Capitol, Isgro Reportedly Settle Lawsuit

A year after filing a $25-million antitrust lawsuit against most of the major U.S. record companies, Los Angeles-based independent record promoter Joe Isgro has reached an out-of-court settlement with one of the firms, Capitol Industries-EMI Inc., industry sources said Tuesday.

The settlement was reached last Friday, sources said, but no details have been revealed. Both Isgro and Capitol have declined comment, refusing even to confirm that a settlement has been reached.

Isgro filed the suit in April, 1986, shortly after all the major record labels announced that they were suspending use of independent promotion, a means of increasing air play for their record releases. The record companies’ decision came on the heels of news reports that a number of prominent promoters--including Isgro--were under federal investigation for suspected payola practices and ties to New York organized crime figures.

Isgro claims in his suit that record companies actually conspired to put the major independent promoters out of business in order to drive down the rising cost of promotion, which reportedly was costing the industry more than $50 million a year at the time. In addition to Capitol, the suit names Warner Communications, RCA-Ariola Records, Polygram Records, MCA Records and A&M; Records and the Recording Industry Assn. of America, a trade group. The only major company not named is CBS Records.

MCA Won’t Settle

Spokesmen for a number of record companies either declined comment or failed to return a reporter’s calls Tuesday. However, Bill Billick, an outside attorney for MCA, said his client has no intention of settling with Isgro. “We feel very strongly about it; we’re offended that we were sued and we think we’ve done nothing wrong,” he said.

According to Billick, the “portrayal” of Isgro in last year’s news reports as having organized crime ties “was a galvanizing factor” in MCA’s decision to stop using independent promotion. “As far as I know, those news reports still stand, nothing has been retracted,” he said.

Isgro has denied having any business dealings with organized crime figures, although he has admitted knowing several reputed mobsters socially. He also has acknowledged that he apparently is among the subjects of a Los Angeles federal grand jury investigation into suspected payola practices. He has denied engaging in those practices, however.