Sir Elton John today sold the company founded to manage his business and emerging artists in a deal worth £16million.

Elton has agreed to hand control of Twenty-First Artists to entertainment group Sanctuary. He has signed a five-year management contract with Sanctuary that will allow the company to pick up commission on his earnings in all aspects of his career.

Selling Twenty-First Artists will also bring a windfall for its two other co-owners, Frank Presland and Keith Bradley, who have agreed to join Sanctuary for five years. The deal is being funded by a mixture of cash and shares.

Sir Elton said: “I feel strongly this will represent the continuation of a very creative period for me.”

Sanctuary operates the largest global management business for music artists with a star roster including Beyonce, Morrissey, Manic Street Preachers, Fleetwood Mac, Nelly and Iron Maiden.

The division generated £31.8million in revenues in the year to September 30 out of an overall turnover of £220.9million, which includes contributions from recorded music and merchandising.

In contrast, annual turnover at Twenty-First Artists totalled £4.7million in the year to March 31, 2004, and pre-tax profits were £1.55million.

According to the Sunday Times Rich List, Sir Elton is in 233rd place with a personal fortune of about £175million.

Although Sir Elton is the biggest music name managed by Twenty-First Artists, the company has also worked with Jamiroquai and Mis-Teeq during its five-year history and recently launched the career of James Blunt.

Executive chairman Andy Taylor said: “The status of Sir Elton John as a respected and hugely successful artist is unassailable and we are obviously very happy to be involved in his career going forward.

“I am pleased Sanctuary’s approach to the music industry is attractive to artists of the credibility of Sir Elton John.”

Sanctuary expects the deal to generate cost savings from lower legal and touring expenses, with the acquisition costs due to be recovered fully within three years.

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