Striking gold with heavy metal
Roger Trapp explains how Iron Maiden hit the right note for Sanctuary and, right, looks at a CD success story
Sunday 13 October 1996
But the long-serving stalwarts of a sound noted for its ability to attract fanatical devotees do not just have a big-selling greatest hits package to their name. They also form the bulwark of a company that earlier this month reported a more than 10-fold rise in pre-tax profits to just over pounds 1m on turnover up more than 133 per cent at 12.6m.
The Sanctuary Group, which was formed 20 years ago by two men who met while at Trinity College, Cambridge, attributes the rise in profits to the receipt of its first big contribution from Cloud 9, the television joint venture it has set up with Raymond Thompson, a former BBC executive.
The chief output of the project is a series of programmes based on Enid Blyton's children's adventures that has been sold to cable channels and video suppliers around the world.
However, the music services division, which has been managing Iron Maiden for the past 17 years, also turned in a strong performance. The group has also sought to boost its music productions arm by acquiring two of London's largest recording and rehearsal studios and entering a series of production deals with several key talentsand developing international licensing interests.
Indeed, Andy Taylor, chairman of the group, prides himself on the way Sanctuary has built itself up through the underlying philosophy of managing creative people and building businesses around them. "The problem with most creative people is that very few of them have business skills," he says.
Sanctuary is not the only organisation of this type in a booming music industry that makes Britain the fourth most important market in an international business worth $23bn. But Mr Taylor believes his organisation plays a key role in preventing small businesses in the sector being gobbled up by majors.
The company acts as an "umbrella organisation of management services". All the creative people involved are encouraged to run their own businesses and so keep their autonomy while at the same time having the advantages of fitting into a group infrastructure.
Mr Taylor, who first got into the business when he joined up with Rod Smallwood, co-owner of Sanctuary, soon after they left university, believes it is a positive advantage that he does not have much interest in music. A chartered accountant, he helped fund the fledgling group by working as finance director of a Swedish multinational. "Rod held the fort and I helped him run it at weekends," he explains. Among the acts the pair became involved with early on was Steve Harley and Cockney Rebel, but things took off in 1979, when they discovered Iron Maiden in the east end of London.
Taking on the whole business side of the band quickly became the foundation of the company. In the early 1980s Sanctuary offered full business management services to other groups, including Wasp and Halloween.
Through business management the company moved swiftly into touring and tax advice and set up a special travel company to organise transport to overseas shows, a merchandise licensing division and a booking agency.
It even started an insurance brokerage but it became too big to manage and was sold, adds Mr Taylor. "We tried to create a whole package of professional services, leading to a one-stop shop," he adds, noting that each business is focused on a key individual who will have some kind of stake in the business.
However, by the early years of this decade Mr Taylor and his colleagues had decided to move in the direction of creating intellectual property rights besides carrying out management duties. Hence the television deal and the latest addition to the stable, a books arm concentrating on specialist serious titles.
All this activity has helped swell the staff numbers to more than 300. What brings them to the company's unprepossessing offices near Paddington station in London is the combination of freedom and professional back- up, claims Mr Taylor. "We offer them a small company with big-company backing. It's a much more conducive type of atmosphere." However, as a former finance director he stresses that this is not a totally lackadaisical set-up. Though the company shows its respect for creative folk by giving them freedom to pursue projects, they are still subject to controls.
Moreover, Mr Taylor realised that the company could not head off in a new direction without fresh capital. Consequently, in December 1994 Ivory & Sime Baronsmead, a venture capital organisation, took a 17.5 per cent stake in return for pounds 1.65m.
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