Appetite For Self-Destruction Part 2

BIG M MUSIC WAS blowing up. Wall Street wanted in. Bertelsmann, a 151-year-old German book publis.h.i.+ng company founded by a do-it-yourself printer named Carl, swooped in to buy RCA Records from General Electric for $300 million in 1986. Chief financial officers from all over the world were starting to look at record companies-or, even better, blowing up. Wall Street wanted in. Bertelsmann, a 151-year-old German book publis.h.i.+ng company founded by a do-it-yourself printer named Carl, swooped in to buy RCA Records from General Electric for $300 million in 1986. Chief financial officers from all over the world were starting to look at record companies-or, even better, CD CD companies-as an easy and fun way to pump up their bottom lines. "The all-vinyl business had its ups and downs. This one, it just seemed to grow without any end in sight," recalls Bob Merlis, a former publicist and corporate spokesman for Warner Music. "That's when the multinationals got all excited about the music business. And that's when the business changed from this homegrown kind of thing to 'we have to do better this next quarter from the last quarter or our parent companies will be upset.'" companies-as an easy and fun way to pump up their bottom lines. "The all-vinyl business had its ups and downs. This one, it just seemed to grow without any end in sight," recalls Bob Merlis, a former publicist and corporate spokesman for Warner Music. "That's when the multinationals got all excited about the music business. And that's when the business changed from this homegrown kind of thing to 'we have to do better this next quarter from the last quarter or our parent companies will be upset.'"

RCA and its all-American logo-Nipper the dog looking quizzically into a phonograph-going to the Germans was one thing. Could CBS Records, the all-American home of the Boss and the King of Pop and whatever Barbra Streisand was, really go to the j.a.panese? That's what the trades were saying, and the rumors turned out to be true.

Walter Yetnikoff was the catalyst.

In 1988, the CBS Records chairman had two problems. First, his legendary consumption of drugs and alcohol prompted one of his biggest rivals, MCA's Irving Azoff, to declare in an industry speech that CBS had a drug addict at the helm. But Yetnikoff was perhaps even more addicted to power, and a straight-shooting New Jersey billionaire named Laurence Tisch was standing in his way. Two years earlier, Tisch, owner of the Loews Corporation, had taken over a controlling interest in the label's parent, CBS Inc. At first, Yetnikoff encouraged Tisch-even tried to charm him-because he couldn't stand his previous boss at CBS Inc., Thomas Wyman, the president. But as exCBS Inc. general counsel George Vradenburg recalls: "When Larry got in, Larry really did not talk to Yetnikoff, and Yetnikoff felt a bit betrayed. [Yetnikoff] ended up disliking Larry perhaps more intensively than he disliked Tom Wyman." Yetnikoff called Tisch "the Evil Dwarf."

Tisch never quite understood the record business. As head of CBS Inc., he thought he could plunge into the record label, sidle up to the top executives and managers, and work his influence subtly, from within. But Yetnikoff got in his way, preventing Tisch from getting close to anybody. "[Tisch] thought the business relied too much on personalities and loyalties, and he wasn't confident that he understood the business," Vradenburg says. "To some extent, he had that little concern at the back of his head that the business wasn't clean. The people in it were not people that wore three-piece suits. They had not come out of any business that Larry had been a.s.sociated with. There was this sense that this business had problems with drugs, independent [radio] promotion and bribery and kickbacks. There wasn't anything specific.... But there was always that worry."

Yetnikoff was shocked to discover Tisch wanted to sell CBS Records to Nelson Peltz, another billionaire, whose fortune was not in music or entertainment but in the food business. Yetnikoff stomped into Tisch's office, employing some of his best expletives. Tisch calmly suggested that Yetnikoff could buy CBS Records for the same price he offered Peltz-$1.25 billion. In cash. The gears in Yetnikoff's law schooltrained brain started whirring. He knew he couldn't do anything without Sony, which had owned CBSSony Records since executives from the two companies established a joint venture in the late 1960s. That company was booming, thanks in part to the CD's popularity in j.a.pan. So Yetnikoff contacted Mickey Schulhof, then the highest-ranking American official at Sony. Of course, Yetnikoff didn't like him either. He called him "Meekee."

Unlike Yetnikoff, Schulhof was not a record man. He had degrees in physics from Cornell, Brandeis, and Grinnell, but went into business at age thirty. His resume gave him the background for a manufacturing job at CBS Records, and he oversaw things like recording studios and inventory control-"the noncreative side," he says. Clive Davis, the CBS executive who'd hired him, realized Schulhof was up for something more technical and introduced him to Harvey Schein, then the US president for Sony.

Schein hired Schulhof as an a.s.sistant in 1974, and within three months, Sony's charismatic chairman, Akio Morita, was asking to meet this new American employee he'd been hearing so much about. Morita, too, was a physicist. The two men bonded. Per Morita's instructions, Schulhof successfully built a Sony speaker factory in Delano, Pennsylvania. He also bonded with Morita's number two, Norio Ohga, who, like Schulhof, was an amateur pilot. The executives became Sony's power troika for the next two decades, zooming around the world for business and personal trips on the company's various Falcon jets. "Whatever you discussed with [Schulhof], he could answer you like a specialist, a professional," Ohga says. "When you try to discuss music with most people, or airplanes with most people, the conversation doesn't go very far. With Mickey, if we spoke of airplanes he was on the level of an airline pilot, and since he was a real learner, if I asked him to look into something he'd come back in a flash with the most detailed report you can imagine. No matter what the subject, he'd be there and master it."

Yetnikoff, who was not so cultured but just as smart, was naturally threatened by this kind of personality, as well as by Schulhof's proximity to j.a.panese power players he, too, considered friends. Nonetheless, in spring 1986 he called Schulhof, suggesting Sony buy CBS Records outright. To his surprise, Schulhof responded positively. "I called Morita at home and he said, 'Of course. Now is the golden time. We know software is important,'" Schulhof recalls. Yetnikoff and Schulhof knew Sony was desperate to expand into the US music business. In part, this was because of the CD, whose profits were jumping at that time to previously unimaginable heights. But it was also because Sony was preparing to release hardware like Digital Audio Tape, or DAT, and the MiniDisc, and its executives believed these formats could be almost as lucrative as the CD. When Sony had gotten burned before, with the ill-fated Betamax format, it was in part because the electronics giant had no movie software to supplement its hardware. Sony executives didn't want to make that mistake again.

For the next year, Sony and CBS haggled. Schulhof met with a lawyer and a financial adviser at 7:30 one morning at the Mayfair Regis. The three then showed up at Yetnikoff's house on Fifty-sixth Street. Yetnikoff, who was given to all-night drinking, dragged himself out of bed at 8:30 a.m., put on a bathrobe, instructed his wife to prepare especially potent coffee, and proceeded to extract an agreement that would bring him a fee of something like $20 million. They were all set to pull the trigger. Then William Paley, the legendary chairman of CBS Inc., who was known for his whims, decided the sale wasn't such a good idea. He strongly discouraged CBS's board, including Tisch, from going through with it. They were ready to vote "no."

