The next Coldplay album could be brought to you by Sudafed, under plans being unveiled by Guy Hands today to boost EMI's flagging earnings with corporate sponsorship.
The Terra Firma chief executive told the FT his private equity group's plan for EMI would include several new ways of making money for artists.
"Football teams have very distinct corporate sponsorship. Why shouldn't some of the leading bands have the same sort of relationships?"
As an example, he said EMI could help bands who would not make it on the international stage find local sponsors who want to break into the student market.
Mr Hands will today present staff and artists' managers with plans to cut £200m of costs at the struggling music group.
He dismissed outsiders' claims that his purchase could face financial trouble. Citigroup - which financed the £4bn EMI deal - had agreed for his buy-out fund to put £200m of extra equity into the company last year, he said, and Terra Firma had raised £250m of cash from co-investors in its funds in the past week.
The extra equity allowed Citigroup to reduce its debt exposure to the deal from £2.7bn to £2.5bn. The co-investor fundraising has re-duced Terra Firma's equity stake from £1.5bn to £1.25bn, still a large share of its latest £3.7bn fund, and raised money for restructuring and acquisitions.
"From a financial point of view, EMI is in an extremely strong position, and frankly is in the strongest position it has been for a long time," Mr Hands said.
Terra Firma has agreed "unlimited cure rights" with Citigroup, giving it more flexibility on financial covenants by counting any fresh equity it puts into EMI as operating profit until 2010. Terra Firma expects returns on EMI to be between 30 per cent and 35 per cent a year over the course of its five-to-eight year investment.
When he reveals plans to cut 1,500-2,000 jobs - a third of EMI staff - Mr Hands will also present a vision of how to tackle the challenges of the internet era.
The Terra Firma boss dismissed claims that artists would suffer, arguing he was doing what musicians and their managers have long called for.
EMI's marketing budget will shrink from over 20 per cent of total spending to 12 to 15 per cent. But Mr Hands plans to boost spending on digital marketing.
Acquisitions will probably focus on EMI's more stable music publishing business.
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