As opposition to the $775 million acquisition of Downtown Music Holdings by Virgin Music Group intensifies, Downtown CEO Pieter van Rijn states that the controversial deal has garnered more attention due to the buyer’s owner, Universal Music Group (UMG), rather than the advantages musicians would gain from the merger.

In an open letter obtained by Billboard, which surfaced as the European Commission investigates the acquisition’s potential impact on competition, van Rijn criticized what he termed “misinformation” aimed at “undermin[ing] our longstanding and trusted client relationships….It’s disappointing to see how quickly some parts of our industry closed the door to rooms we — and others — helped build.” He emphasized that discussions about the acquisition, announced on Dec. 16, and its effects on the independent music community “must be honest. It must be about facts, not agendas.”

While van Rijn referred to the acquisition as a “merger” of Downtown and Virgin, a label services provider owned by UMG, European regulators are more concerned about the transaction’s potential to harm competition for artist and label services. In July, European regulators initiated a four-month investigation into the acquisition following a standard preliminary review, due to UMG being the largest record label/publisher by both annual revenue and market capitalization, and Downtown owning various companies that enable independent recording artists and songwriters to generate revenue in today’s digital-focused market, including distributors FUGA and CD Baby, publishing administrator Songtrust, and rights management company AdRev.  

Opposition quickly arose after Virgin and Downtown announced the acquisition. The day after the announcement, independent music groups IMPALA, Association of Independent Music (AIM), and IMPF, a global trade body for independent music publishers, expressed their opposition. IMPALA executive chair Helen Smith labeled the transaction “another land grab” and urged European competition authorities “to set the standard internationally” by blocking the deal.

However, van Rijn has portrayed the company’s acquisition by Virgin as an opportunity to better serve independent artists who require a range of services to compete in the modern global music business. He described Virgin as “a business that aligned with our own, not only in its philosophy but also in the complementary services that we offered.” Van Rijn noted that Downtown had been approached by other interested parties but stated that Virgin’s interest represented the first time Downtown encountered a potential partner “who wanted to invest in Downtown, our team, and our clients.” 

Van Rijn referenced independent music groups that “chose to overlook the clear benefits for their members” that the acquisition offers without naming names. He stated that independent artists need partners “to open doors and unlock the potential of their music.” He further asserted that these artists would benefit more from a combined Downtown-Virgin entity that could provide “more resources, greater support, more innovative technology, all while not only maintaining but actually building on the great service levels, platforms, and flexibility of our current offering.” 

Van Rijn’s open letter followed a similar statement from Virgin co-CEOs JT Meyers and Nat Pastor in July explaining the motivation behind the acquisition (to merge both companies’ “unique capabilities” to create “an even more robust and flexible suite of services”) while addressing concerns regarding independent artists and labels’ sensitive data being handled by a UMG-owned company. They stated: “Virgin already handles — with the care and confidentiality they deserve — the sensitive client data of hundreds of partners. Betraying the trust our clients have bestowed on us would be self-destructive: they would quickly, and quite rightly, end the relationship.” 

In his letter, Van Rijn acknowledged artists’ concerns about data protection and security as “natural” but insisted that “Virgin, like Downtown, operates in a culture built on trust. Therefore, our clients can expect the same, if not expanded, industry-leading data protection and security they are used to now.”