Fate intervened. On October 19, 1987-Black Monday-the stock market crashed. Billionaire Tisch freaked out, fearing his financial future wasn't so secure after all. Paley or no Paley, he called Schulhof the next day and wanted to know if Sony's offer-$2 billion-still stood. Schulhof called Morita. "He said, 'If the company was worth $2 billion yesterday, it's still worth $2 billion today. My opinion hasn't changed,'" Schulhof recalls. "We bought CBS Records." In 1988, Yetnikoff finally succeeded in his quest, as he put it, to have somebody "install me as Super Czar and make me superrich."

What Yetnikoff didn't know was that an old friend, hyper-ambitious Thomas D. Mottola Jr., was quietly consolidating his power at CBS, positioning himself to take over the moment Yetnikoff slipped. Given Yetnikoff's drug-and-alcohol problems and his increasing lack of public discretion, Mottola and his allies felt certain that time was coming-soon. It would be a monumental power grab, one that would shape the way Sony's music companies, Epic and Columbia, would operate for more than a dozen years.

AT EIGHT YEARS OLD, Tommy Mottola of New Roch.e.l.le, New York, was a talented trumpet player. It won him a private school scholars.h.i.+p, but then he got bored and switched to the guitar. He had a rebel spirit, ditching school and running away from the military academy to which his parents had sent him when he decided he wasn't a fan of attending his private school. Mottola's mom and dad finally gave in, letting him come home if he behaved. He didn't exactly keep his side of the deal, playing in a rock band, racing cars, and partying so hard that an old friend later called him "the baddest boy in New Roch.e.l.le." Instead of focusing on school, he focused on girls. He dated Lisa Clark, daughter of powerful ABC Records founder Sam Clark, in the highfalutin' neighboring town of Harrison, then married her in 1971. Through a connection with his father-in-law, Mottola snagged small parts in four film flops, then tried to make it as a singer under the name "T. D. Valentine." He was terrible, but the experience gave him connections in the music business, and he was working as a song plugger for music publisher Chappell when he got his first break.

It was in the form of a hunky but weirdly dressed duo-one short guy with dark hair, one six-foot-plus guy with long, wavy, blond hair and platform shoes-called Hall and Oates. They could sing sing. Using his newfound industry connections, Mottola promised Daryl Hall and John Oates a record deal if they dumped their current manager and hired him instead. Like many young stars in the history of the record industry, they quickly went into debt ($230,000 in their case) to the first label that signed them. Then they switched to RCA Records, borrowed some more money, and...well, anybody who listened to the radio in the 1980s knows the rest. They catapulted Mottola into the record business. He named his management company Don Tommy Enterprises, which some in the business speculated was due to Mottola's fascination with the Mob. (Mottola was said to have been introduced to infamous boss Vincent "the Chin" Gigante.) Either way, he wore gold chains and purple leather jackets and looked cool.

Mottola soon changed the name of his company to Champion Entertainment, and through Hall and Oates's lawyer, Allen Grubman, he befriended CBS chairman Walter Yetnikoff. Some in the company came to call him "Walter's personal valet."

Yetnikoff liked Mottola so much that he promoted him to take over CBS's US labels, replacing veteran Al Teller. "Al was a Harvard MBA, very uptight, businesslike-every 'T' crossed and 'I' dotted and all that sort of thing. Not the most loved guy, but he loved music," recalls Bob Sherwood, a longtime CBS executive who ran Columbia Records for a year and a half during the transition to Sony. "Tommy was a manager. Celine Dion owes a lot more to him than [to] her voice coach. He saw this rough-hewn woman from Canada and turned her into a superstar. Tommy and I worked well together, but he had been a very abrasive manager-which the successful ones ultimately are."

One night in 1988, while attending a party for CBS blues singer Brenda K. Starr, Mottola received a demo tape from a mysterious benefactor. He stuck it in his limo's ca.s.sette deck and immediately knew he was hearing a star. Eighteen-year-old Mariah Carey and her multi-octave* voice had already received an offer from Warner's Mo Ostin for $300,000. voice had already received an offer from Warner's Mo Ostin for $300,000.

But Mottola received authorization from Yetnikoff to up the offer by $50,000, and he signed Carey. He also pushed her then-boyfriend, a producer, out of the picture, although neither Mottola nor Carey has ever said how. Mottola was married at the time, but he nonetheless canoodled with Carey around New York nightclubs. Soon he was divorced.

Yetnikoff continued to support his friend. He had given Mottola a $3 million bonus after just a few months in Teller's old job, and in 1990 arranged to have Mottola paid $15 million over five years, not counting bonuses. "One of the more interesting facts about Tommy is that he's extremely smart," Yetnikoff told a reporter. "He's hidden that from the world until recently." What Yetnikoff didn't know was that by the end of 1990, Mottola was fraternizing with his boss's long-term enemies. Yetnikoff was right-Mottola was extremely smart. He proved a master of power politics at Sony Music Entertainment. He saw cracks in the powerful chairman's foundation. For example, just two years after the Sony takeover, Yetnikoff was in rehab. He was in the process of divorcing his long-suffering wife, Cynthia. Warner had displaced Yetnikoff's previously dominant company in market share, building up new acts like R.E.M. and Anita Baker, whereas Sony's biggest labels, Columbia and Epic, relied on older stars like Jackson and Springsteen. And it wasn't like anybody had any sympathy. He'd built up incredible ill will over two decades of childish behavior, making enemies everywhere he went. Sometime back, Yetnikoff had supposedly p.i.s.sed off fellow record mogul David Geffen by asking one of his a.s.sistants whether the openly gay Geffen would teach Yetnikoff's girlfriend the finer points of oral s.e.x. Geffen started talking to his old friends, Bruce Springsteen's manager, Jon Landau, and Michael Jackson himself, pus.h.i.+ng them farther away from Yetnikoff. Landau issued a statement: "Neither Bruce nor I have had a significant conversation with [Yetnikoff] in nearly two years."

Mottola formed an alliance with Geffen and Allen Grubman. The influential industry lawyer had recently tried to strong-arm Yetnikoff into signing a ma.s.sive new contract for Michael Jackson, a client he'd recently taken over, but Yetnikoff blew up and banned Grubman, once his friend and confidant, from the building. (Jackson remained with Sony Music.) On advice from Geffen and Grubman, Mottola started schmoozing the Sony executives-most effectively, by befriending Akio Morita's aspiring pop-star G.o.ddaughter, Seiko Matsuda. Leaks appeared in the Wall Street Journal Wall Street Journal saying Yetnikoff was on his way out. Soon, Frank Dileo, a former Epic Records vice president of promotions, Yetnikoff's close friend, and Michael Jackson's manager, found himself the final link between Yetnikoff and his top artists. "Once they blow me out, Walter's vulnerable," Dileo remembers thinking. Shortly after that, Jackson abruptly fired Dileo. Yetnikoff suddenly had no artist connections. saying Yetnikoff was on his way out. Soon, Frank Dileo, a former Epic Records vice president of promotions, Yetnikoff's close friend, and Michael Jackson's manager, found himself the final link between Yetnikoff and his top artists. "Once they blow me out, Walter's vulnerable," Dileo remembers thinking. Shortly after that, Jackson abruptly fired Dileo. Yetnikoff suddenly had no artist connections.

