Here Today... Gone To Hell!

Friday, June 17, 2005

LONDON (Reuters) - Music group Sanctuary (SGP.L: Quote, Profile, Research) warned on Friday of a sharp drop in first-half profits, fuelling speculation it may be forced to sell all or part of the company to a larger rival such as EMI (EMI.L: Quote, Profile, Research) or Warner Music (WMG.N: Quote, Profile, Research).

The company, whose artists include the Strokes and former Guns 'n' Roses front man Axl Rose, said first-half earnings before interest, tax, depreciation and amortisation (EBITDA) were expected to fall by 40 percent, hit by delayed releases and unexpected overseas expansion costs.

Delayed releases = (subtle sign for) Chinese Democracy.    ;D.

"former gnr frontman axl rose"....   i think this is only based on ignorance.....

anyway,  maybe sanctuarys bad situation  will shorten our wait for CD

Geffen was "banking" on a new GNR album in the late 90's. Look where it got them. Apparently Sanctuary hasn't learned from past mistakes of putting your money on Axl Rose. My prediction: Sanctuary declares bankruptcy before we ever see CD. Remember that. Write it down. You heard it here first.

Now, now, no article says whether CD is one of Sanctuary's delayed releases or Sanctuary is banking on GN'R.

So isn't it a capital chance if you want to dabble in the Sanctuary stock?  :hihi:

Given the fact that they spent $20m on the publishing rights and there's no release in sight I would say that GNR must play a part into the 40% drop. After all, the last rumoured release date was April, maybe Sanctuary had budgeted around this.

I sometimes wander whether Merck's special 'relationship' with Axl has clouded his judgement.

actually it's a pretty accurate comment.
thats the best way to introduce the mass audience to the NEW gnr.
i'd rather have the medias say that than " this is guns n roses" and have people freak out when they dont find slash ...

Such people should have known it already.  ;)

nah we're the only one :)

Huh, looks like Sanctuary shouldn't have given Axl ?10 million to complete the work on the album

If they are facing a possible sale on the company, they just might force Axl out with the album.  They are going to check all of their possiblities before they sell, that's IF it's the entire company.   They could just sell part of the company and still be ok without forcing Axl out.  Also, news articles tend to speculate on the fate of compainies that are having financial trouble.  Sanctuary may not be as in bad of shape as this article is making it out to be.   I work for Cablevision in  NYC, they are in the business section all the time with writers speculating on the fate of the co., it's always that Cablevision is going to sell it's tv networks off and I am still here.   You have be careful when you read these things, not always 100% factual.

True.
However it appears that these things tend to get frills and embellishments.

Ha?   ???
So why you worry?
I'm saying those who care that much about where Slash is would know whatever became of Slash.

Does anyone know whether they have been actively looking for buyers or have they been approached or is someone buying up shares like Malcom Glazier and Man United?

I would like to know how when assessing the value of these publishing rights how much was factored in for the publishing rights of future music.

If the court case doesn't turn out so well in Nov, Sanctuary could find themselves banking even more on Chinese Democracy. Pressure's on Merck!

I have a friend whose is in artist managment and he does some dealings with Sanctuary.  I know how the whole friend thing goes on forums and there is no way for me to prove what he says but for shits and gigglies and I am going to email him and ask him what he knows.  Can't hurt.

may the lord b with us

this board has a problem with believing the entire world revolves around guns n' roses.

Doesn't it? :nervous: :confused:

 :rofl: :rofl: :rofl:

People, this is BAD news. Over the past year we've had two notable things happen. First, we had that NYT article that basically said this whole thing is a fucking joke. Now this. A companty that has a 40% drop doesn't stay around very long. I have a question: Could Geffen/Interscope release CD without any involvement from Sanctuary? Or do they have to get Sanctuary's permission since they supposedly own rights to the songs?

I thought it was just the rights to publishing the songs, in a book like. You know, Guitar tabs and lyrics in the album sleeve, shit like that. Am I wrong?

