Once completed, the pending acquisition of the Sanctuary Records catalog will catapult BMG Rights Management into one of the industry's top independent catalog labels.

Universal Sells Sanctuary Label to BMG

The Sanctuary catalog has about 170,000 songs, or about 16,000 albums, including recordings by Black Sabbath, the Kinks, Motorhead, Iron Maiden and Uriah Heap, according to a news release.

But exactly which artists BMG will get the rights to in what countries is like a patchwork quilt. For instance, BMG says it has the U.S. rights for Iron Maiden album, which may mean it doesn't have them in Europe. On the other hand, BMG claims Black Sabbath Records, but doesn't specify which territories, even though Warner Bros. Records puts out the early Black Sabbath Records in the U.S. One indie label executive who looked at the Sanctuary catalog says that a lot of the revenue came from sales in Europe.

Regardless of which territories BMG has for which albums, the Sanctuary catalog on top of the Mute catalog -- which includes Nick Cave, Depeche Mode, Erasure, Moby and Goldfrapp records -- puts Sanctuary at the forefront of indie catalog labels, up there with Concord Records, owner of Fantasy and Stax.

Moreover, when BMG first started after Bertelsmann had disengaged from the Sony BMG joint venture begun in 2004 and ended four years later when Sony acquired 100% of the company, it kept about 16,000 recordings, or about 160 albums, by artists like Nena, Kylie Minogue, Scorpions, ZZ Top, Alison Moyet, Shakin' Stevens, the Sweet and Paolo Conte.

So from the beginning, BMG's game plan was always to own catalog assets. Unlike breaking new artists, catalog records and new albums by established artist like Joey Ramone -- of whom BMG put out a posthumous release last year -- have more predictable income streams, just like publishing, the main area of the business that BMG is operating in.

According to sources, BMG has agreed to pay almost 40 million pounds for the Sanctuary catalog and about 7 million pounds for Mute. It also won the auction for the Rosetta Catalog, agreeing to pay about 90 million pounds for the Virgin Records publishing catalog.

But last week, a joint venture bid from BMG and Sony Music Entertainment fell short when they were outbid by the Warner Music Group for the catalog of Parlophone Records. Sources say BMG would have gotten the back catalog, while Sony would have gotten the label’s current roster if their bid was successful. 

All of its pending acquisitions still need to be approved by government regulatory agencies.

Nevertheless, in a statement, BMG CEO Hartwig Masuch said, “We are delighted to have won the opportunity to work with the exceptional line-up of artists in the Sanctuary catalogue. 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.”