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Like Succession meets Spinal Tap: how Britain's best record label collapsed
Early in 2008 Mick Jagger had lunch with the City mogul Guy Hands, the new owner of the Rolling Stones' record label, EMI. The Stones' contract was up and Hands presented the band's frontman with a PowerPoint of innovative ideas to retain the biggest rock band in the world. It included a Rolling Stones-themed board game, a Rolling Stones Guitar Hero video game and a reality TV show called Stones Idol. Hands suggested that Mick and Keith would host their own wild version of The X Factor, judging clueless wannabe rock stars. The best part? Contestants would stay in a Rolling Stones-themed hotel, complete with pre-trashed rooms.
Recollections differ about what happened next. Hands insists the meeting ended cordially, while an EMI staffer claims that Jagger went to the loo and never came back. What isn't in doubt is that the Stones ditched EMI shortly afterwards and signed with its arch-rival Universal, one of a slew of mega-artists to abandon EMI shortly after Hands's takeover in 2007.
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A couple of years later the entire company collapsed. My new BBC podcast, Music, Money and Mayhem, exposes the carnage that unfolded when the City suits seized Britain's most successful record label and faced an uprising of furious artists. I've interviewed Hands, several household name musicians and more than a dozen former executives, who spill the beans on a saga that feels like Succession meets Spinal Tap. It's a cautionary tale of money versus art, which reveals why one of the UK's most prized cultural jewels exploded for ever.
Johnny Marr viewed EMI as the Buckingham Palace of record companies, and for decades it had been the label that every band wanted to join. It was behind the Beatles, Queen, Pink Floyd, David Bowie and Duran Duran, and in the 1990s EMI rode the Britpop wave with Blur, then took on the world with Radiohead, Coldplay and Robbie Williams. Meanwhile, the CD boom enabled the company toresell its classic albums to fans all over again, generating an avalanche of cash. This colossal windfall fuelled a bacchanalian corporate decadence, from the infamous 'fruit and flowers' budgets (a euphemism for company spend on alcohol and drugs) to the notorious 'sex lift' in Virgin's head office, stuffed with poppers and dildos.
But at the turn of the millennium the music suddenly stopped, as the emerging internet ravaged the record business. I was one of millions of fans who stopped buying CDs and instead downloaded tracks for free on illicit file-sharing services such as Napster. By 2007 EMI was facing oblivion and was saved at the eleventh hour by a private equity firm, Terra Firma, which bought the company outright. Its owner was Hands, widely viewed as a ruthless City financier with a reputation for slashing costs and brutal restructuring. He had no experience in the music business, having previously made millions turning around German service stations by upgrading their toilets. His surprise takeover set off alarm bells with EMI's nervous artists.
'It was a bit like when the Khmer Rouge took over Phnom Penh,' Neil Tennant from the Pet Shop Boys says. 'Everyone thinks, well, at least the war's over … And then a few days later the massacre starts.'
Hands immediately installed himself as EMI's chief executive, which was a bold move given he had never run a record company before. Even more surprisingly, he had no auditory memory. 'Every time I hear music I'm effectively hearing it for the first time,' he admits. He had just bought the most valuable songs in the world, from Penny Lane to Bohemian Rhapsody, and couldn't remember a note.
'I was coming in there with a very hard-nosed view about where we were going to make money,' says Hands, who set about monetising the company's huge back catalogue. This led to EMI's biggest names being pitched some very bizarre ideas, including a novelty Coldplay toothbrush that played Yellow as it brushed. Another brainwave was for the famously anti-consumerist band Radiohead to do a marketing tie-in with the bland department store Next.
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This was merely a skirmish in the bitter feud that unfolded between Hands and Radiohead, which has been exclusively revealed to us by their guitarist Ed O'Brien. Radiohead had enjoyed a hugely successful partnership with EMI for more than 15 years, during which they released the seminal Nineties albums The Bends and OK Computer, but by the mid-Noughties their contract was up. O'Brien recalls the City takeover as their 'biggest nightmare' as Hands epitomised the financial system that their music railed against: 'We're interested in the dark side of global capitalism, and this is part of it.'
Hostilities were inflamed by Hands' unshakeable belief that bands should be viewed as brands.'Brands is like the dirtiest word for artists,' O'Brien says. 'We're not a f***ing brand. Those financial guys, they just don't get it.'
The EMI brass remained hopeful that they could still release Radiohead's next album, but in October 2007 the band ambushed their corporate owners and released In Rainbows free online, asking fans to pay whatever they felt it was worth. It set off a bomb across the music business as it completely bypassed their record label and delivered a massive two fingers up to Hands. He retaliated by releasing an unauthorised box set of their studio albums in December, leading Radiohead's singer Thom Yorke to sulk to Word magazine that it 'f***ing ruined his Christmas'.
It was soon open warfare between the City suits and EMI's artists, as Queen followed Radiohead out the door after negotiations with Terra Firma executives collapsed. Robbie Williams's manager lambasted Hands in The Times as a 'plantation owner'.
The spat followed the catastrophic sales of Williams's Rudebox album, and Hands revealed that the unsold CDs ended up getting crushed and used for surfacing roads in China. Joss Stone was told that her £12 million advance was being slashed to the bone, leading to a tearful confrontation in Hands's executive office. Hands remained unmoved, so Stone's dog, Dusty Springfield, performed a dirty protest on his carpet. 'I'd like to think it was accidental, but if it was deliberate, more power toher,' he says ruefully.
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Lily Allen spotted Hands in the audience at one of her concerts and changed the lyrics to F*** You to 'f*** you, EMI!' in his honour. Hands had never been in the spotlight and became overwhelmed with stress. 'I couldn't go into a restaurant in London without someone coming up to me and wanting to talk to me about EMI. My kids were finding it difficult because all their friends would do was talk about your dad and EMI.' He suffered panic attacks, became a recluse and describes himself as an 'unkempt-hair, overweight, burger-eating monster'.
But lurking in the shadows was a darker danger than hectoring pop stars. Hands had bet the farm on EMI and borrowed billions from Citigroup on an astonishingly thin contract. 'Frankly, I can find more information on a fag packet than was in that document,' he says. The financial crash had decimated the financial markets and the investment bank wanted its money back. Against all the odds, Hands returned EMI to profit in 2009 but it wasn't enough to save the label. The bank foreclosed in 2011 and EMI was broken up and sold off for parts.
Hands looks back on these as the darkest days of his life: 'I wasn't really relieved. I just wanted to go to sleep for as long as possible and frankly not wake up again.' Hands stepped down from Terra Firma in 2023 and now lives in Guernsey.
It was the biggest financial disaster in the history of British music but it would be unfair to tar Hands as a corporate vandal who destroyed a golden goose. Tacky toothbrushes aside, some of his reforms were years ahead of their time. He introduced a revolution in market insights, which was fiercely resisted by the EMI old guard at the time but has now been adopted across the music business. Handsembraced digital distribution and even invested in a start-up called Spotify.
He lost everything when EMI collapsed, but if he had clung on to the company until the market in recorded music rebounded (as it did later in the 2010s), he would have made billions.
It would also be wrong to paint EMI executives in the 2000s as coke-guzzling soaks who ran the label into the ground. The internet capsized the entire music industry at that time, and EMI only fell further because it was a standalone company, unlike Sony and Universal. EMI had cultivated 'magic ears' in its A&R department who had a golden touch for finding the best British artists, starting with four plucky lads from Liverpool in 1962. EMI's music has been the soundtrack to my life. It's a great loss to us all that this once great cultural powerhouse is no Money and Mayhem is on BBC Sounds from July 7
