The Transfer and Acquisition of Cultural Businesses : Public Policy Issues [CE-2015-2]

How do cultural businesses survive when their original creator or manager leaves? Just as in other economic sectors, in the cultural sectors the issue of transferral is usually only dealt with at the point where the manager quits their role. Transfers are rarely anticipated, ill prepared-for and often poorly handled, yet they are essential to the preservation of employment and the survival of the fabric of the business. Buyers must deal with the problems of accessing finance and express the need for support and information.

Depending on business type, the various cultural sectors have a number of different features when it comes to transfers/acquisitions. For businesses based around creation and production (art galleries or cinema production for example), acquisitions are relatively rare and this way of creating a business might even be seen as contrary to the spirit of the cultural entrepreneur, who sets up a business to express their artistic vision. In these areas, businesses are structured around building a catalogue, which is sold on when the business closes.

In the related areas of broadcast and commerce (bookshops and private theatres for example), the 2008 economic downturn marked a turning point at the end of the 2000s. In 2006, 60% of new businesses were the result of transfers, as opposed to 32% in 2010. Two main relevant support schemes in the transfer/acquisition area have been in existence for over twenty years, a sign that this is not a new issue for the sectors – ADELC, for bookshops and ASTP for private theatres. These two schemes fulfil two main criteria: firstly, to support diversity by avoiding overconcentration in a particular area, and secondly, to enable buyers, particularly professionals in the sector, to acquire such businesses.

In cultural activities between creation and commerce (architecture and audiovisual production activities for example), businesses transfers difficulties are sign of lack of structuration. Over the last twenty years, the architectural sector has started to change, with a number of businesses expanding, exporting their expertise and engaging salaried teams; essentially, a move towards a business model which today facilitates the sale and transfer of these firms. Rather like the architecture sector twenty years ago, the audiovisual production sector seems to be suffering from a process of excessive business fragmentation, limiting companies’ production, development and export capacity, and hindering the acquisition of businesses in the event of the termination of business.