Unearthing the new Gray

Music supremo looks to buy publishers, writes Heather Tomlinson
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The Independent Online

ecord industry entrepreneur Steve Lewis, formerly of Chrysalis and Virgin, is setting up a new music publishing venture.

Called Stage Three Music, the company intends to buy up publishing companies and catalogues that have been "under-managed" by their current owners.

It has raised funding from Ingenious Media, the specialist media firm that advised on Robbie Williams' recent £80m deal with EMI.

Ingenious is now a shareholder in Stage Three alongside Mr Lewis. A further round of funding is being raised for the acquisition of several publishing businesses, which require an "eight figure sum".

Mr Lewis was headhunted from university in 1974 by Sir Richard Branson, and ran Virgin's music publishing business in the 1980s. He left to join multimedia group Chrysalis in 1993, where he set up two record labels and signed acts like David Gray, Moloko and Portishead.

But over the past few years record labels such as EMI and Telstar have cut jobs as record sales have fallen. The publishing sides of the companies that look after the back catalogues have fared better.

"I don't think the record label model works any longer. I think the balance of power is moving away from labels and towards publishing," said Mr Lewis. Although funding has not been finalised, Ingenious could back a substantial future acquisition. "If the business was worth around £70m to £80m, I would like to think we would take a run at it," he added.

* Sanctuary Group is in talks to hire Martin Hall, manager of rock groups Manic Street Preachers and The Lightning Seeds. There could be an announcement next week.