There’s no doubting the biggest global music industry story of the day: [PIAS] a 42-year-old powerhouse of independent music in Europe, has been fully acquired by Universal Music Group.
By sealing the deal, UMG now owns 100% of [PIAS] Group, having initially acquired 49% of the firm from its co-founders, Kenny Gates and Michael Lambot, in 2022.
Subsequent to the sale, [PIAS]’s label services arm, [Integral], will merge with Universal’s Virgin Music Group, significantly bolstering VMG’s reach, supply chain, and client base in the EU, the UK, and beyond.
Gates will join VMG’s board.
Meanwhile, [PIAS]’s owned and associated labels operation, the [PIAS] Label Group (PLG), will also become owned by UMG – but, importantly, it will be run as a “completely autonomous, standalone company”, led by Gates as its CEO.
That’s according to Gates in an internal email to his team, sent earlier today (October 15) and obtained by Music Business Worldwide.
This memo confirms that PLG will now become a client of the newly-merged Virgin Music Group/[Integral] setup. But, says Gates, “that’s as far as the association will go. There will be no other interaction with the wider UMG organisation.”
(The implication there, though not overtly stated, is that Gates has insisted on managerial autonomy for him and the team around him running PLG, as part of what he calls a “long-term contract” he has signed with UMG.)
You can read Gates’ message to staff – complete with its “f**k the haters” pronouncement – in full below…
Dear [PIAS] team member,
As you may have already heard Michel and I have decided to sell the remaining shares we own in [PIAS] to our existing partners at Universal (UMG).
Before we talk about this agreement in the media and to other people outside of the company, we felt you deserved to hear a bit more detail and context directly from us.
We know that – like it is for both of us – this company is a big part of your lives and that together we have all created a special and unique culture that we are proud of and that we all cherish.
So firstly, we wanted to make something very clear: Michel and I took the initiative on this decision to sell our remaining shares. Nobody, least of all our partners at UMG, railroaded us into selling or forced us to do anything against our will; the decision was ours.
It’s important that everyone understands this, because the reasons behind this decision were both personal and commercial.
As part of this agreement, I have committed to a new, long-term contract. Michel, however, has decided to step down from his day-to-day duties but will remain a valued advisor to the company moving forward.
We have sold our shares but not our souls.
Put simply, I love what I do and I am very excited by the prospect of business success and artistic discovery ahead of us. On the business side of things this decision was commercially pragmatic but also a natural outcome of the mutual respect and the trust that has grown in the last few years between us, Sir Lucian Grainge, Boyd Muir and other members of the senior management team at UMG.
Whilst in the past we have seen independent companies such as ours having been acquired by big corporations lose their individual identities and cultures, I can assure you that is not going to happen to us. There is bound to be some speculation about what is going to happen, but let’s all focus on forging an amazing future for ourselves.
Sir Lucian Grainge, the CEO of UMG, has a clearly defined and proven strategy to partner with independent entrepreneurs such as us while valuing and encouraging our culture and helping it flourish. We have asked for and received both personal and contractual guarantees that this will remain the case.
So, here’s what is going to happen:
- [Integral], our distribution arm will merge with Virgin, UMG’s services and distribution team. Together we will become stronger in this increasingly competitive environment. As you may already know Virgin will use Integral’s physical supply chain, a clear indication that Virgin wants to – and will – become distinctive and separate from the wider Universal group.
- The [PIAS] label group (PLG) will remain a completely autonomous and standalone company. I will carry on leading it with the current management team. In the same way as our distributed labels, PLG will become a client of Virgin – Integral for global distribution but that’s as far as the association will go. There will be no other interaction with the wider UMG organisation. I will report directly to Sir Lucian Grainge and Boyd Muir, and together we will make decisions that are in the best interests of PLG and the artists we represent.
- In the UK PLG will be moving into new premises in Bermondsey and the Virgin team will be moving into our current offices.
- For all of our offices outside of the UK nothing will change for the foreseeable future.
We will be reviewing our operational structures and there may be some marginal impact on how we organise staffing moving forward but rest assured, we are not planning radical changes.
I hope you will be as excited as I am about this new era for our company. Throughout our 42 years of existence, we have always been at our best when we are evolving and adapting to the needs of the wider music industry.
I remain fully committed to the independent ethos and community and I will carry on being the CEO of the [PIAS] label group whilst also taking on a senior role on the Virgin board. As such I will be able to make sure the labels we represent are looked after and afforded the care and attention we have always given them.
As for our artists, I am convinced that the autonomy we will continue enjoying, combined with the resources we now have access to will give us a fantastic opportunity to continue being passionate about bringing their music to as wide an audience as we can.
This first and foremost has to remain our raison d’etre.
Inevitably there will be some gossip, criticism and cynicism about all of this but I say this:
Fuck the haters
Let’s get to work and together usher in an even greater era of success!
Let’s stay committed to the romantic mission that has fuelled the business since 1982, namely – sign and work with great music and people, nurture our culture, make money and provide great service.
I want to thank you again for your dedication, loyalty and passion during our journey together.
Stefan Struever, the head of [PIAS] Germany wrote to me this week after returning from a Nick Cave show saying simply, “Oh boy, do I love my job.”
I feel the same and I hope you do too.
All is well
KennyMusic Business Worldwide