How long til Sanctuary goes out of business?

My inside mole told me they were two hundred million in the hole.  In the limo I forgot to ask him whether he meant dollars or pounds, but in either event, that’s a lot of debt.  Especially when you’ve got little guaranteed income.

Oh, they’ve got a catalog of sorts.  But catalog sales have taken a dive.  And it’s not like they’ve got Led Zeppelin.

Oh, LED ZEPPELIN?  Did you know that Robert Plant has a new CD available on Sanctuary?

Probably.

But, have you heard it? Other than e-mail from Sanctuary’s tireless Michael Plen, I’ve read essentially NOTHING about this album, I haven’t heard it on the radio, it’s like it never came out!  And this ain’t Christopher Cross.  Hell, even MICHAEL MCDONALD got more hype, never mind airplay, for his last two solo albums.

But why is Mr. Plant on Sanctuary anyway?

The bucks.

That’s what Sanctuary does.  Give you a big payday.  An irresistible one to old has-beens and those no longer wanted by the major labels at a high price.  As far as execution??  For all the hoopla about Morrissey’s new record, it ultimately stalled in the marketplace.  And, other than the Manchester sexual neuter, nothing else has had an impact on Sanctuary.  Hell, it was like the Kelly Osbourne record never was released.  And, if you LISTENED to it, you’d see it was a workable record, it didn’t even SOUND like her, if she had still been on Epic you’d be being bombarded by it on paid-for Top Forty stations as we speak.

But Sanctuary doesn’t spend that kind of money.  Not in promotion/marketing anyway.

They do pay that kind of money in advances.  And salaries to managers who see it as the sweetest deal of all time.  A guaranteed income??  Unless you’re an Azoff or a Burnstein, the concept of getting a constant stream of money to manage acts is a deal you can’t refuse, even if you have to give up a few cents on the dollar.

BUT, the company paying you this salary must have the cash…

It’s like a bucket brigade.  Acts go on tour, the money goes to salaries, the debt gets higher, when does the cash run out?

And what’s the end game?

It can no longer be a stock market play.  The company’s stock has tanked.  And who are you going to sell the company to?  Warner Music is laden in debt and its numbers are bad.  Other than Universal, EVERYBODY’S numbers are far from rosy.  And Universal doesn’t NEED Sanctuary, they already have economies of scale and enough market share to wield a big stick.

So, Sanctuary’s gonna implode.

At least Clear Channel had some assets.  Those sheds.  And to break into the concert business is nigh near impossible whereas to start up a record company/management company…ANYBODY can do this.  The only thing that separates the strapped newbie from the major is the deep pockets to market.  But, if Sanctuary had this money to spend, you’d know that Robert Plant is NOW selling a live EP.  I’m a FAN and I had NO CLUE!

Is this any way to run a company?

No.

Which is why I believe this company is not going to run for very much longer, not in any fashion resembling its present incarnation.

Make no mistake.  There’s a ton of talent at Sanctuary.  Everyone from financial whiz Andy Taylor at the top to John Kalodner and Peter Asher in the trenches.  It’s just that it was a flawed plan.  Smoke and mirrors have kept Sanctuary alive this long, but they’ll pull the plug or sell it off at a deep discount in the future.  Hell, companies go bankrupt every day.  It’s business.  The way of the world.

P.S. Sanctuary’s debt, as of the company’s last report, is $215 million (118 million pounds).