Robert Fripp's Diary

Thursday 15 November 2007

Bredonborough One of the pillars

10.45

Bredonborough.

One of the pillars of The Ethical Company is straightforwardness

Recognisable features of the ethical company involve these attributes:

transparency,

straightforwardness,

accountability,

owning-up,

honesty,

fairness,

common decency,

distributive justice.

transparency + straightforwardness = honesty

accountability + owning-up = responsibility

distributive justice + fairness = equity

common decency = goodwill

The Four Pillars of The Ethical Company

Honesty

Responsibility

Equity

Goodwill

That is, with straightforwardness, you know where you stand (eg David Niven on Errol Flynn: You knew where you stood with Errol - he’d let you down). Good, then, to know where you stand with the Universal Music Group t/a Sanctuary.

To recap recent comments in this Diary…

September 18, 2007: Our Sanctuary contract was negotiated personally by David & myself in 2002, including midnight calls to (supposedly artist-friendly) Sanctuary lawyers during our (very) Late Shifts. We inserted two clauses in the contract, providing for a reversion of KC in the eventuality of Sanctuary being taken-over by a major. Now Sanctuary has been acquired by Universal, the current-version-of Sanctuary’s legal-departments dispute the reversion.

KC signed the Sanctuary deal with the then-Main Man Mr. Merck. We were concerned that Mr. Merck might leave Sanctuary (at the time, wildly unlikely) and/or that Sanctuary be taken over by a major, with all the artist- & music-friendly values associated with a corporate behemoth; both these eventualities have now taken place. The relevant term in the contract was re-organisation.

Following our recent correspondence with a representative party at Sanctuary (he formerly worked at Virgin), we are informed that Sanctuary lawyers do not accept that Sanctuary has “re-organised” & therefore the reversion clause does not apply; therefore Sanctuary claim continuing rights to KC releases (which expire shortly in any case).

I have contacted ex-Main Man Mr. Merck & asked him whether his understanding of the “re-organisation” clause, which he agreed & signed to on behalf of Sanctuary, applied in the present case; ie that Sanctuary has new management & new ownership (UMG); which was, after all, precisely why the clause was inserted. Mr. Merck’s answer: yes. That the current management & ownership of Sanctuary does not accept this is, of & by itself, sufficient proof that the company has changed; or to use another word, been re-organised. If the company were the same, it would accept the reversion (which would not apply); as the company is not the same, it rejects the clause which therefore applies to it.

So, today’s example of straightforwardness in the music industry, from the (same) man at Sanctuary we are dealing with…

"Reorganisation" in the context of company law is a term of art - i.e it has a specialised meaning. It does not relate to changes in personnel, which is what you are referring to when you talk of changes to the company.

Essentially, SRGL is still the same company - it is just owned by different people.

And it is also run by different people

After a £110m loss in 2005 pressure from the U.K. financial and business leaders led to Smallwood becoming merely a general manager of the company, Taylor becoming Chief Executive and former British Airways chief executive Bob Ayling being installed as the new Chairman. On 26 May 2006, Ayling dismissed Taylor from the company over severe problems and inaccuracies in previous years’ accounting. Sanctuary Group PLC shares had already become drastically reduced in value after a restructuring designed to deal with the previous year’s huge loss.

In late 2006, Smallwood left the company, taking with him Iron Maiden’s management interests.

In April 2007 Billboard Magazine reported that Sanctuary Records would cease to exist as a new release label in the US that summer, though catalog, licensing, and new media operations would continue. On 22 October 2007, the record company was absorbed by Universal Music Group.

It’s official! Sanctuary is essentially the same company as it was, even though run by different people & with different ownership. So, if Sanctuary is essentially the company as it was, UMG shareholders can look forward to a rapid changeover of senior management & colossal losses – and revert to new releases?

I am not being difficult for the sake of things here - i am just dealing with the legalities. And as far as I can tell the rights currently sit with SRGL.

Straightforward: you know where you stand with a major.

Also in the inbox: the pix that generated furore in Albany, from the confiscated memory card I…

II…

These are the pictures, taken as a result of an action, taken as the result of a decision, which had me on my feet at The Egg in Albany, and took us off the stage.

14.46 A builder & joiner meeting with Mr. Cheese & Ian, to discuss the soon-to-be-becoming work.

17.53 An afternoon walk down the garden I…