MCA Records Chief Softens Tune : Ex-Rock Star Manager Azoff Seeks to Rebuild Firm

His hair is much shorter, his once-bushy beard is now neatly trimmed and his sweaters, jeans and sneakers of the 1970s have given way to tailored suits and expensive Italian shoes, but some things about former rock star manager Irving Azoff haven’t changed.

Asked recently what he had learned about the record business in the 20 months since he was named president of MCA Records Group, the 36-year-old Azoff didn’t hesitate: “When I was a manager, I used to say that everything at the record companies was screwed up, that the people running them didn’t know what they were doing,” he said. “And a year and a half in this job has proven to me that I was right all along.” Record company executives often are too narrowly focused on short-term goals and profits, and they don’t spend enough time developing talent and planning for the future, he added.

In 10 years of managing the careers of such premiere rock performers as the Eagles, Steely Dan, Boz Scaggs, Jimmy Buffett and Dan Fogelberg, Azoff earned a reputation as something of an enfant terribl e. Combative, abrasive, arrogant, outspoken and often outrageous in the service of his clients, he made quite a few enemies on the other side of the negotiating table.

Consequently, when it was announced in April, 1983, that he was taking the helm of the sixth-largest record distributor in the United States at a salary reported to be about $1 million a year, opinions in the industry were mixed.

Some thought it was a smart move for Los Angeles-based MCA Inc., the entertainment conglomerate (including Universal Studios) that had been struggling for years with a stodgy, also-ran image in the record business and had lost a number of its top-selling artists, notably Neil Diamond, Elton John and the Who. Azoff’s credibility in the artist community would help the company attract some badly needed new talent to its roster, the reasoning went.

Others, however, predicted that Azoff’s style would quickly get him into trouble in the tight-knit corporate atmosphere of MCA Inc. Rumors to that effect have been swirling around the record business since his first week on the job: He’s spending too much money hiring new executives and signing new artists; his records aren’t selling as well as hoped; (MCA Chairman) Lew Wasserman and (MCA President) Sid Sheinberg are unhappy with his performance and are about to fire him, he’s mad at both of them and is about to resign.

In a telephone interview, Sheinberg applauded Azoff’s performance: “I think that Irving and his staff have done an incredible job. . . . Irving’s performance has moved the record group at a faster pace than I would have considered possible and I’m thrilled with the way things are going.”

For his part, Azoff shrugs off rumors of his imminent departure. During a recent interview in his office, he rattled off a litany of “rebuilding” moves that he says have turned MCA Records into a respected competitor after years of being considered “that joke of a record company in the Valley that (artists) shouldn’t sign with.”

“I feel that we’re over the hump,” Azoff said. “I don’t have the anxiety that I did in the beginning. My first six months here were spent kicking myself and saying I never would have done this if I had known it was this bad. As bad as I thought it was beforehand, I had no idea.”

Rebuilding a record company is “a three- to five-year cycle,” he said. “We’re just in year two, but considering the turnaround we’ve had, I think we deserve our star now.”

Chief among the rebuilding moves are the agreements Azoff negotiated for MCA to distribute Motown Records in the United States and for MCA’s product to be distributed overseas by W.E.A. International, the foreign distribution arm of Warner Communications Inc.’s record operations.

The two agreements have substantially strengthened MCA’s position in the worldwide marketplace, especially since Motown had a very good year, with multimillion-selling albums from Lionel Richie and Stevie Wonder and the sound track from the movie “The Big Chill.”

Azoff said he also has presided over a staff change in which about 90% of the managers were replaced amid an equally drastic turnover of MCA’s artist roster. At one point, he cut the roster of pop artists from 34 to seven (it’s now back up to 46). In terms of big-selling artists: “All I inherited from my predecessors was Olivia Newton-John, the Oak Ridge Boys and Tom Petty, and I’ve yet to get an album from Olivia or Petty,” he said, adding that he expects to release albums by the two artists “this quarter.”

This week, MCA has 17 albums on Billboard magazine’s chart of top-selling LPs and tapes, ranking the company No. 3 behind much larger Warner Bros. and CBS Records. Fifteen of those albums are by artists signed during Azoff’s tenure.

Azoff acknowledges that the artist and executive changeovers have been expensive. “We were forced to be aggressive,” he said. “We had to rebuild this company the way George Allen used to put together football teams. We were forced to beg, borrow and steal because we had nothing to release, an empty schedule. When I first came here we went for two and a half months without releasing a record.”

Biggest Disappointments

MCA’s biggest disappointments in the past year involved the signing of Barry Gibb of Bee Gees fame and Joan Jett, whose initial albums on the label fell far short of expectations. “You can’t be right all the time but, on the other hand, we also signed Night Ranger and New Edition,” Azoff said, referring to new artists whose debut MCA albums have sold more than 1 million copies each.

But he said that signing such established artists as Gibb and Jett provided a psychological lift for MCA Records. “We had to prove to the industry that we were willing to step up and be competitive.”

MCA’s records and music publishing operations reported a loss of nearly $8 million in 1983. (The company does not break out the results of its records unit separately.) Azoff said he expects the company’s 1984 financial statement to show a “significant turnaround,” but he declined to be more specific.

For the first nine months of 1984, MCA Inc. reported profits of more than $5 million on its records and music publishing operations, compared to a loss of nearly $9 million for the same period in 1983. “Ostensibly, had we not made the Motown and W.E.A. deals this company could have lost $25 million (in 1984).”

Referring to “my past abrasive style,” Azoff acknowledged that “there are little subtleties I’ve had to change. In the management business you should get a Screen Actors Guild card because you’re an actor, acting out for your clients and the people you represent your clients to,” he said. “The way I used to operate was, ‘Here’s a line; everyone on this side I’ll kill for and everyone on the other side is the enemy.’ And that was an act that worked.

“But when you go from administrating a staff of 16 to a staff of 600, there are changes. There’s been a natural evolution. I’ve toned down somewhat, in part because the nature of my daily activity doesn’t lead to as many confrontations. The nature of management draws you into the trap of more confrontations than the record business.

“This is a tough business to make money in, but the root of the problem is not that artists get too much royalty, because they don’t,” he said. Chief among the problems is the high cost of marketing, particularly the hiring of independent promoters to help get records played on radio stations.

“The real problem with the record business is that a gold record (sales of 500,000 copies) doesn’t necessarily mean the record was profitable.”

Another thing that Azoff finds troubling about the record industry is the recent pattern of consolidation that has reduced the number of major U.S. distributors to six. “I don’t like it at all,” he said. “When I started in the business there were 20 companies. It’s very scary.