Buyer Beware?

Bidders for HMV’s MAMA Group will need to take a close look at what they’d get for their money, as ever-growing rumours suggest some key execs are about to jump ship.

The estimated £65 million price tag includes 13 concert venues and a clutch of festivals such as The Next Big Thing, The Great Escape, Lovebox, Global Gathering and High Voltage.

But, with second-stage bids to be filed before the end of the month, online chatter and the London music industry grapevine are questioning the true value of MAMA’s sponsorship business and its major management company.
There are reports that Rory Bett, the founder and managing director of Music & Media Solutions, MAMA’s brand solutions division, has already handed in his resignation. This wasn’t possible to confirm at press time.

For months there have been industry stories that MAMA’s SuperVision Management – with clients including Kaiser Chiefs, White Lies and Franz Ferdinand – would go to U.S.-based Red Light Management, whose huge roster includes Dave Matthews Band, Alicia Keys, Alabama Shakes, Gomez, The Jayhawks, Milow, Phish, Rufus Wainwright, and Gogol Bordello.

Those rumours have dried up and been replaced by new ones that some key execs at SuperVision are about to leave the company, apparently unhappy about it being sold to one of a number of global conglomerates.

Various UK papers have reported that AEG Live, Sony Music, Oakley Capital, the private equity firm behind Time Out magazine, and venue operator Academy Music Group are all eyeing MAMA Group.

Last month, Pollstar reported that German ticket giant CTS Eventim could also be among the bidders. Eventim chief Klaus-Peter Schulenberg declined to comment.

For AMG, it would mean buying back a couple of London venues that the Competition Commission forced it to shed in 2007, such as Hammersmith Apollo and The Forum.

That helped clear the way for Live Nation and Denis Desmond’s Gaiety investments to acquire 56 percent of AMG.

HMV put MAMA on the block in December, softening the blow that the retail chain/360-degree music company had lost close to £36.4 million (then $56.4 million) in the first six months of 2011.

By shifting MAMA, HMV hopes to recoup at least what it paid for it in February 2010 and also cut its estimated £180 million ($ 284.8 million) debt by at least one-third.

AEG Live, AMG and Eventim would likely be more concerned about MAMA’s venues and festivals than its management business, but that may not be the case with Sony and Oakley.

They may be more bothered about the sponsorship and management divisions losing key execs.