A long, very weird story in the NYT about Guy Hands, chief of EMI, whose antics since his firm bought the fabled label have been watched with dismay in the industry. Little in the story makes one optimistic about the label’s future.

I say “weird” because it’s full of both interesting tidbits and discordant notes.

For the latter, after mentioning the Beatles, it describes the label’s artist history thusly: “Frank Sinatra, the Rolling Stones and Marvin Gaye have all called EMI home.” It’s fair to mention Sinatra, who was of course on Capitol, part of EMI; the Stones have been on the label since EMI took over Virgin ten or fifteen years ago, but the few albums the band released under its aegis—winners like Bridges to Babylon—aren’t very memorable. (The story also mentions the Stones’ back catalog, but of course EMI didn’t release it originally, and the Stones aren’t a particularly big catalog seller.) I don’t understand the reference to Marvin Gaye, who I thought spent his career on Motown and Columbia, at least in the U.S. You’d think a story about EMI would mention the artists that actually sold some records for it, like the Beach Boys, Paul McCartney, Pink Floyd and, I don’t know, Garth Brooks?

Anyway, some of the tidbits:

The company now wobbles under a huge debt load, a leadership vacuum—it has no chief executive and most major decisions are made by Mr. Hands—and low morale among many of its employees. Mr. Hands said about 80 percent of the $6.4 billion paid for EMI was for the music publishing unit, which owns copyrights and provides a steady flow of cash.

It is the other side of the business, recorded music, that he says he overpaid for, and could wind up selling if market conditions do not improve.

This I assume increases the likelihood that Warner and EMI will ultimately find their destiny together; indeed, later the story details some complex financial details, concluding that Citigroup, which funded Hands’ takeover, might ultimately force the long-awaited merger with Warner.

The story has even turned comical at times. After Mr. Hands discovered that some employees were laundering costs for things that were illegal (drugs and prostitutes, he said), by itemizing them on expense reports as “fruit and flowers,” he set a strict travel and entertainment policy that required receipts for every expense.

One is tempted to snicker that he was shocked, shocked to discover there was gambling in Casablanca, but this is an interesting aside. Payola is on the outs now in the industry. (The labels can’t really afford it any more.) The story doesn’t say if EMI before Hands bought it was a holdout in this area, whether the, ah, “promotional material” was for radio or retail, or whether the activity took place in the U.S. or the U.K.

Some bleak figures:

[…A]ccording to Mr. Hands, the company was doing worse than commonly thought. An analysis by McKinsey and KPMG found that EMI had lost £750 million ($1.5 billion) from selling new music over the last five years.

“We didn’t believe it at first,” he said, explaining that the figures that EMI previously reported counted sales of re-releases of music from old acts like the Beatles as new music revenue.

“They were doing everything they could to hide the fact that they were losing huge amounts of money in new music,” he said.

All of the major labels are having problems, but amid everything else, EMI’s U.S. market share has dropped nearly 20 percent, the story says. And what would an industry story be without some over-optimistic forecasts?:

[Hand’s company] projected that EMI’s earnings before interest, taxes, depreciation and amortization [Ebitda] would grow from £167 million ($325 million) in 2007 to £580 million ($1.1 billion) in 2010, growth that seems at odds with industry trends. (Merrill Lynch, for example, projects that the Ebitda of Warner Music will decline slightly over that time, from $461 million to $444 million.)