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Factory's genesis was in January 1978, when Wilson, a TV presenter on Granada Television, formed a partnership with Erasmus, an unemployed actor and band manager.

The Factory name was first used for a club in May of that year, which featured local bands including The Durutti Column ( managed at the time by Erasmus and Wilson ), Cabaret Voltaire from Sheffield and Joy Division.

Advertising for the club was designed by Peter Saville, and in September the trio decided to release an EP of music by acts who had played at the club ( The Durutti Column, Joy Division, Cabaret Voltaire and comedian John Dowie ).

Rob Gretton, manager of Joy Division, decided he did not want the band to sign to a London record label, preferring to do it all in Manchester.

At that time there was a fairly successful punk label in Manchester called Rabid Records, run by Tosh Ryan ( formerly of music collective Music Force ) with Martin Hannett.

They had had several successful acts, including Slaughter & The Dogs ( whose tour manager was Rob Gretton ), John Cooper Clarke and Jilted John.

Rabid would build artists up with a few punk singles, and then license them to bigger labels ( Jilted John to EMI, Slaughter & The Dogs to Decca, John Cooper Clarke to CBS ).

Tony Wilson would often be around the Rabid offices and Rob Gretton was friends with Tosh Ryan, Martin Hannett and others in the set up as they were all from the same council estate in Wythenshawe.

After his seminal TV series ' So It Goes ', which gave TV debuts to the likes of Iggy Pop, The Sex Pistols, Buzzcocks etc., Tony Wilson was interested in the way Rabid Records ran, and was convinced that the real money and power was in album sales.

With a lot of discussion, Tony Wilson, Rob Gretton and Alan Erasmus set up Factory Records, stealing Martin Hannett from Rabid.

Thus Factory Records was born, with Wilson, Erasmus, Saville and producer Hannett as partners in the enterprise.

In 1978 Wilson compered the new wave afternoon at Deeply Vale Festivals ; this was actually the fourth live appearance by the fledgling Durutti Column and that afternoon Wilson also introduced an appearance ( very early in their career ) by The Fall featuring Mark E. Smith and Marc " Lard " Riley on bass guitar.