Top manegement don't get clouded by special relations, they would never get to be CO of a company if they did.
The record cd belongs to Geffen, Intercope or who ever owns them. Publishing rights on a new album is a long term investment, they will be better of with the old portofolio of GNR than an eventual new album.
the last 2/3 years have been pretty bad for the companies in the music industry and Sanctuary, that started to be just a manegment company spreed their interests, it's not a big deal a downsizing revenue (even a big one) if you compensate with other assets, investments in other markets, geograficaly and diversification of services. If The market value of the assets of santuary droped 40% in a year that would be very worring for them, i'm sure they would be taken over, and even that would only have repercussions on GNR if they let it.
Sanctuary till further notice is not their label.

I think everyone in Sanctuary are getting their ducks in a row for a sale.  And to show their worth, they have the mythical Chinese Democracy Album.  Axl is Sanctuarys Trump card.  This sale can only further the eventual albums release. : ok:

Sanctuary only owns the publishing rights to Axl's portion of GNR songs past and present.  Geffen/Interscope is GNR's record label, so I doubt Sanctuary being sold will force CD any sooner.

February, normally you are right, but in this case you are wrong. 

I interviewed with Sanctuary Record Group for an internship and I brought up Mr. Mercuriadis.  The position I was offered was in the finance department, but I mentioned how I would love to work with Merck if the opportunity was there.  The two people interviewing me looked at each other started laughing and said simply "Merck (yes they called him Merck) is an interesting guy".  I smiled asked what they meant.  They explained to me that Merck is more on the 'creative' side of things and always sides with the artists.  He gets mad at us (the finance people) because all we see is the bottom line and we do not care about artistic integrity.  Since I was not offered a position in the NY office I declined the internship and took another one.

That is just my little interaction with people at Sanctuary and what I was told about Merck.

MONEY SUCKS MAN...  :nervous:

It's worth noting that the 40% drop in profits is just for the first half of the year and seems to be mainly due to expansion costs which drag down the profitability of even the most successful company.  Remember that amazon.com didn't make a dime of profit for their first 8 years in operation.

This article is pure speculation but it take on more credability if the bottom line doesn't begin to improve.

I care to disagree with you about 'Top Management'. Many of them have a great deal of affinity to products, people or projects and whilst their opinions aren't necessarily correct, they are very good at convincing others of their position. And it can be very difficult to admit defeat and cut your losses with projects if you have invested a lot of time and money.

Agreed.  Kitano

A reminder:

1) Sanctuary group's got many labels and lots of artists other than GN'R as its clients to which Sir Elton john joined this April.   

2) They say that Sanctuary publishing was of Axl's choice. 

The notoriously unpredictable Axl Rose signed with Sanctuary after months of negotiations through his lawyers. Although rival publishers are believed to have offered more, Rose felt more comfortable with Sanctuary's business plan.


Sorry. 2NaFish.....I'm not worshy. :'(

Heaven knows Sanctuary is miserable now
Louise Armitstead and Mark Kleinman
 
 
 
HAVING established a haven for rock artists, Sanctuary Music Group, one of Britain?s best-known and hitherto most successful music companies, will this week mount a fight to restore its financial health.
The company, whose clients include Elton John, Guns ?n? Roses and Beyonc?, is tomorrow holding a board meeting to discuss options, including an emergency rights issue and an acceleration of efforts to find an external investor or buyer.

 
 
The heat is on because the City believes Sanctuary is struggling to avoid breaching its banking covenants.

Conor O?Shea, media analyst at Teather & Greenwood, said last week: ?We estimate that unless conditions materially improve, the group risks breaching two of its main four banking covenants.?

Sanctuary?s founders, old university chums Andy Taylor and Rod Smallwood, are more used to being stock-market darlings than ugly ducklings.

The company, founded in 1976, took its sales to just ?13m by the end of 1998. Since then its turnover has soared, hitting ?220m in the year to the end of 2004.

But nine days ago its share price crashed following a profit warning, its second this year. Two weeks earlier the company had claimed it was in talks that could lead to a takeover offer, thought to be from either a competitor such as Warner Music Group or a private- equity firm.

