Warner Music Arm Seeks Russian Deals Despite Business Ban | Music industry


Executives from the Russian arms of Warner Music, home to artists including Ed Sheeran and Dua Lipa, and French company Belive are trying to broker deals despite business being disrupted after the Ukraine invasion, according to The Guardian.

The $15bn (£13bn) publicly listed Warner Music – owned by Sir Leonard Blavatnik, a Ukrainian-born and UK-born singer – owns ADA Russia and works with artists such as Zemfira and Gorky Park. The sprawling ADA operation lists artists including YouTuber and rapper KSI as clients.

A marketing email sent by a senior executive at ADA Russia, located in the Warner Music office and whose employees have Warner Music email addresses, attempted to do business with local labels nearly a month after the parent company announced it was suspending all operations. Russia in March.

The email, sent in April and seen by the Guardian, sought to discuss “possible cooperation”, offering premium prices for various music services and mentioning Russian artists the company already represents.

“I would like to note that our streaming prices are very high, we can do vinyl releases as well and we offer advanced analytics,” the executive said in an email.

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

The email directly contradicts Warner Music Group’s statement on March 10 that it had “ceased operations in Russia, including investments and project development, promotional and marketing activities, and production of all physical products” after the February invasion of Ukraine.

A spokesperson for Warner Music Group confirmed that the executive was not supposed to be doing business in Russia and that an investigation had been launched.

“We stopped our work in Russia in March,” he said. “This email is over five months old, but should not have been sent. We are investigating what happened and have reiterated our ban to our local team.

The breach by the music executive is not thought to be a daily violation of Warner Music’s rules, though.

However, French music group Believe, which has worked with artists including Slayer and La Roux, continues to perform highly in Russia and until recently was on the UK, EU and US sanctions lists by the country’s biggest lender, Sberbank.

Believe, one of France’s biggest tech businesses, which is valued at more than €800m (£702m) on the Paris stock exchange after the Ukraine invasion, has advised Russian partners to continue working around the sanctions, saying they remain in place. Compliance with international sanctions.

After the Guardian’s investigation, the company said it had stopped hiring and new investment in Russia and streaming music from independent artists who use its services, as well as cutting ties with artist labels and artists it works directly with under international sanctions.

However, Denis Gorshkov, managing director of Belive’s Russian operations, appeared to continue trying to sign deals with artists and new catalogs.

An email seen by the Guardian included a €3m “new offer” with a Russian label to “monetize new releases and back catalogues”.

The company does not break the promise made in March because it is a new agreement with the current partner and not a new investment in Russia.

“Faith is committed to peace and has made the choice to continue working with local clients, artists and partners in the Russian market,” a Faith spokesperson said. “Faith is protecting all operations in Russia to support its artists, protect the safety of its people, and ensure access to music production and distribution.” Faith’s mission will always remain to protect creation, artists, music and its people around the world and to support both groups and people.

The trust – which was founded in 2005, launched in the UK in 2010 and floated on a euro charge last year – also continues to hire for roles including account manager and creative producer.

A spokesperson for Believe said the new hires are not intended to replace natural employee turnover and represent an expansion of its Russian operations.

A financial report showing a Russian artist’s dealings with Believe, seen by the Guardian, shows that he does business with SberZvuk, a local streaming service until recently owned by state-controlled Sberbank.

In May, Sberbank, which acquired the streaming service in 2020 to create a competitor to Apple Music, Spotify and domestic rival Yandex, sold its stake as part of a diversification of positions in Russian tech companies after the raid.

A month later, the United Kingdom added JSC New Opportunities, the owner of the streaming service, to its list of sanctioned businesses, saying that the agreement with Sberbank meant that it was “involved in receiving or supporting the Russian government’s interests in carrying out its activities in a strategically important sector, namely Russia’s information, communications and digital technology sector.” in business.

JSC New Opportunities, the new owner of Zvuk, is not recognized by the EU.

“Believe’s review concluded that Zvuk has never been subject to EU, and there are no US sanctions regarding Believe’s activities,” the company said. “

The company owns brands including TuneCore, a New York-based music distribution platform. In 2018, he bought a controlling stake in Germany’s Nuclear Blast, one of the biggest labels in rock and metal music, including Slayer, Sepultura and Machinehead.

Other music labels listed on Believe’s brands page include: Allpoints France, which has worked with Björk; AFM Records with Anvil and Lordi on the list; and Naive, home to French acts M83 and Youssou N’Dour.



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