Yetnikoff fell. Hard. Ohga, who had stayed at Yetnikoff's house and swam at his pool numerous times during his visits to New York, interrupted a vacation to meet with his Sony Music chief at his office. He patiently explained to Yetnikoff that he was tired of his public outbursts and lack of finesse with Sony's biggest stars. He put Yetnikoff on sabbatical, then pressured him to cut off his three-year contract. (Yetnikoff managed to retain $25 million in the settlement.) "I'm sorry, Walter," Ohga said, "but this hurts me more than it hurts you." Ohga did not shake his old friend's hand. After the Sony chief left with his attorney, a security guard showed up and asked Yetnikoff to leave through the side door. While Yetnikoff cleared out, Ohga was in the next room, symbolically handing over the reins to Mottola. (To Mottola's frustration, he wouldn't officially take over Sony Music until 1991, about a year after Yetnikoff left the company; at first, Ohga himself became chair of the music group and allowed Mickey Schulhof to run the daily operations as Mottola's boss.) After the purge, a reporter asked Yetnikoff what he would do. "Count my money," he replied. "And, believe me, that's going to take some time."

While Yetnikoff was counting, Mottola was spending. "He was riding that job for all it was worth," says an industry source from that time. Finally in charge of Sony Music, ex-manager Mottola gave Aerosmith, recently dropped by Geffen, a $25 million deal. He spent $800,000 to produce Carey's debut alb.u.m, $500,000 to redo her first video, and another $1 million on general promotion. The New York Times New York Times called him "Sony Music's Mr. Big Spender" in a front-page headline. In June 1993, he married Carey in a ma.s.sively overblown Manhattan wedding, in which the bride wore a 27-foot train and Springsteen, Tony Bennett, Ozzy Osbourne, and Robert De Niro were among the stars in attendance. The couple moved into a $10 million estate with a 20,000-square-foot house in Harrison, New York, surrounded by golf courses and country clubs. It was equipped with the works: shooting range, electronic security doors, 64-channel recording studio, indoor swimming pool, and Ralph Lauren as a neighbor. called him "Sony Music's Mr. Big Spender" in a front-page headline. In June 1993, he married Carey in a ma.s.sively overblown Manhattan wedding, in which the bride wore a 27-foot train and Springsteen, Tony Bennett, Ozzy Osbourne, and Robert De Niro were among the stars in attendance. The couple moved into a $10 million estate with a 20,000-square-foot house in Harrison, New York, surrounded by golf courses and country clubs. It was equipped with the works: shooting range, electronic security doors, 64-channel recording studio, indoor swimming pool, and Ralph Lauren as a neighbor.

Well before the wedding, Sony Music Entertainment employees fired up their publicity, marketing, and promotion machines to focus almost exclusively on Carey. "The eight-hundred-pound gorilla in the room was the fact that they were having a relations.h.i.+p and everybody in the world knew it," Bob Sherwood recalls. "There's not anybody with a brain who wasn't going to put maximum effort into her." During a contract negotiation in the early 1990s, Michael Jackson called an old friend, Mickey Schulhof, to complain that his sales slump was due to Mottola putting disproportionate resources into Carey's career. Yet, as Sherwood points out, the Carey-Mottola-Sony triumvirate paid off. Her Sony CDs would sell 55 million copies in the United States alone, putting her in the Top 20 of all time.

By 1992, though, given the hits from Carey, Dion, and Michael Bolton, Sony had a pop-only reputation. Springsteen had split with the E Street Band. Disturbing revelations about dalliances with young boys were starting to dog Michael Jackson. Sony Music, once a giant in the form of CBS Records, looked weak compared to compet.i.tors like Warner and even EMI. It wasn't that Sony Music was doing poorly, in general. The company's operating profits, according to the New York Times, New York Times, jumped by 60 percent between 1987 and 1991. But its top rival, Warner, jumped by 60 percent between 1987 and 1991. But its top rival, Warner, doubled doubled its profits during the same period. This was unacceptable in a hyper-compet.i.tive business. Mottola would soon change all that. At one point Michele Anthony, the hard-nosed attorney for rock acts such as Guns N' Roses and Alice in Chains, told Mottola over dinner: "I wouldn't sign a rock act with Sony if my life depended on it. You guys are arrogant and out of touch, and your company has been living off the fat of its superstar roster for so long you don't have a clue how to develop a new act." Mottola hired Anthony, who started bringing hit rock acts to the label. Before long, Sony's high advances to top artists prompted huge bidding wars, helping to set the lavish new deals for Michael Jackson and Aerosmith as the industry standard. its profits during the same period. This was unacceptable in a hyper-compet.i.tive business. Mottola would soon change all that. At one point Michele Anthony, the hard-nosed attorney for rock acts such as Guns N' Roses and Alice in Chains, told Mottola over dinner: "I wouldn't sign a rock act with Sony if my life depended on it. You guys are arrogant and out of touch, and your company has been living off the fat of its superstar roster for so long you don't have a clue how to develop a new act." Mottola hired Anthony, who started bringing hit rock acts to the label. Before long, Sony's high advances to top artists prompted huge bidding wars, helping to set the lavish new deals for Michael Jackson and Aerosmith as the industry standard.

"n.o.body likes to overspend when you're on the corporate side," Schulhof says. "But I knew what Tommy was spending. I never had a problem with it, and I don't think what he spent was disproportionate with what others were spending at the time in the industry."

Mottola's personal expenses, including travel, ballooned to $10 million a year. Three of his five a.s.sistants made $180,000 a year. Employees received $550 Gucci bags for the holidays. Mottola's brain trust, including Anthony and rising Columbia chief Don Ienner, rode to the top of the Sony Building in New York in a special freight elevator, and drivers shuttled them around the city in new Mercedeses. They became Mottola's famiglia famiglia, as New York New York magazine later put it in a profile. Jeff Ayeroff, a longtime Warner Music executive in LA who joined New Yorkbased Sony Music in 1994, as cofounder of the Work label, says: "It was sort of like the West Coast was liberal and the East Coast was take-no-prisoners. These guys were very aggressive and very smart and did whatever it took." When Work signed a young actress, Jennifer Lopez, Mottola instructed his people to open their wallets. "He let us spend more money on marketing than anybody else would have," Ayeroff recalls. J. Lo's 1999 debut magazine later put it in a profile. Jeff Ayeroff, a longtime Warner Music executive in LA who joined New Yorkbased Sony Music in 1994, as cofounder of the Work label, says: "It was sort of like the West Coast was liberal and the East Coast was take-no-prisoners. These guys were very aggressive and very smart and did whatever it took." When Work signed a young actress, Jennifer Lopez, Mottola instructed his people to open their wallets. "He let us spend more money on marketing than anybody else would have," Ayeroff recalls. J. Lo's 1999 debut On the 6 On the 6 went triple platinum. went triple platinum.

n.o.body worried about money at Sony. "I didn't look at the financials. I wasn't entrepreneurial, and I wasn't running the company," recalls Michael Goldstone, a talent whiz who linked an unknown San Diego singer, Eddie Vedder, with an established Seattle rock band and signed them to Epic as Pearl Jam. "I was this A&R gunslinger going out and finding bands." Pearl Jam and another of Goldstone's discoveries, Rage Against the Machine, became superstars. So did Ricky Martin, J. Lo (who was rumored to have gone out with Mottola after he broke up with Carey), Destiny's Child, the Dixie Chicks, and Shakira. It didn't matter how much the label spent as long as the hits kept coming.

