With record major EMI being merged into fellow labels Sony and Universal, the ‘Big Four’ of the music industry has been reduced to (along with Warner Music Group) the ‘Big Three’ in the last year, which has seen significant moving and shaking in the industry.
The latest of which comes from BMG (Bertelsmann Music Group, the music division of Germany’s Bertelsmann AG), which has made a loud comeback into the record label business by purchasing Sanctuary Records Label from record giant Universal Records (UMG) at a price of $62.5 million, effectively making them a big name indie label in one fell swoop.
Sanctuary Records is home to big names including Black Sabbath and Iron Maiden, and was the largest independent record label in the UK until 2007 when it came to an agreement with Universal Records, and was sold for $44.5 million.
After years of being under Universal Records’ wing, Sanctuary was put up for sale due to regulatory issues, occurring after an acquisition with EMI in September 2012 for $1.9 million.
As Yahoo News reports, the deal with BMG, currently a music rights management company, will also see a transfer of a catalogue containing more than 170,000 recordings, including memorable numbers such as The Kinks’ iconic songs ‘You Really Got Me’ and ‘Waterloo Sunset’ and Motorhead albums Ace of Spades, No Sleep ’til Hammersmith and Overkill.
The Chief Executive of BMG Hartwig Masuch commented, “we have made no secret of our ambition to create a new force in the music industry focused on delivering service and revenue to artists. We believe this deal will be good news for those artists, good news for our partners, particularly in the independent sector, and good news for the music industry as a whole.”
BMG purchased Sanctuary Records Label from record giant Universal Records at a price of $62 million.BMG’s re-entry into the major label scene marks its return from being a minor player after many years. As music blogger Alan Cross comments, it was a major player once upon a time, until “an ill-advised merger with Sony in 2004 that was torn asunder in 2008,” pointing out that BMG is “the only label to go from being a major to an indie.”
Late last year BMG also agreed to purchase Mute Records – who’s catalogue includes the likes of Nick Cave, Depeche Mode, and Moby – from Universal Records, as a part of UMG’s program to offload labels, following concerns by the European Commission that Universal could become too powerful with the purchase of EMI.
BMG’s $60 million purchase of Sanctuary, along with its December purchase of Mute, are still subject to approval from the European Commission.
It’s the same reason that earlier this month Universal sold another of their labels, Parlophone, to Warner in a $744 million deal.
The Parlophone Label Group is comprised of some of music’s most enviable acts under its three banners, with a catalogue containing the likes of Coldplay, Radiohead, Pink Floyd, Gorillaz, Deep Purple, Iron Maiden, and Kylie Minogue
The Parlophone/Warner Music transaction is still open to examination from regulators at the EU Commission, but representatives from indie labels have already given the move their blessing, saying that it balances out the power of the record label majors.
“We would expect to see a significant re-balancing effect as a result of this [deal],” said Impala’s Executive Chair Helen Smith, who represent indie record labels internationally. Adding that, “After all, ‘two’s company, three’s a crowd’.”
