Warner Music arm seeks Russian deals despite business suspension - 3 minutes read

Executives at the Russian arms of Warner Music, home to artists including Ed Sheeran and Dua Lipa, and French company Believe, have continued to try to broker deals despite the suspension of business after the invasion of Ukraine, the Guardian has learned.

A marketing email sent by a top executive at ADA Russia, which is located within Warner Music’s offices and whose staff have Warner Music email addresses, tried to drum up business with local labels almost a month after its parent company announced a suspension of all operations in Russia in March.

“I would like to note that our streaming rates are much higher, we can do vinyl releases as well, and we offer advanced analytics,” the executive said in the email. “Everything is ready, and we’d like to demonstrate it in examples. We would like to meet up with you and discuss in person all the opportunities and our potential cooperation.”

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

However, French music group Believe, which has worked with artists including Slayer and La Roux, is continuing to operate in Russia on a much larger scale including making payments to a local streaming service that until recently was owned by the country’s largest lender, Sberbank, which is on UK, EU and US sanctions lists.

After the invasion of Ukraine, Believe, one of France’s biggest tech businesses, which is valued at more than €800m (£702m) on the Paris Stock Exchange, advised Russian partners how to continue to work around sanctions while also saying it remained in full compliance with international sanctions.

After a Guardian investigation, the company said that it had stopped hiring and new investment in Russia and suspended activities including releasing music from independent artists that use its services, as well as terminating relationships with local labels and artists it works with directly under international sanctions.

“Believe has pledged for peace and made the choice to continue to operate with its local clients, artists, and partners in the Russian market in compliance with all applicable laws and regulations,” said a spokesperson for Believe. “Believe is maintaining all its operations in Russia in order to support its artists, labels and protect its people’s safety as well as ensure access to music production and distribution. Believe’s mission always remains to protect creation, artists, music and its people all over the world, and to support both teams and people.”

A month later, the UK also added the new owner of the streaming service, JSC New Opportunities, to its list of sanctioned businesses stating that the deal with Sberbank meant it is “involved in obtaining a benefit from or supporting the government of Russia by carrying on business in a sector of strategic significance, namely the Russian information, communications and digital technologies sector”.

“Believe confirms that its assessment concluded that Zvuk has never been under EU, neither US sanctions regarding Believe’s activities,” the company said. “Should Zvuk be under European Union and/or US sanctions at any time, Believe will immediately drop out all its catalogue from this platform and terminate any kind of partnership.”

Source: The Guardian

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