When the Warner Music Group, the home of Neil Young and Green Day, was sold in May for $3.3 billion, music executives and media analysts were pleasantly surprised. The higher-than-expected price, after a frothy auction that drew as many as 20 suitors, seemed to indicate an enduring faith in music as an investment after a decade of bad news.
But five months later, Citigroup’s sale of the EMI Group, one of the three other companies that dominate the world music market, is drawing less confidence. Turmoil in the financial markets has driven away many potential buyers and reduced the number of banks willing to finance bids. And according to several people involved with the auction, bidding prices have been lower than expected.