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Warner Music Arm seeks Russian deal despite business suspension.music industry

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The Russian branch of Warner Music, home to artists such as Ed Sheeran and Dua Lipa, and executives of the French company Believe continue to try to broker deals despite the suspension of operations after the invasion of Ukraine. was learned by the Guardian.

The $15 billion (£13 billion) listed Warner Music, owned by Sir Leonard Blavatnik, a Ukrainian-born billionaire with U.S. and British citizenship, owns ADA Russia and is responsible for the likes of Zemfira and Gorky Park. We work with local independent labels and artists. His broader ADA operations list artists such as YouTuber and rapper his KSI as clients.

Marketing emails sent by top ADA Russia executives, located within Warner Music offices and whose staff have Warner Music email addresses, have been around since the parent company announced the suspension of all operations in Russia. A month later, I tried to forge a deal with a local label. Russia in March.

The email, sent in April and seen by The Guardian, was intended to discuss “potential cooperation”, offering premium rates to various music services and a series of Russian companies already represented by the company. I am quoting the artist.

“I would like to note that our streaming rates are much higher, we can also do analog releases and offer advanced analytics,” the executive said in an email. “Everything is ready. I would like to show it by example. We would like to meet with you in person to discuss all opportunities and potential cooperation.”

Warner Music Russia’s self-proclaimed distribution arm does not work with well-known international artists signed to the world’s third largest record label.

The email said on March 10 that it would “suspend operations in Russia, including project investment and development, promotion and marketing activities, and manufacturing of all physical products” after the February invasion of Ukraine. It is in direct contradiction to the Warner Music Group announcement of

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

“We stopped operations in Russia in March,” he said. “This email is over 5 months old for him and should never have been sent. We are investigating what happened and have repeated the suspension rule to our local team. .”

Despite violations by music executives, it is not believed that Russian businesses routinely operate in violation of Warner Music’s rules.

But French music group Believe, which has worked with artists such as Slayer and La Roux, is much more active in Russia, including paying for a local streaming service that until recently was owned by Russia’s biggest lender Sberbank. continues. It is on UK, EU and US sanction lists.

Believe, one of France’s biggest tech companies, worth more than €800m (£702m) on the Paris Stock Exchange after the invasion of Ukraine, has advised its Russian partners on how to continue to evade sanctions. , also said that sanctions remain in full compliance with international sanctions.

The Guardian’s investigation found that the company has suspended hiring and new investments in Russia, suspended activities including music releases for independent artists who use its services, and has directly partnered under international sanctions. It said it had ended its relationship with local labels and artists.

However, Denis Gorshkov, managing director of Believe’s Russian operations, has revealed that he is still trying to sign artists and create a new catalog.

One email seen by The Guardian contains a follow-up on a “new offer” of €3 million by the Russian label to “monetize new releases and past catalogues.”

The company said it was not a new investment in Russia, but a new contract with an existing partner, so it would not break a promise it made in March.

A spokesperson for Believe said, “Believe has chosen to continue its business with local clients, artists and partners in the Russian market, in a commitment to peace and in compliance with all applicable laws and regulations.” says. “Believe maintains all its operations in Russia to support artists and labels, keep people safe, and ensure access to music production and distribution. It’s about protecting the creations, artists, music and people inside and supporting both the team and the people.”

Founded in 2005, launched in the UK in 2010 and listed on Euronext last year, Believe also continues to employ staff in roles such as label managers and creative producers.

A Believe spokesperson said the new hires replace natural staff turnovers and do not represent expansion of the company’s operations in Russia.

The company does business with local streaming service SberZvuk, which until recently was owned by state-owned Sberbank, according to a financial report on the Russian artist’s Believe activity seen by The Guardian.

In May, Sberbank, which acquired the streaming service in 2020 and made rivals to Apple Music, Spotify and local rival Yandex, was part of a broader sale of positions at Russian tech companies after the invasion. , sold its shares.

A month later, the UK also added the streaming service’s new owner, JSC New Opportunities, to its list of sanctioned companies, declaring that the deal with Sberbank was “a It is said that it means “to be involved in On strategically important areas: business in the field of Russian information, communications and digital technology ”.

Zvuk’s new owner, JSC New Opportunities, is not EU licensed.

“Believe confirms that its assessment concluded that Zvuk was neither placed under the EU nor subject to US sanctions with respect to Believe’s activities,” the company said. “If Zvuk is under European Union and/or US sanctions at any time, Believe will immediately remove all catalogs from this platform and terminate partnerships of any kind.”

The company owns brands such as New York-based music distribution platform TuneCore, and in 2018 became one of rock and metal music’s largest labels, home to artists such as Slayer, Sepultura and Machinehead. Bought control of a German Nuclear Blast.

Other music labels listed on Believe’s brand page include: AFM Records with Anvil and Lordi on their roster. Naïve, home of France’s Act M83 and Youssou N’Dour.

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