ALTHOUGH A VETERAN Sony executive described Mottola's company to Sony executive described Mottola's company to New York New York as "a real oligarchy," Bob Sherwood says the chairman and his people aspired to rebuild the label in Warner's laid-back image. "They wanted to move Columbia from being a New Yorkbased, relatively uptight, suit-and-tie kind of label to a more Warner look," he says. "Tommy brought lots of Warner executives. They liked a more free-flowing style." To be sure, Warner's chairman, the goateed and erudite Mo Ostin, had built a record label where freewheeling executives could thrive. None other than Frank Sinatra had hired Ostin in 1963 to run his new label, Reprise, and Ostin had spent the better part of three decades signing artists on instinct, including Jimi Hendrix, Joni Mitch.e.l.l, the Kinks, Frank Zappa, and Neil Young, and letting them do their thing over time. "Mo loved talent magnets like Geffen, [Elektra chief Bob] Krasnow, and [longtime Warner Music executive Lenny] Waronker," writes retired Warner executive Stan Cornyn in as "a real oligarchy," Bob Sherwood says the chairman and his people aspired to rebuild the label in Warner's laid-back image. "They wanted to move Columbia from being a New Yorkbased, relatively uptight, suit-and-tie kind of label to a more Warner look," he says. "Tommy brought lots of Warner executives. They liked a more free-flowing style." To be sure, Warner's chairman, the goateed and erudite Mo Ostin, had built a record label where freewheeling executives could thrive. None other than Frank Sinatra had hired Ostin in 1963 to run his new label, Reprise, and Ostin had spent the better part of three decades signing artists on instinct, including Jimi Hendrix, Joni Mitch.e.l.l, the Kinks, Frank Zappa, and Neil Young, and letting them do their thing over time. "Mo loved talent magnets like Geffen, [Elektra chief Bob] Krasnow, and [longtime Warner Music executive Lenny] Waronker," writes retired Warner executive Stan Cornyn in Exploding Exploding. "He collected them like his wife, Evelyn, collected fine scarves."

To ill.u.s.trate the point, one day in 1983, one of Krasnow's hotshot A&R executives, Michael Alago, walked into his office talking up a new, eardrum-shattering heavy-metal band that had almost zero chance of ever getting on the radio. Krasnow really had no idea what Alago was talking about, but he authorized him to sign Metallica anyhow. "He trusted my instincts. Sometimes he said, 'You're crazy, we're not doing it,'" Alago says. "But he knew that I knew we were on to something." Metallica's Elektra alb.u.ms, beginning with Kill 'Em All, Kill 'Em All, would combine forces with Guns N' Roses to begin pus.h.i.+ng hair metal off the charts. (Later, a succession of grunge bands would finish the job.) Although they started as long-haired teenagers hawking tapes, Metallica would sell 58 million alb.u.ms by late 2008, just 2.5 million less than Michael Jackson, in the United States. would combine forces with Guns N' Roses to begin pus.h.i.+ng hair metal off the charts. (Later, a succession of grunge bands would finish the job.) Although they started as long-haired teenagers hawking tapes, Metallica would sell 58 million alb.u.ms by late 2008, just 2.5 million less than Michael Jackson, in the United States.

But Warner Music, by the early 1990s, was moving in a more corporate direction, just like every other major label during the CD boom. In this new world, patient, instinctive, aging talent aficionados like Ostin and Krasnow were rapidly becoming obsolete.

This Warner s.h.i.+ft began, as most things at Warner did, with company chairman Steve Ross. Born Steven Jay Rechnitz in Brooklyn, son of Jewish immigrants, Ross married into money in 1954. He became the head of his father-in-law's company, Kinney Parking, as it was expanding from funeral homes to parking lots. By the late 1960s, Ross had made a lot of money, but he didn't want to spend the rest of his life worrying about funeral homes and parking lots. He identified a bunch of growth areas, and the one that interested him most was "leisure time." So he expanded, first by buying National Periodical Publications, the company that owned MAD MAD magazine, and then by acquiring a huge talent agency, WarnerSeven Arts. One of the company's most valuable a.s.sets was a record label, Warner Reprise. Another a.s.set was Atlantic Records, owned by perhaps the most famous record industry talent scout ever, Ahmet Ertegun, who (thanks to a hefty paycheck) agreed to be part of the $400 million deal. (Sinatra, as founder of Reprise, received $22.5 million-his biggest-ever single check at that time.) magazine, and then by acquiring a huge talent agency, WarnerSeven Arts. One of the company's most valuable a.s.sets was a record label, Warner Reprise. Another a.s.set was Atlantic Records, owned by perhaps the most famous record industry talent scout ever, Ahmet Ertegun, who (thanks to a hefty paycheck) agreed to be part of the $400 million deal. (Sinatra, as founder of Reprise, received $22.5 million-his biggest-ever single check at that time.) Ross's style was to pay top executives like Ostin and Ertegun lavishly and leave them alone. The company thrived this way for years, and employees of the Burbank record label grew to, if not exactly love, then respect New York Citybased Ross as a sort of benevolent corporate grandfather. "There were many people there in key positions that had been there a very long time," recalls Jorge Hinojosa, manager of Warner's first rap star, Ice-T. "Even the [Burbank] building was nicer than the other buildings. It was like this ski chalet-interesting wood and interesting design. It was a beautiful place."

So employees more or less trusted Ross when, in 1986, he started indulging merger pitches from Time Inc., the magazine empire. Ross was especially interested because of one of Time's a.s.sets, cable TV, which he saw as a growth industry at least as promising as "leisure" had been in the late 1960s. Time executives were impressed with moneymaking Warner Music. "At Time Warner, the record company was, cash on cash, the best business in the company," says Michael Fuchs, an executive of Time Warnerowned HBO who was instrumental in merging the companies. "Quarters when we used to make our presentation, the music guys would stand up and we'd go, 'Holy s.h.i.+t!' We couldn't believe it, how good their business was." After haggling for almost four years with Time executives, Ross agreed in 1990 to merge the two companies into Time Warner, with a stock market value of more than $15 billion and annual revenue of more than $10 billion. (The merger also started with $16 billion in debt.) Ross became CEO.

In late 1992, Ross, sixty-five, died unexpectedly of prostate cancer. Gerald Levin, a brilliant manager with a photographic memory, stepped in to become the company's chief executive officer. Levin, however, knew little about the record business. Pressured by debt, he and other corporate types started to demand that the music unit function like every other unit. "It was a pretty benign place when Steve Ross was alive and Mo reported to him," says Jeff Gold, Warner Music's executive vice president and general manager for much of the 1990s. "When they sold to Time, especially after Steve Ross died, all of a sudden people are looking at your quarterly results more closely.... If you sell fifty million records one year and seventy [million] the next year because of a couple of fluke records, then they say, 'All right, how are you going to sell eighty?' And it just wasn't a business that worked that way." Under Levin, corporate types like Robert Morgado began to rise at Warner Music, while longtime executives like Mo Ostin found their influence diminished, an irritating development for the company's lower-level but experienced record men like Doug Morris and Danny Goldberg of Atlantic.

