Sources close to the proposed Universal Music purchase of the London based Sanctuary Group have told Billboard that the major record company plans to "embrace" the independent firm's diverse range of music business interests, and not sell off those divisions outside the recording and publishing sectors in which Universal already operates. As reported Friday, Universal's proposed takeover of the struggling cross-sector music company received Sanctuary board approval last week, and the major will now attempt to take control of the company through its 20 pence per share offer.
Although Sanctuary own a valuable music catalogue, the Group's merchandising, management and booking agency businesses account for a large part of their overall operations - with management firms Trinifold and Twenty First Artists, merchandising enterprise Bravado and booking agents Helter Skelter all important parts of the Group. Although those are areas where Universal does not currently operate, insiders say the diverse range of interests at Sanctuary made the prospect of a takeover more attractive to them, because some senior Universal execs believe the cross-sector approach employed by Sanctuary is still a good strategy, despite the financial problems it caused the group.
Billboard quote one source as saying that Universal chiefs believe Sanctuary's problems have been down to an "appalling execution" of the so called 360 degree approach, and not because that approach was in itself a bad strategy. They quote the source as saying: "Clearly there's a great record catalogue but that's not really the reason why Universal is doing this. There are three business areas that Sanctuary is strong in: merchandising, the agency business and artist management. With the right execution and the right support, this will work well alongside [Universal's] other businesses".
Billboard also reports that Universal plan to leave Sanctuary as an autonomous entity for the time being, to be run by current CEO Frank Presland, although some expect Sanctuary's record labels and publishing company to be eventually incorporated into Universal's existing recorded music and publishing divisions, with the Sanctuary division concentrating on those other areas of business.
Sanctuary, of course, had been looking into selling off some of its assets at the same time as entertaining takeover offers. It's not clear if any of the planned divestitures will now be put on hold, although it is thought that the sale of Sacntuary's 49% stake in Rough Trade will still go ahead as planned. As previously reported, both the Beggars Group and Rough Trade founder Geoff Travis are said to be interested in acquiring that stake.