EMI Group announced today (Jan. 25) that the company is merging
its Capitol and Virgin music labels to form
The Capitol Music Group, a new pop, rock and urban label that will comprise the
Capitol and Virgin Records imprint.

The new label group will also house the Capitol Nashville imprint, Caroline
Distribution, EMI Christian Music Group; EMI Televisa Music; and Mute. The Capitol
Music Group will be headed by Lava Records founder and former Atlantic executive
Jason Flom, who broke such artists as Kid Rock, Twisted Sister, Sugar
Ray, The Coors and others.

Flom joined EMI as Chairman and CEO of Virgin Records America in November 2005
and will report directly to EMI”s chairman, Eric Nicoli. Flom will oversee the
combined Capitol and Virgin rosters in the US, which includes artists like Chingy,
Jazze Pha and Cee Lo Green, Cherish, Bubba Sparxxx, Letoya Luckett, Korn, Lenny
Kravitz, Robbie Williams.

"The music business shows exciting growth potential, but the environment
remains extremely challenging," Nicoli said. "In order to thrive and
meet the demands of a rapidly evolving and dynamic music market, we must re-think
our operations, not only to make them efficient, but also more effective and
focused on creative excellence. By bringing Capitol and Virgin into one label
group, we will be better equipped than ever to promote and nurture artistic
talent. We remain strongly committed to developing artists in America in all
genres as this is a key repertoire source for the world, and to that end, we
will maintain our A&R focus and keep a presence in both LA and New York.
This structure will also allow us to further build our digital capability.”

Capitol Records” U.S. president/CEO Andrew Slater will step down from his position,
which he has held since 2001. EMI is in the midst of being restructured, in
an attempt to save $217 million.