Levin's vision for Warner Music was "do no harm." Every Time Warner executive understood cable TV was the Almighty Future, and all the music and movie divisions had to do was quietly make money and not create a ruckus.

So it was interesting timing when Warner artist Ice-T, one of the most profane, funny, and forceful rappers of all time, chose to make a heavy metal record with his new band, Body Count. One song on this record, "Cop Killer," juxtaposed chilling gunshot noises against first-person lyrics encouraging violence against police officers. "What do you want to be when you grow up?" Ice-T asked ominously. "Good choice." Of course, the song was political-a response to police brutality in LA, a problem that had recently caused public outrage with the videotaped beating of Rodney King at the hands of the LA Police Department.

The story of "Cop Killer" began when Ice-T dropped off his new Body Count Body Count record to Warner executives. To a person-well, except for Russ Thyret, the label's executive vice president of marketing and promotion, who worried about the response from police groups and radio programmers-the staff loved it. They were also fond of Ice-T, whose menacing public persona masked the warm, savvy, charismatic businessman who'd sold more than 2 million alb.u.ms for Seymour Stein's Sire Records with little overhead. Back then, hip-hop was a street genre, and a few well-placed singles at key Los Angeles or Chicago radio stations gave artists the credibility they needed for heavy sales. Ice was a master of this approach, and he was also hot, having just coheadlined the first Lollapalooza festival around the United States in summer 1991. record to Warner executives. To a person-well, except for Russ Thyret, the label's executive vice president of marketing and promotion, who worried about the response from police groups and radio programmers-the staff loved it. They were also fond of Ice-T, whose menacing public persona masked the warm, savvy, charismatic businessman who'd sold more than 2 million alb.u.ms for Seymour Stein's Sire Records with little overhead. Back then, hip-hop was a street genre, and a few well-placed singles at key Los Angeles or Chicago radio stations gave artists the credibility they needed for heavy sales. Ice was a master of this approach, and he was also hot, having just coheadlined the first Lollapalooza festival around the United States in summer 1991. Body Count Body Count came out March 30, 1992. The first single, "There Goes the Neighborhood," was about to hit MTV. came out March 30, 1992. The first single, "There Goes the Neighborhood," was about to hit MTV.

Then, in late April, a jury acquitted the three officers accused of beating Rodney King, and riots broke out all over Los Angeles. Racial tensions heated up across the country, and "Cop Killer" blew up into front-page headlines. It's hard to pinpoint the exact date that "the f.u.c.king 'Cop Killer' fuse gets lit," as Hinojosa remembers it, but he knows it was a few days before he and Ice boarded a private Warner jet to meet with label executives in New York to sign a new record deal. Madonna had just received $60 million for a multimedia deal including books and movies, and Ice-T and Hinojosa were fantasizing about a similar deal worth $10 million. But Warner executives' tone had abruptly changed. "By the time we land in New York, the talk [at the meeting with Warner] wasn't about 'how can we capitalize on this s.h.i.+t we're doing?' It was like, 'This "Cop Killer" s.h.i.+t is kind of messed-up,'" Hinojosa says. "We got dressed to go to a party. We didn't realize we were going to a funeral." Time Warner was in crisis management mode.

The controversy dragged on, through the end of 1992. Picketers marched in front of the company building, carrying "Time Warner Puts Profits Over Police Lives" signs. Warner Music execs received death threats. Police groups boycotted the company. Stockholder Charlton Heston stood up at a meeting and recited Ice-T lyrics such as "I'm 'bout to dust some cops off!" like Moses reading the Ten Commandments. His powerful peers threatened to withdraw stock. Ice posed in a policeman's uniform on the cover of Rolling Stone Rolling Stone. He provocatively asked reporters why songs like Johnny Cash's "Folsom Prison Blues," with the line "I shot a man in Reno just to watch him die," didn't get the same kind of response. At first, Time Warner supported Ice-T as an artist with the right to free speech. Then the company caved, putting out a version of Body Count Body Count (with Ice's authorization) minus the "Cop Killer" track. Executives backed off their impa.s.sioned free-speech defense. For the cover of Ice-T's (with Ice's authorization) minus the "Cop Killer" track. Executives backed off their impa.s.sioned free-speech defense. For the cover of Ice-T's next next alb.u.m, alb.u.m, Home Invasion Home Invasion, he wanted to use a cartoon design of a teenager listening to rap and enjoying Malcolm X's autobiography as exaggerated ghetto bad guys break into houses, brandish large guns, and grope scantily clad women. He brought it to Warner's cuddly, chalet-style offices in Burbank. Executives debated the cover but decided they couldn't support it. Ice-T knew what time it was. In a letter to Warner, he announced his split from the label. He put out 1993's Home Invasion, Home Invasion, provocative cover and all, on an independent hip-hop label, Priority Records. provocative cover and all, on an independent hip-hop label, Priority Records. Time Time's reviewer, a Time Warner employee, called the alb.u.m "balanced and coherent."

Warner's capitulation to public pressure over a work of art was symbolic of larger problems within the company. Robert Morgado, whom Master of the Game Master of the Game author Connie Bruck described as Steve Ross's "hatchet man," was slowly flexing his muscle, pus.h.i.+ng for changes at the various labels where Ross had been basically hands-off since, well, forever. "No one ever replaced [Ross] in terms of being able to balance the complex cast of characters-all of whom derived some sense of direction from him," remembers Danny Goldberg, who would briefly head the label after the Time-Warner merger. "Once [Ross] died, Morgado tried to make it a more conventional structure, with everyone reporting to him. And Mo never got along with him. And [Morgado] never got along with Doug Morris, either." author Connie Bruck described as Steve Ross's "hatchet man," was slowly flexing his muscle, pus.h.i.+ng for changes at the various labels where Ross had been basically hands-off since, well, forever. "No one ever replaced [Ross] in terms of being able to balance the complex cast of characters-all of whom derived some sense of direction from him," remembers Danny Goldberg, who would briefly head the label after the Time-Warner merger. "Once [Ross] died, Morgado tried to make it a more conventional structure, with everyone reporting to him. And Mo never got along with him. And [Morgado] never got along with Doug Morris, either."

Ostin couldn't take it. In early 1994, he left the label after thirty-one years. Morgado initially promoted Morris from head of Atlantic to head of Warner's US operations overall, thinking he could control the younger executive. Instead, Morgado kicked off an epic, label-wide power struggle, which The Wall Street Journal The Wall Street Journal called "open warfare." Elektra's veteran executive, Bob Krasnow, not one to easily accept reporting to new people, raised a stink and left the company. The office shouting matches between Morris and Morgado reverberated along yards and yards of corporate hallways. The company divided into factions. In 1995, Time Warner's Levin felt Morgado had alienated too many of Warner's music executives and fired him. called "open warfare." Elektra's veteran executive, Bob Krasnow, not one to easily accept reporting to new people, raised a stink and left the company. The office shouting matches between Morris and Morgado reverberated along yards and yards of corporate hallways. The company divided into factions. In 1995, Time Warner's Levin felt Morgado had alienated too many of Warner's music executives and fired him.* Later, over lunch, Morris would tell Morgado he regretted the last eighteen months. The two shook hands. "To observers, it was like tacking a happy ending on to Later, over lunch, Morris would tell Morgado he regretted the last eighteen months. The two shook hands. "To observers, it was like tacking a happy ending on to King Lear King Lear," Stan Cornyn wrote. But it wasn't over yet.