After the profit warning on June 17, Sanctuary?s shares fell 30% from 43p to 29?p. On Friday they closed at 20?p amid fears that the group will struggle to restabilise its bruised balance sheet.

On Tuesday, when Sanctuary releases its interim results, the company is expected to say that discussions with potential suitors are ongoing but that no firm offer has been received.

Executive chairman Taylor will say the board has already identified areas in which it can slash millions of pounds from the company's cost base. A sale of the firm?s book-publishing division is one option under consideration.

But analysts and investors are sceptical. O?Shea said: ?I cannot see the business surviving in its current form. What is really surprising is that things have deteriorated at a time when the music industry is showing steady signs of improvement.?

Investor confidence in Sanctuary has been steadily waning for months. The company?s unique structure ? it is not just a traditional record label but also manages artists, acts as a promoter and handles merchandise sales ? has attracted clients but has also created a complex financial structure.

The company?s rapid growth has been fuelled by an aggressive acquisition policy in which Sanctuary has snapped up clients, including ?16m spent on Elton John?s management company in April. The series of purchases has been funded using ?30m of debt it tapped from Highbridge, a specialist house.

The head of equities at one of the City?s biggest institutions said: ?Sanctuary is simply not of investable quality.?

And the firm could face a fresh headache if negotiations with Morrissey, one of its biggest clients, lead to him leaving the group?s record label. Sanctuary declined to comment.
 
http://www.timesonline.co.uk/article/0,,2095-1669191,00.html
 
 

I wonder if the name of the album has changed? Maybe Chinese Democracy was a working title? I remember one of Sanctuary's press releases mentioned a "forthcoming" GNR album. But no mention of the words Chinese Democracy. Kinda strange. Maybe I'm just reading between the lines too much. But I find it odd that they wouldn't mention CD.

Title is misleading.

This is not good news.? BTW, their stock is in free fall, they are in debt 150 million, and are now discussing selling off assets to stay afloat.? Word inside the industry is that artists are getting a little worried and may flee, further complicating the situation.?Who knows if that (artists getting shifty regarding Sanctuary mgt) is true, but saw it mentioned during some discussions earlier today Moreover, there stock is depreciating at an alarming rate.  The bright side is they have enriched their catalog(albeit far too rapidly, part of the current financial problem) tremendously, and if they can trim some debt they have the potential to quickly experience ROI.

http://www.guardian.co.uk/business/story/0,3604,1516831,00.html

News like this stinks, and is only compounded by the negative impact on peoples lives, artists losing deals, people losing jobs, and records failing to have the marketing they deserve.? It's also very sad to see such a pro-artist organization like Sanctuary have problems.  To put it mildly, I would imagine many are on egg shells at the executive level.? If any bandmembers are still receiving checks from Sanctuary, I would imagine that is one of the first areas that the accountants will target to trim costs.? If it ain't creating profit immediately, or it's activities are not producing profit--cease the funding until it can and will create profit.?

In the above referenced article, it speaks about albums being delayed.  I would hope that they have some secured lines of credit, as financial problems could cripple future marketing of tours and artists.  I really don't know if Chinese Democracy will be marketed by Interscope or Sanctuary, but I would imagine the financial problems at Sanctuary do not bode well for a third or fourth quarter release. 

IMHO, Axl might of missed a great opportunity to release the album shortly after RIR III.  Moreover, with the air almost fully out of Velvet Revolvers proverbial tires (the new song Come on Come In could be the most pathetic song in years), Westerburg continuing to court Stinson, Axl further backed into a corner,  the rumors of 15-25 rockers in the vaults,  plus the 12 songs Duff, Izzy, and Slash wrote two years ago with Axl in mind I would expect that the chances for a reunion are increasing by the hour.

I don't believe the catalog of new songs was in any shape for release after RIR 3. Personally, considering the long delays, I don't believe there were many songs in a final stage of completion in 2001. The same could be said for 2002 as well.......something about those vocals.......

That sounds like the way to go...  It would allow them to maintain their position as the "pro-artist organization" whilst trimming down a bit.  I didn't even know (or care!) that they had a book publishing division.