HMV sells MAMA Group
By CMU Editorial | Published on Monday 3 December 2012
The MAMA Group has new owners after a £7.3 million deal backed by Lloyds Development Capital.
The live music and management company became a division of HMV in 2010 as part of the flagging retailer’s then strategy of diversifying its brand away from high street retail. However, as the wider HMV Group began to run into financial problems, that strategy ran aground, and the retailer never seemed to capitalise on its new interests in the artist management and live sectors. Instead, in late 2011 the retail firm let it be known it had begun a ‘strategic review’ of its live division, which basically meant it was planning a sale.
MAMA’s biggest single asset, the Hammersmith Apollo, was sold to a joint venture between AEG and Eventim in May. Since then it’s seemed most likely that the rest of the business – incorporating a network of smaller venues, a number of festivals, the Mean Fiddler tour promotion business and some other music and media assets – would be bought by a consortium led by MAMA’s existing CEO Dean James.
He confirmed that LDC was his backer this morning, shortly after HMV confirmed it had sold most of the rest of its live division to an LDC-owned company called Juno Newco Ltd (MAMA’s interests in the GAY and Heaven ventures will be sold off separately). Saying he was pleased that his company had finally “untangled” itself from HMV, James pledged to initiate a new period of growth at the firm, particularly beyond the UK, and to rebuild the MAMA artist management division, which was wound down earlier this year when the managers affiliated to the company departed as a result of the insecurity created by HMV’s “strategic review”.
James told CMU: “To say I am pleased that MAMA has been able to partner with LDC seems inadequate. MAMA has for some time been one of the leading live music companies in the UK and with LDC we will develop our venue and festival business to consolidate our position in this market, and will look to expand into Asia and America. We will build on our recent additions to the promotions team and will also re-establish MAMA’s artist services business – MAMA’s distribution assets, The Fly, venue estate, festivals and our tech platform, make it the perfect partner for any artist wishing to build and engage with its fanbase”.
He added: “Over the past three years we have been able to open venues as well loved as The Ritz in Manchester, create festivals as wonderful as Wilderness with our partners Secret Garden Party, establish The Fly as the number one music magazine in the UK and make our brand partnership business one of the best in the market. With LDC’s help and support we will build on all these existing achievements to establish MAMA as the best live music business in the world. Untangling ourselves from HMV has been a long and difficult process but one that has been handled with extraordinary grace and patience by all involved. I would like to thank Simon Fox and all at HMV, Tim Farazmand, Alistair Pendleton and Richard Barley from LDC for their skill in negotiating this deal and last but not least the extraordinary management team, employees and business partners of MAMA for their loyalty and support over the past eighteen months, this would not have happened without you”.
Confirming his backing for MAMA, LDC’s Investment Director Alistair Pendleton told CMU: “Live music is a growing and increasingly important sector of the UK economy and in supporting the MBO of MAMA Group we believe we are backing the best management team and the most recognised, successful brand in the business. MAMA Group is renowned for its iconic venues, where some of the world’s most successful music artists have performed, and hugely popular music festivals, both in the UK and overseas, which have attracted strong followings and showcased some excellent new artists. Management have an exciting buy-and-build strategy and LDC has the resources, skills and track record to help them accelerate their plans and develop the Group into a globally-recognised business and brand”.
James’s bid to re-expand the MAMA business has already begun, of course, with the announcement in October that the group had taken a stake in the All Tomorrow’s Parties company, while last month it was confirmed MAMA was involved in the relaunch of Liverpool’s The Masque venue.
The end of HMV Live means the struggling entertainment retailer’s future is now pretty much exclusively based around the HMV store network and mail-order website (and a stake in 7digital). While HMV management remain confident that the sale of gadgets in its high street stores can ensure a long-term future for the company as CD, DVD and physical game sales decline to nothing, the general doom and gloom that hangs over high street retail at large makes many commentators less optimistic now the ‘expand-the-brand’ experiment is over.