Michael Fuchs, a longtime HBO executive and Time Warner power player, took over. He started to see cracks in Warner Music's foundation. He had slightly more polish than Morgado, but he had a nasty habit of telling longtime record executives-including Morris-what they didn't want to hear. "When I got there [Warner Music], the wheels had begun to fall off a little bit," Fuchs says. "They'd had about ten years of the CD boom, and when the money rolls in like that there's a tendency to live big and everything seemed quite easy. I can't attest to what it was like before that. But when things began to slow down, it became evident that these businesses were not being run very tightly." Fuchs started "moving the furniture around right away," as he puts it. He fired Morris, shut down expensive label experiments-like a direct-mail operation that never really went anywhere-and made cutting fat out of budgets a hallmark of his leaders.h.i.+p. But he got no further than Morgado. Levin fired Fuchs, too, in November 1995, after six months.

Just before he left, though, Fuchs helped Levin make a historic decision. It seems quaint today, after fifteen years of explicitly violent and s.e.xual hip-hop from Snoop Dogg to Young Jeezy, but in 1996, Time Warner was unwilling to irritate its moralistic shareholders in the post"Cop Killer" era. C. DeLores Tucker, spotlight-loving head of the National Political Congress of Black Women, made sure of that. She owned ten shares of Time Warner stock and showed up at a May 1996 shareholders' meeting at City Center in New York. In a seventeen-minute speech that made headlines everywhere, Tucker denounced Interscope Records, a division of Warner Music, for its violent and misogynistic hip-hop music. A third of the crowd spontaneously applauded, including Henry Luce III, son of legendary Time Inc. founder Henry Luce. Under pressure, Levin and Fuchs divested from Interscope. Jimmy Iovine and Ted Field, owners of the hip-hop label, bought their 50 percent stake back from Warner, then turned around and sold the label to MCA for $200 million. "[Warner Music] couldn't take the heat and decided to get rid of Interscope," says Roger Ames, who became Warner Music chairman in 1999. "Certainly, for that period, their record company suffered by being owned by Time Warner."

As for Interscope, it would fare quite well, breaking artists like Eminem, 50 Cent, Gwen Stefani, and The Game over the next decade.

BY THE EARLY 1990S, it was getting harder for anybody to compete with major labels like Sony and Warner, who were spending tens of millions of their ma.s.sive CD profits to turn talented new artists into Michael Jacksonstyle hit machines. Even A&M, the independent label that had started in Alpert's garage in 1962, was struggling. "Big advances were starting to be more of a key fix in this game," recalls Jerry Moss, the label's cofounder.

In 1989, Moss and his partner, Herb Alpert, decided twenty-seven years of independence was enough. Their storied label was in the midst of a dismal year-its biggest single was "Rock On," a cover song by hunky The Young and the Restless The Young and the Restless star Michael Damian. Moss was friendly with the head of PolyGram, David Fine, and he approached him about buying A&M. star Michael Damian. Moss was friendly with the head of PolyGram, David Fine, and he approached him about buying A&M.

Fine was receptive. After buying troubled Casablanca Records in the late 1970s, PolyGram had spent much of the postdisco crash in free fall. But the CD bailed out the company, in part because the public was suddenly eager to buy old content-from the Supremes to Bob Marley to A&M stalwarts like Joe c.o.c.ker and the Police. PolyGram became the proverbial big, hungry fish. It ate Island Records, the maverick record company that had turned Bob Marley and U2 into stars. It ate Motown, which no longer resembled the legendary Detroit company of Marvin Gaye and the Supremes but still had a huge catalog. And it ate A&M, for a reported $500 million in 1989. "We had the opportunity to get fresh new repertoire in the company," says Jan Cook, PolyGram's finance chief at the time. "A&M had a whole catalog roster that was not to be sneezed at."

The sale wasn't supposed to change much at A&M. Jerry Moss stayed on, working with his friend David Fine, and theoretically he would continue to bring Stings and Janet Jacksons onto the roster. But Moss and Friesen started to feud more than usual. Over twenty-five years, they had drifted to their own sweet spots within the company, Friesen with marketing and day-to-day management and Moss with sales. Often, though, Moss would pop up out of nowhere to undercut a Friesen decision. "From my perspective, Gil was a terrific leader, very involved, very forward-thinking, very engaged-and really had to work around things. It was not unusual for Jerry to sort of stick his nose into Gil's office and just question what was going on," recalls Al Cafaro, who would later run the company. "I think that was something that Gil struggled with." After the PolyGram sale, the long-standing relations.h.i.+p between Moss and Friesen changed. Moss became PolyGram's official contact at A&M. Friesen, who had essentially been running the company forever, chafed at the new structure. The company divided into Moss factions and Friesen factions. Friesen approached PolyGram execs and declared he was in charge. According to one insider, Moss interpreted this move as disloyal. By the end of 1990, Friesen had resigned, under pressure from A&M's board, which included Jerry Moss and Herb Alpert.

Neither Moss nor Friesen is willing to go into much detail about this period. "We had a different philosophical approach to where the company should go," Moss says. They remained estranged until the Rock and Roll Hall of Fame inducted the Police in 2003. "That was great fun," Moss says. "I'll always give old friends the benefit of the doubt."

Moss, too, left A&M after PolyGram's leaders.h.i.+p changed. David Fine was out. French record executive Alain Levy was in. "All of a sudden I had a new boss, who wasn't laughing at my jokes," Moss says wryly. The company heated up again, briefly, under Cafaro, as Soundgarden, Janet Jackson, and Sting took off, but A&M would never regain its former glory as the weird hit indie label that grew out of Herb Alpert's garage.

A&M was hardly the only independent to sell out during the CD boom. In 1990, David Geffen sold his namesake record label to the music-and-movies corporation MCA for $545 million. Later that year, Sony's j.a.panese compet.i.tor, Matsus.h.i.+ta, bought its own software company-MCA-for $1.6 billion. Nirvana's Kurt Cobain may have worn a "Corporate Rock Magazines Still Suck" T-s.h.i.+rt on the cover of Rolling Stone Rolling Stone in 1992, but Nirvana's record label, Geffen, was being rolled up into bigger and bigger corporations. in 1992, but Nirvana's record label, Geffen, was being rolled up into bigger and bigger corporations.

Edgar Bronfman Jr., a songwriter and longtime music and movie fan, paid close attention to these mergers. Bronfman was the third-generation heir of the Seagram Co., the ma.s.sive Montreal distillery of Chivas Regal, Crown Royal, Captain Morgan rum, and Tropicana fruit juice. At first, Bronfman chose not to follow his father, Edgar Bronfman Sr., into the family business. Instead, he wrote songs with a partner, Bruce Roberts, including Dionne Warwick's soupy 1985 ballad "Whisper in the Dark." (Bronfman Jr.'s nom de rock nom de rock was "Junior Miles," and he gets several songwriting credits on was "Junior Miles," and he gets several songwriting credits on Intimacy, Intimacy, Roberts's 1995 alb.u.m for Atlantic Records.) Bronfman also dabbled in Hollywood, producing movies like 1982's Roberts's 1995 alb.u.m for Atlantic Records.) Bronfman also dabbled in Hollywood, producing movies like 1982's The Border The Border, which flopped despite costars Jack Nicholson and Harvey Keitel. That same year, with no entertainment successes to speak of, Bronfman finally accepted a job from his father to be Seagram's a.s.sistant to the office of the president. Within a few years, his father made him chairman.

