant with French takeover regulations. Subsequently, Warner was granted access to necessary data to make a formal bid for Believe. The independent board directors of Believe invited Warner to submit a binding, unconditional, and fully financed offer by April 7.
UPFI has outlined three main concerns regarding a potential Warner acquisition of Believe. Firstly, it warns that music creation in France could suffer if Believe shifts away from investing in local music production. French-produced music has been successful both domestically and as a significant cultural export. UPFI highlights the importance of supporting French music creation.
Additionally, UPFI raises concerns about potential job losses in France if Warner were to acquire Believe. Warner’s recent layoffs following previous acquisitions have raised fears of further staff cuts if a similar scenario were to occur at Believe.
Lastly, UPFI warns that a Warner takeover of Believe would contribute to the consolidation trend in the global music market, which is largely dominated by a few major players. Believe’s role as a French ‘unicorn’ and a significant player in Europe’s music industry makes it an essential voice of French soft power. Preserving Believe’s independence is crucial for maintaining diversity in business models and safeguarding France’s cultural and economic sovereignty.
UPFI calls on the French government to intervene and show support for Believe in order to preserve investment in music, business model diversity, and France’s cultural and economic interests. The outcome of the potential takeover bid by Warner, the Ladegaillerie consortium, or other parties remains uncertain, with only time revealing the next steps in this development.