Losses Do Not Deter Mean Fiddler's Expansion Plans

U.K.-based Mean Fiddler Music Group (MFMG) is going ahead with its ambition to become a leading operator of music venues and festivals in Europe despite reporting an operating loss of £1.5 million ($2.1 million) in the financial year ended Dec. 31, 2001.

Chairman Vince Power attributes the loss, on a turnover of £3.7 million ($5.5 million), to the reverse takeover of Mean Fiddler Holdings (as the company used to be called) by meanfiddler.com last November and the costs incurred as a result.

He admits business in MFMG's venues and bars was hit by the dive in international tourism following the Sept. 11 terrorist attacks in the U.S. and the cancellation of several major tours by American acts. And he emphasizes that the figures represent 12 months of meanfiddler.com's trading and only two months of the expanded company.

But he remains optimistic about the group's future: "I believe that the current year should show strong growth, as Mean Fiddler seeks to cement its position as the U.K.'s fastest-growing integrated music group with more acquisition opportunities complemented by strong organic growth."

That optimism emanates from the recent acquisition spree MFMG has embarked upon, helped by the £5 million ($7.5 million) raised during the reverse takeover.

This year alone saw the group buy a 16% stake in the Glastonbury Festival, one of the world's biggest annual music events. MFMG has an option to increase its stake to 40% in 2005. "For the first time, the festival's 105,000 tickets sold out well in advance of the date of the festival," a company document says.

On the music-venue front, the group bought British venue company Finlaw 279, which owns dance-music nightclubs Media in Nottingham, North England, and Tunnel in Glasgow, Scotland. This was followed by the June acquisition of bar/restaurant Manto in the Soho district of central London, in a bid to capitalize on London's well-established gay community. The gay night at the MFMG-owned Astoria, a leading London music venue that has booked such top performers as hitmakers Kylie Minogue and Westlife, will be cross-promoted at Manto.

Another foray into the venue arena will include the launch of a private-members club in a joint venture with British band Manic Street Preachers; details of this deal remain unclear.

FUTURE STRATEGY

What is certain is the future strategy to exploit its existing U.K. brands—including the Jazz Café and the Reading and Leeds festivals—on Continental Europe.

"We would like to develop the [concepts, such as Jazz Café] into cities in mainland Europe, particularly Paris, Barcelona, Berlin, and Amsterdam," a spokesperson says.

And by expanding its chain of festivals throughout Europe, the Mean Fiddler organization hopes to offer artists a one-stop shop for reaching more fans throughout the region.

The live-music setting of its existing business has prompted the company to expand into media and the recording business, in an effort to develop more cross-promotional opportunities aimed at the 5 million fans that attend the venues and festivals annually.

The first move into the radio business came in May, when it purchased Ritz 1035 AM, a U.K. station that will be rebranded Mean Country. Additionally, it has a stake in Storm, a consortium that bids for regional radio licenses.

And should the group successfully launch a record label, it will develop a catalog of CDs and DVDs by acts performing at the venues and promoted on the radio services. Negotiations with possible partners to start a label and expand into Europe are under way, the group says.

The international multimedia concept behind these ventures could possibly see the Mean Fiddler over-reaching itself. Yet, by bringing in such new investors as brewery group Bass Brewers, now a subsidiary of U.S.-based Coors Brewing Co., with an 8.75% stake, Power says he's convinced of a secure future.