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BMG Buys Top Brit Acts On Sanctuary Records

German music rights company BMG has signed a deal to acquire the famous Sanctuary Records from Universal Music, it has been confirmed.

The reported £40m sale, which still needs approval by the European Commission (EC), follows on from a divestment plan after French-owned Universal purchased EMI Records for £1.2bn.

The Sanctuary catalogue includes over 170,000 recordings, and rights to Black Sabbath, Motorhead, Iron Maiden and The Kinks - including iconic songs You Really Got Me, All Day And All Of The Night, Waterloo Sunset and Lola.

The purchase also includes reggae, punk, folk and famous British artists from the 1960s, and comes after its purchase last year of Mute Records - whose roster includes Depeche Mode, Erasure, Nick Cave and Moby.

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BMG boss 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."

Within the last four years BMG has acquired one million music publishing copyrights. It is a joint venture between German media company Bertelsmann and the US private equity firm KKR, and is altering the music business model.

Music Week editor Tim Ingham told Sky News: "The traditional deal that a music label has done with artists is not dissimilar to a mortgage, with not so favourable terms - it would be lots of cash and to pay that off could take millions of sales and several albums.

"BMG is now a traditional publisher with copyrights but they want to grow their masters business and won't give artists a big advance but will profit share.

"The artist shares risk and profit, and BMG see that as ground-breaking way to release records into the market."

Vivendi (Milan: VIV.MI - news) recently sold the iconic Parlophone label to Warner Music for £487m, above industry estimates, and there are fears smaller names are being squeezed out by the big players.

Mr Ingham added: "It is a revolutionary model BMG is using and I think it makes perfect sense for established artists that need less marketing, it remains to be seen on what it will mean for emerging artists.

"BMG bought Mute for a reported £7m and Sanctuary for £40m – I think they will be laughing all the way to the bank."