So Bronfman accepted that his destiny was not to be the next Neil Sedaka. But there was still a chance to be the next Steve Ross. Bronfman waited for the right moment to jump in. He focused on the storied MCA, which owned masters by the Who and B.B. King but had in recent hitless years earned a reputation as the "Music Cemetery of America." In March 1995, Bronfman pushed the Seagram board to buy MCA for $5.7 billion. This was not, as some have speculated, because Bronfman the songwriter wanted a pathway into the music business. Bronfman says he merely wished to diversify the company into a more stable North American industry. "As far as I know, the board at Seagram may have been entirely and blissfully ignorant of my songwriting career," Bronfman says today.

BRONFMAN STRIPPED OFF the MCA name, which he deemed overly corporate, and replaced it with a more familiar one that symbolized his rebuilding efforts-Universal. Hollywood jeered-what business did this ent.i.tled liquor-and-oil baron have in movies and music?-but Bronfman wasn't finished. The Seagram tyc.o.o.n also had his eye on PolyGram. the MCA name, which he deemed overly corporate, and replaced it with a more familiar one that symbolized his rebuilding efforts-Universal. Hollywood jeered-what business did this ent.i.tled liquor-and-oil baron have in movies and music?-but Bronfman wasn't finished. The Seagram tyc.o.o.n also had his eye on PolyGram.

Purchasing A&M, Island, and Motown, in addition to reaping big European profits off its vast cla.s.sical music catalog, made PolyGram the world's biggest music company by 1998, with hits by country star Shania Twain, rappers Jay-Z and DMX, and teen pop trio Hanson. But its young film division had not quite turned the corner to profitability. And the company's chief executive, Alain Levy, believed film was the future. Levy had convinced Jan Timmer, head of his parent company, Philips, that PolyGram should invest heavily in building a credible film division. But Timmer retired in 1996, and his successor, Cor Boonstra, who came from the international food conglomerate Sara Lee, didn't know from the film business. "Levy took the position that 'I'm doing a great job with the biggest record company in the world, this is what I'm doing, these are the reasons I'm doing it, leave me alone,'" says Al Cafaro, the A&M chief who worked for Levy after PolyGram bought his company. "And Boonstra didn't like that."

One day in 1998, Hollywood-obsessed Levy flew from London to Los Angeles to meet with Bronfman. They were to discuss PolyGram buying Universal's film division, owned at the time by Bronfman's Seagram Co. Bronfman, however, may have known something Levy didn't know. At that very moment, Seagram was in the process of buying PolyGram. "I don't think [Boonstra] had Alain Levy much in the loop," says a source close to the negotiations. Although Bronfman says he's pretty sure Levy knew he was buying the company when he first met him, many PolyGram executives of the time had no idea the cataclysmic merger was coming. "We were certainly taken by surprise," recalls longtime PolyGram finance chief Jan Cook.*

At the time, Cook was fifty-nine. He had been planning to retire within the next four or five years. He was at his second home, in Portugal, when he received a call from PolyGram's president: Could you fly to New York City right away to complete some paperwork? Seagram just bought the company. Could you fly to New York City right away to complete some paperwork? Seagram just bought the company. "Using private jets and the Concorde and such things, I was able to get there in thirty-six hours," Cook recalls. He did the due diligence, but he wasn't happy about it. To Cook, the company had been sold out from under him. Seagram offered him the chief financial officer position with its newly renamed Universal Music Group. "But what you get with this merger, all the people were going to be axed," he says. "And I didn't want to be the guy who was doing that to my colleagues and the employees I'd worked with and trusted to build the company. I said, 'No, thank you very much,' and retired." Seagram fired 980 PolyGram employees and cut 200 acts from its music roster. The company abruptly closed fifty-three-year-old Mercury Records, former home of Dinah Was.h.i.+ngton and Bon Jovi, and merged Geffen and A&M with Interscope, the onetime gangsta rap pariah label. "They swallowed up my company, and I was gone," says Mark Kates, the Geffen A&R executive who worked with Nirvana, Teenage Fanclub, and Sonic Youth and signed Beck and Weezer. "Seagram is a company based on selling the same amount of fluid to the same part of the world to the same amount of people every year. That's great, but the record business could not be more different than that." Geffen had been the most successful rock label of the early 1990s, but it was no longer the future. That belonged to hip-hop and pop. Interscope Records. And Universal. "Using private jets and the Concorde and such things, I was able to get there in thirty-six hours," Cook recalls. He did the due diligence, but he wasn't happy about it. To Cook, the company had been sold out from under him. Seagram offered him the chief financial officer position with its newly renamed Universal Music Group. "But what you get with this merger, all the people were going to be axed," he says. "And I didn't want to be the guy who was doing that to my colleagues and the employees I'd worked with and trusted to build the company. I said, 'No, thank you very much,' and retired." Seagram fired 980 PolyGram employees and cut 200 acts from its music roster. The company abruptly closed fifty-three-year-old Mercury Records, former home of Dinah Was.h.i.+ngton and Bon Jovi, and merged Geffen and A&M with Interscope, the onetime gangsta rap pariah label. "They swallowed up my company, and I was gone," says Mark Kates, the Geffen A&R executive who worked with Nirvana, Teenage Fanclub, and Sonic Youth and signed Beck and Weezer. "Seagram is a company based on selling the same amount of fluid to the same part of the world to the same amount of people every year. That's great, but the record business could not be more different than that." Geffen had been the most successful rock label of the early 1990s, but it was no longer the future. That belonged to hip-hop and pop. Interscope Records. And Universal.

If ever there was a record label built for economic success in 1998, it was the Universal Music Group. Bronfman's wheeling and dealing put him in control of some of the most storied record labels of all time-A&M, PolyGram, Island, Geffen, Interscope, and Motown, to name a few-stocked with modern hit makers from U2 to Dr. Dre and a catalog including Bob Marley, Nirvana, the Supremes, the Who, and Hank Williams Sr. He also had two of the top music executives. "These are record men like the old days," former RCA president Bob Buziak says. "Doug Morris and Jimmy Iovine, you could say, are the Jerry Mosses and Ahmet Erteguns." In other words, nothing could go wrong at the Universal Music Group, as long as CDs kept selling. And what could possibly stop them?

