Sanctuary: The Warnock Perspective

Days before the completion of Universal’s purchase of the U.K.’s Sanctuary Music Group, top agent Neil Warnock told Pollstar that the live music business needs to take care of the way it looks after the fans.

"We have to make sure we don’t abuse our customer base in the way that the record companies have," he explained, as Universal claimed it had gone past what one company insider – who preferred not to be named – described as "the psychological barrier" of gaining acceptance from marginally more than 50 percent of Sanctuary’s shareholders.

The board of Centenary, the Universal-owned investment vehicle that’s made the £44.5 million (20 pence cash per share) offer, has said it will leave it on the table until 3p.m. August 2.

A day earlier, if EMI shareholders accept Terra Firma’s 265 pence per share offer, then the U.K.’s largest music company and what was once its largest independent music company will change hands within a little more than 24 hours of each other.

"If this goes through it’s an interesting time for the recorded and live music businesses," is Warnock’s somewhat understated take on the Sanctuary deal.

He believes looking after the ticket-buying public needs to be a key part of the existing live music business firms’ strategy for hanging on to their share of the market when the record companies try to muscle in.

"It will be interesting to see where it progresses over the next few months," the Agency Group chief added, having seemingly had his own bid to buy Helter Skelter – Sanctuary’s London-based international booking agency – scuppered by Universal’s move on the parent company.

Warnock, who has never commented on his offer for the agency, isn’t saying if he still has designs on it.

Nobody at Universal’s London office or at Finsbury Ltd., its financial public relations advisers, would say if the world’s largest music company has any specific plan for Helter Skelter.

If it doesn’t offload it quickly, despite having potential purchasers that may still include Warnock, then it will soon be interpreted as a clear indication that the recording and publishing giant sees it as a foot in the live music industry door.

The live business has been aware of the potential threat of the major record companies squatting in its market even before EMI struck an apparently all-encompassing deal for a slice of Robbie Williams’ earnings, but that threat is rapidly becoming more of a reality.

Apart from Warnock keeping a cautious eye on the situation, and his comment on how record companies treat their customers, it’s a situation that led London-based AEG senior vice president Rob Hallett to give Music Week a colourfully worded view of how he intends to retaliate if he feels record companies or others are impinging on his business.

The U.K.’s Financial Times picked up the subject in a July 19 editorial detailing how the CD market has declined by 24 percent since 1999 and quoted Phil Hardy, editor of Music & Copyright, saying the live music business has grown by the same percentage in the same period.

Apart from Sanctuary’s music and publishing interests, Universal will also get its extensive management and merchandising divisions.

"In a spin, the music business wants artists to give their all," said the FT headline that led into its explanation of how the majors need to become the 180 degree business model that Sanctuary – now ironically – once described itself as.

"I think there are quite a lot of people who we deal with around the world who don’t even know or care that we’re owned by Sanctuary," was Paul Bolton of Helter Skelter’s dismissive reaction to questions about how people may react to the fact the agency will be owned by a company that has at least 26 percent of the global recording market.

Neither Bolton nor fellow senior agents Pete Nash, Paul Franklin, Nigel Hassler and Adam Saunders have commented on the Universal takeover beyond issuing Pollstar the occasional carefully worded statement saying they’d prefer to hang fire and see what happens.

They’re obviously aware of Warnock’s earlier interest, another matter on which they’ve declined to comment, and also that – according to a Sanctuary spokesperson at Brunswick PR – it was turned down because it didn’t match the board’s valuation of the company.

Although Helter Skelter doesn’t generate anywhere near enough revenue to be considered a cash cow, it certainly doesn’t hemorrhage money the way that the recently hived-off Rough Trade and Air Edel did – the deals to sell them barely pulled in £1.25 million between them.

The Helter Skelter agents have an average of about two years left on their Sanctuary contracts.

In that time they can consider if they’ll do better by branching out alone – as former colleagues Ian Huffam, Jeff Craft and Steve Strange did when forming X-Ray Touring – or wait to see if Universal is prepared to make them a handsome offer to stay on for a further term.