Glynis O’Hara
GALLO Africa Limited is talking to Tusk Records about a takeover. A buyout of Tusk would give Gallo the largest share of the music market in South Africa, says Johnathan Park of the Association of the South African Music Industry (Asami). “But we’re talking 0,5 to 2% here – not a huge lead, but a lead nevertheless. It would probably sustain it for the next 12 months.”
Mike Oldfield, managing director of Tusk, and Alan Cherry, managing director at Gallo, have confirmed that the two companies are in negotiations, but say nothing is signed yet.
“Gallo is no longer a major player,” says Parks. “Its market share has dropped to single figures since it lost the international Sony label. That’s why it’s interested in Tusk, which is doing extremely well.” The South African market is currently dominated by Polygram, Sony, Tusk and EMI.
“We are having discussions with Gallo,” says Oldfield, “but the rumours are out of control as nothing has yet been signed. I hope we will reach an agreement soon. It’s an attractive target for investors because it’s the last local company representing a major international label, Warner Brothers.”
The Warner Brothers label has such artists as Madonna, Phil Collins and Simply Red. It is, says an observer, “a fantastic catalogue, and that’s the major attraction for Gallo”.
Gallo, which used to own the licence to press and distribute Sony (which has Michael Jackson and others), lost the label as companies started coming back into the country and setting up their own outfits.
Sony built new offices on Jan Smuts Avenue and started up its own local recording division with some former Gallo staff.
“The buyout might mean that Tusk’s publishing arm would be swallowed up by Gallo publishing,” said the observer. Also, Gallo is part of the CNA group and has a finger in the pie of most major retailers and owns a portion of CDT, the factory manufacturing CDs. So it could help jack up Tusk’s distribution.”