Big Music's Big Mistakes, Part 2Independent Radio PromotionThe 1960 payola scandal that wrecked pioneering rock 'n' roll DJ Alan Freed's career-he and seven others were indicted for bribery, and he died five years later-was hardly the end of payola. Federal laws regarding this kind of bribery were weak and almost impossible to enforce, and in 1979, the Federal Communications Commission watered them down even more, decreeing that "social exchanges between friends are not payola." So record companies kept doing it-spending more and more money every year.The indie promo racket attracted very questionable characters to the music business, which had never exactly had a squeaky clean reputation. One was Fred DiSipio, a skinny, 5'7" Philadelphian with a high-pitched voice and a gigantic bodyguard known as Big Mike. n.o.body n.o.body crossed DiSipio and Big Mike. DiSipio had been a war hero on the USS crossed DiSipio and Big Mike. DiSipio had been a war hero on the USS Gambier Bay Gambier Bay during World War II, and he started his career managing singers like future talk show host Mike Douglas and crooner Al Martino. during World War II, and he started his career managing singers like future talk show host Mike Douglas and crooner Al Martino.In the 1980s, DiSipio was a key figure in what record label types called "the Network," a loose affiliation of indie radio promoters who took payments of $60 million to $80 million a year from major labels and used them to lean on radio program directors. In this way, hits were made. But it was an expensive way-according to Fredric Dannen's investigative cla.s.sic Hit Men, Hit Men, the record industry spent more than 30 percent of its pretax profits on independent radio promotion. the record industry spent more than 30 percent of its pretax profits on independent radio promotion.Hit Men opens with a 1980 experiment by d.i.c.k Asher, then CBS Records's deputy president. Asher was an ex-Marine. He was practical. He liked balanced budgets. He had been head of CBS's international division for years, signing smash artists such as Julio Iglesias. The company's top executives brought him over to cut costs. And he couldn't help but notice the annual millions in the indie promo column. Asher chose one of the biggest rock bands in the world, Pink Floyd, as an unwitting guinea pig. Asher decided not to pay the Network to push Pink Floyd's sure-thing single, "Another Brick in the Wall, Part Two." It wouldn't matter, he figured. opens with a 1980 experiment by d.i.c.k Asher, then CBS Records's deputy president. Asher was an ex-Marine. He was practical. He liked balanced budgets. He had been head of CBS's international division for years, signing smash artists such as Julio Iglesias. The company's top executives brought him over to cut costs. And he couldn't help but notice the annual millions in the indie promo column. Asher chose one of the biggest rock bands in the world, Pink Floyd, as an unwitting guinea pig. Asher decided not to pay the Network to push Pink Floyd's sure-thing single, "Another Brick in the Wall, Part Two." It wouldn't matter, he figured. The Wall The Wall was huge, even without radio play, and Pink Floyd's concert tour was setting sales records. But guess what? n.o.body played the song. Eventually Pink Floyd's manager contacted Asher and begged for mercy. A moral crusade was well and good, but was huge, even without radio play, and Pink Floyd's concert tour was setting sales records. But guess what? n.o.body played the song. Eventually Pink Floyd's manager contacted Asher and begged for mercy. A moral crusade was well and good, but where was the radio hit? where was the radio hit? Asher backed down. Floyd got its smash single. Asher backed down. Floyd got its smash single.For this and other crusades, Asher walked into a feud with his boss, Walter Yetnikoff, who knew many of the promo men personally and looked the other way at the gigantic budget items. Tension between the two stubborn men blew up into profanity-laced shouting matches at the CBS offices and soon led to Asher's downfall. Yetnikoff fired him in 1983. "I wasn't a whistleblower. I wasn't," says Asher, a retired music business consultant who lives in Boca Raton, Florida. "I reached a point where I didn't want CBS involved in something. If any part of CBS were caught in any illegal activity, the government could pull their licenses."On February 24, 1986, DiSipio showed up on television-for the wrong reasons. For months, NBC Nightly News NBC Nightly News had been investigating independent radio promotion and its alleged ties to the Mafia. A month earlier, reporter Brian Ross had been the beneficiary of one of the more remarkable coincidences in TV journalism history. Ross was sitting in the lobby of New York's Helmsley Hotel, waiting to interview a source, when Mafia figures John Gotti, Joseph N. Gallo, and Frank DeCicco suddenly appeared before him, bodyguards in tow, and took the elevator to a penthouse room. Following not far behind were two of the biggest members of the Network-Joe Isgro (the West Coast man) and Fred DiSipio (East Coast). Ross frantically called his producer, Ira Silverman, and they managed to snag the live footage of Isgro, DiSipio, and the Mob figures coming back out of the hotel. It would dominate the network's report a month later. had been investigating independent radio promotion and its alleged ties to the Mafia. A month earlier, reporter Brian Ross had been the beneficiary of one of the more remarkable coincidences in TV journalism history. Ross was sitting in the lobby of New York's Helmsley Hotel, waiting to interview a source, when Mafia figures John Gotti, Joseph N. Gallo, and Frank DeCicco suddenly appeared before him, bodyguards in tow, and took the elevator to a penthouse room. Following not far behind were two of the biggest members of the Network-Joe Isgro (the West Coast man) and Fred DiSipio (East Coast). Ross frantically called his producer, Ira Silverman, and they managed to snag the live footage of Isgro, DiSipio, and the Mob figures coming back out of the hotel. It would dominate the network's report a month later.Predictably, NBC Nightly News NBC Nightly News's "The New Payola" freaked out the industry. It became an albatross, something record executives had to answer for at shareholder meetings. When the story broke, label executives said they were shocked-shocked-that people would believe such a thing went on in their companies. Privately, many of these executives were psyched. They suddenly had a moral and legal reason to kill their outlandish budget items for indie promo. Yetnikoff, who had helped squash an internal Recording Industry a.s.sociation of America investigation on the same subject, defended indie promotion in several interviews. He thought the whole business was funny and arranged to have the theme from The G.o.dfather The G.o.dfather playing at a CBS function. "I'm not saying no indie [radio promoter] ever did anything wrong, but there's nothing inherently bad about trying to playing at a CBS function. "I'm not saying no indie [radio promoter] ever did anything wrong, but there's nothing inherently bad about trying to influence influence, is there?" Yetnikoff told Esquire Esquire in an extraordinary article in which he slams c.o.c.ktails at a nightclub with Mick Jagger and the Eurythmics' Dave Stewart. Payola ended in a cl.u.s.ter of late-1980s grand jury and Senate hearings, some led by Al Gore. As always, though, pay-to-play bounced back. Only the names changed. in an extraordinary article in which he slams c.o.c.ktails at a nightclub with Mick Jagger and the Eurythmics' Dave Stewart. Payola ended in a cl.u.s.ter of late-1980s grand jury and Senate hearings, some led by Al Gore. As always, though, pay-to-play bounced back. Only the names changed.*Born and raised in Cincinnati, Bill Scull had answered a newspaper ad in 1970 for a job involving records. He thought it meant financial records. But the job was with an independent record distributor, one of those guys who bought crates of vinyl records from labels like Columbia and Epic and sold them to music stores. Every city had an indie distributor at the time-big ones like Cleveland and Chicago had two. Una.s.suming, of medium height, sporting square gla.s.ses and slicked-back hair, Scull turned out to be good at shaking hands, making connections, and turning business contacts into lifelong friends. "He's always doing promotion, no matter what it is," says Craig Diable, who worked Warner Music radio promo in the Midwest for years. "If he meets the chef of a restaurant, the next thing you know, Billy's like, 'You need tickets? You need CDs? Let me know.' The guy says, 'You don't call for reservations-you call me me.' And this guy's got him all set up. That's what Billy does."Scull's next job was at a small label, Metromedia. A colleague quit and Scull wound up