Warner Music arm seeks Russian deals despite business suspension

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The Guardian has learned that executives from the Russian branch of Warner Music, home of artists including Ed Sheeran and Dua Lipa and French company Believe, have continued to try to broker deals despite the suspension of business following the invasion of Ukraine.

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The $15bn (£13bn) publicly listed Warner Music – owned by Sir Leonard Blavatnik, a Ukrainian-born billionaire with US and UK citizenship – is owned by ADA Russia, a local independent label and Zemfira and Gorky Park Like working with artists. Comprehensive ADA Operating Lists Artists including YouTuber and rapper KSI as clients.

A marketing email sent by a top executive in ADA Russia, who is based within Warner Music’s offices and whose employees have Warner Music email addresses, led to a local release almost a month after its parent company announced the suspension of all operations. Tried to increase business with label. Russia in March

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The email, sent in April and seen by the Guardian, sought to discuss “potential collaborations”, offering premium rates for a range of music services and citing a string of Russian artists the company already represents. Is.

“I would like to note that our streaming rates are very high, we can also do vinyl releases, and we provide advanced analytics,” the executive said in an email. “Everything is ready, and we would like to demonstrate this in examples. We would like to meet with you and personally discuss all opportunities and our possible cooperation.”

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The division, which calls itself the distribution division of Warner Music Russia, does not work with big-name international artists signed to the world’s third-largest record label.

The email directly contradicted Warner Music Group’s March 10 announcement that it was “Operations suspended in Russia”Investing in and developing projects, including promotional and marketing activities and manufacturing of all physical products, following the invasion of Ukraine in February.

A spokesman for Warner Music Group confirmed that the executive should not have done business in Russia and said it had launched an investigation.

“We suspended our operations in Russia in March,” he said. “This email is over five months old, but it should not have been sent. We are investigating what happened and we have also reiterated our suspension rules to our local team.”

Despite the infringement by the music executive, it is not thought that the Russian business is operating on a day-to-day basis in violation of Warner Music’s rules.

However, French music group Believe, which has worked with artists including Slayer and La Roux, continues to work extensively, including paying for a local streaming service in Russia, which recently became the country’s largest lender. , was owned by Sberbank. Which is on the UK, EU and US sanctions list.

Following the invasion of Ukraine, Believe, one of France’s largest tech businesses, valued at more than €800m (£702m) on the Paris Stock Exchange, advised Russian partners how to continue working around sanctions, While also said that it is completely made. Compliance with international sanctions.

Following a Guardian investigation, the company said it had halted hiring and new investments in Russia and continued to release music from independent artists using its services, as well as terminating relationships with local labels and artists. which operates directly under international sanctions.

However, it has emerged that Denis Gorshkov, managing director of Believe’s Russia operation, is continuing to try to sign deals with artists and for new catalogs.

An email seen by the Guardian includes a follow-up on a €3m “new offering” with a Russian label to “monetize new releases and back catalogues”.

The company said it does not break its pledge made in March because it is a new deal with an existing partner, not a new investment in Russia.

A spokesperson for Believe said, “Believe has pledged peace and has opted to continue working with its local customers, artists and partners in the Russian market in compliance with all applicable laws and regulations.” “Faith maintains all of its operations in Russia to support its artists, labels, and to ensure the safety of its people, as well as access to music production and distribution. Believe’s mission has always been to create, artists, and music around the world. And it has to protect its people and support both the teams and the people.”

Believe – which was founded in 2005, launched in the UK in 2010 and released on Euronext last year – has continued to hire staff for roles including label manager and creative producer.

A spokesperson for Believe said the new staff is meant to replace the natural workforce and does not represent an expansion of its Russian operation.

A financial report of a Russian artist’s activity with Believe, seen by the Guardian, also shows that it does business with local streaming service SberZvuk, which until recently was owned by state-controlled Sberbank.

In May, Sberbank, which Streaming service acquired in 2020 To create a competitor to Apple Music, Spotify and local rival Yandex, sold its stake as part of a wider disinvestment Number of positions in Russian tech companies after the invasion.

A month later, the UK also added the streaming service’s new owner, JSC New Opportunities, Approved occupations list Stating that the deal with Sberbank means that it is “involved in obtaining or supporting the benefit of the Government of Russia by doing business in the Russian information, communications and digital technology sector, namely in an area of ​​strategic importance”.

JSC New Opportunities, the new owner of Zvuk, has not been approved by the EU.

“The belief confirms that its assessment has concluded that Zwuk has never been subject to EU, nor US sanctions in relation to Believe’s activities,” the company said. “Should Zwuk be under EU and/or US sanctions at any time, the trust will immediately give up all its …


Source: www.theguardian.com

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