Executives from Russian arms Warner Music, home to artists including Ed Sheeran and Dua Lipa, and French label Believe have continued to try to broker deals despite the business being suspended following the invasion of Ukraine, the Guardian has learned.
$15bn (£13bn) publicly listed Warner Music – which is owned by Sir Leonard Blavatnik, the Ukrainian-born billionaire with US and UK citizenship – owns ADA Russia, which works with local independent labels and artists such as Zemfira and Gorky Park. ADA’s wider operation lists artists including YouTuber and rapper KSI as clients.
A marketing email sent by a senior executive at ADA Russia, which is located inside Warner Music’s offices and whose staff has Warner Music email addresses, attempted to generate business with local labels almost a month after its parent company announced a suspension of all operations in Russia in March.
The email, sent in April and seen by the Guardian, sought to discuss “potential cooperation”, offering premium prices for a range of music services and citing a string of Russian artists the company already represents.
“I would like to note that our streaming rates are much higher, we can also do vinyl releases, and we offer advanced analytics,” the executive said in an email. “Everything is ready and we would like to demonstrate it with examples. We would like to meet with you and personally discuss all the possibilities and our possible cooperation.”
The division, which calls itself the distribution department of Warner Music Russia, does not work with famous international artists signed to the world’s third largest record company.
The email directly contradicted Warner Music Group’s March 10 announcement that it was “suspending operations in Russia, including investment and project development, promotional and marketing activities, and production of all physical products” following the February invasion of Ukraine.
A spokesman for Warner Music Group confirmed the executive should not have conducted business in Russia and said an investigation had been launched.
“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 are investigating what happened and have also reiterated our suspension rules for our local team.”
Despite the breach by the music executive, the Russian business is not thought to be operating in violation of Warner Music’s rules on a daily basis.
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 by including payments to a local streaming service that until recently was owned by the lender. of the country, Sberbank. which is on the UK, EU and US sanctions lists.
After the invasion of Ukraine, Believe, one of France’s biggest technology businesses, which is valued at more than €800m (£702m) on the Paris Stock Exchange, advised Russian partners on how to continue working around the sanctions, also saying that it remained complete. compliance with international sanctions.
After a Guardian investigation, the company said it had stopped hiring and new investment in Russia and suspended activities including releasing music from independent artists who use its services, as well as cutting ties with local labels and artists it works with. directly under international sanctions.
However, it turned out that Denis Gorshkov, the managing director of the operation of Believe Russia, is still trying to sign agreements with artists and for new catalogs.
An email, seen by the Guardian, includes a follow-up to a €3 million “new offer” with a Russian label to “monetize new releases and back catalogue”.
The company said this does not break its promise made in March, as it is a new deal with an existing partner, not a new investment in Russia.
“Believe is committed to peace and has made the choice to continue operating with its local clients, artists and partners in the Russian market in accordance with all applicable laws and regulations,” a Believe spokesperson said. “Besoj is maintaining all of its operations in Russia in order to support artists, labels and protect the safety of its people, as well as to ensure access to music production and distribution. Believe’s mission always remains to protect its creation, artists, music and people around the world, and to support teams and people.”
Believe – which was founded in 2005, launched in the UK in 2010 and floated on Euronext last year – has also continued to hire staff for roles including label manager and creative producer.
A spokesman for Believe said the new hires will replace natural staff turnover and do not represent an expansion of its Russian operation.
A financial report of a Russian artist’s activity with Believe, seen by the Guardian, also shows that he does business with local broadcasting service SberZvuk, which until recently was owned by state-controlled Sberbank.
In May, Sberbank, which bought the streaming service in 2020 to create a competitor to Apple Music, Spotify and local rival Yandex, sold its stake as part of a broader investment of positions in post-invasion Russian technology companies.
A month later, the UK also added the streaming service’s new owner, JSC New Opportunities, to its list of sanctioned businesses stating that the deal with Sberbank meant it was “involved in receiving a benefit from or supporting of the government of Russia conducting business in a sector of strategic importance, namely the Russian sector of information, communication and digital technologies”.
JSC New Opportunities, the new owner of Zvuk, is not sanctioned by the EU.
“Believe confirms that its assessment concluded that Zvuk has never been subject to EU sanctions, nor to US sanctions related to Believe’s activities,” the company said. “If Zvuk is under EU and/or US sanctions at any time, Believe will immediately remove its entire catalog from this platform and terminate any partnership.”
The company owns brands including New York-based music distribution platform TuneCore and in 2018 bought a controlling stake in Germany’s Nuclear Blast, one of the biggest labels in rock and metal music that is home to acts including Slayer , Sepultura and Machinehead.
Other music labels listed on Believe’s brands page include: Allpoints France, which has worked with Björk; Records AFM, which lists Anvil and Lord; and Naive, home to French acts M83 and Youssou N’Dour.
