[PIAS] founders explain why they sold 49% of their company to UMG: ‘The battle lines in our industry have been redrawn.’

The indie music giant[…][[PIAS]revealed on Wednesday (November 30), that Popular music group made a minority investment in the company.

Agreement, which sees UMG buy 49% shares inside [PIAS] Group for an undisclosed amount, after the two companies formed a global strategic alliance in June 2021.

In a letter to [PIAS]of partners on Tuesday (November 29), the day before the deal was announced, the independent company founders, Kenny Gates and Michel Lambot, outlined the background and reasoning behind the decision. them to make an agreement with UMG.

In the note obtained by MBW, Gates and Lambot wrote that they have “have built an effective and mutually trustworthy working relationship with UMG” over 18 months since joining their global alliance last June.

UMG has “clearly demonstrated to us that they understand and value the importance of [PIAS] market as an independent global music company serving independent labels and artists,” added Gates and Lambot.

“For this reason, we recently approached UMG about their investment in [PIAS] that would allow us to retain majority control over the company.”

The duo explained that they “felt this was a sensible choice given the increasingly challenging economy and uncertain geopolitical environment”.

“We recently approached UMG about their investment in [PIAS] that would allow us to retain majority control over the company. We feel this is a logical choice given the increasingly challenging economy and uncertain geopolitical environment.”

Kenny Gates and Michel Lambot, [PIAS]

Further commenting on the reasoning behind the deal, [PIAS]’s founders wrote: “We also clearly see that the front lines in our industry have been redrawn.”

They continued: “Today, we are competing with technology and financial giants who do not appreciate the cultural importance of the artists and brands we have worked so hard for. construction, but see music only as a ‘asset’ that is ruthlessly exploited in exchange for a quick return, they added in their letter.

According to a press release issued on Wednesday (November 30), under their new agreement, “[PIAS] will remain completely independent and founders Kenny Gates and Michel Lambot will retain majority control of the company.”

The statement confirmed that “UMG will not have a seat on the company’s board of directors.”

You can read their letter to [PIAS]Partners of the full below.

Dear Partner,

Tomorrow morning, we will announce that Universal Music Group has invested in a minority stake in [PIAS] Coporation, group.

We want to make sure that you as our partner have been informed of this before the announcement is made. We would also like to take this opportunity to share some background and rationale for the decision to include UMG as a minority shareholder.

As we shared with you last June, we initially agreed to a strategic partnership with UMG to give us access to capital and allow UMG to use our international distribution network for some of their own repertoire.

Over the past 18 months, we have built a productive and mutually trusting working relationship with UMG, who have clearly demonstrated to us that they understand and appreciate the importance of [PIAS] marketed as an independent global music company serving independent labels and artists.

Because of this, we recently approached UMG about their investment in [PIAS] that would allow us to retain majority control over the company. We feel this is a reasonable choice given the increasingly challenging economy and uncertain geopolitical environment.

We also clearly see that the front lines in our industry have been redrawn. Today, we’re competing with tech and financial giants who don’t appreciate the cultural importance of the artists and brands we’ve worked so hard for, but see music only as an ‘asset class’ that is ruthlessly exploited in exchange for quick profits.

Therefore, we are pleased to confirm that UMG is now our partner and investor and [PIAS] will remain completely independent of Kenny and Michel retains most control of the company.

In addition, it is important to clarify that UMG will not have any seats in the [PIAS] Board.

This investment by UMG means we can continue to build on our offerings and deliver even better services to our partners in a still challenging, competitive and buying market. again. As one of the few globally operated and privately owned music companies remaining in the industry, we are committed to providing independent music labels and artists with the best service possible through Our one-of-a-kind international network is run by passionate and experienced music lovers.

We will continue to do our best to be a trusted and valuable partner to you and to all the other great record labels, artists and managers we are honored to be associated with. work together through both of our distribution companies. [Integral] and [PIAS] Label group.

Nothing has changed – it will still work as usual at [PIAS].

If you have any questions about this announcement or our plans for the near future, please get in touch.

We sincerely thank you for your trust and look forward to continuing long-term cooperation.

Kenny, Michel and [PIAS] Management Group Global Music Business