A Grand Tour of L.A.’s Kingdom of Rock

JOE SMITH, ONE OF THE key players in the Los Angeles rock kingdom for almost three decades, smiles sheepishly as he sits in his 13th-floor office in the Capitol Tower in Hollywood and lets his visitor in on a secret.

Brought in earlier this year by Capitol-EMI Industries to help rejuvenate its sluggish record division, Smith toyed briefly, he confides, with the idea of moving the Capitol staff out of the Tower. That’s sacrilege akin to the motion picture business taking the projectors out of Mann’s Chinese Theatre.

The Tower, a high-rise landmark designed to resemble a stack of record albums, was opened in 1956--well before there was much of a record business in town.

“The fact is this building doesn’t work well,” Smith explains. “A record company should be more horizontal than vertical, so that a promotion man can run from desk to desk to spread the good news when a major radio station adds one of our records. Here, he’s got to wait for an elevator.”

But Smith decided to stick with the Tower and history.

“This building isn’t just a symbol of Capitol Records, it is a symbol of the record business in Los Angeles, because at one time Capitol was the only major record company here,” says Smith, whose title is president and chief executive. “The rest of the empire was in New York--and I’m not just talking about the 1940s; I’m talking about 1960, when I came out here.

“There were a few other (record) companies by then, but not enough for anyone to think of Los Angeles as anything more than a little outpost. My friends couldn’t believe it when I told them I was moving here. They thought of Los Angeles as a place where everyone spent all their time at the beach. They said, ‘The sun will bake your brain.’ ”

SMITH, A TOP EXECUTIVE AT Warner Bros. Records and Elektra Records before joining Capitol, is writing a history of the record business--from the Big Band era through Michael Jackson and Bruce Springsteen. But Smith, who got his start in the music business as a disc jockey in Boston, doesn’t need to interview anyone to tell the story of the record business’s remarkable growth in Los Angeles. He was one of a small army of East Coast transplants (including A & M Records co-founder Jerry Moss) who in the early ‘60s saw Los Angeles as the future.

“I had come out here on business a few times, and I loved what I saw,” Smith recalls. “New York was beginning to be a hostile place, and this seemed like the promised land. We all realized that the (future of the) record business was out here. You could not miss. The climate was here, the motion picture industry was here and the musicians would eventually be here.”

Smith and the other pioneers didn’t have to wait long. The West Coast’s bid for success began with infectious hits by the Beach Boys and Jan and Dean that spread the word about the sun-drenched advantages of the Southern California life style. Not only did some New York executives, soured on the increasing malaise of life in Manhattan, head west, but aspiring musicians also sensed a more creative environment.

And sure enough, artistic explosions followed in Los Angeles (the Byrds, the Mamas and the Papas, the Doors)--and, on a somewhat smaller scale, in San Francisco (Janis Joplin, Jefferson Airplane, the Grateful Dead).

The ease of the shift of power from New York to Los Angeles “was almost embarrassing,” Smith says. “By the ‘60s, we had won it. By the ‘70s, it was no contest. There were the Eagles, Jackson Browne, Linda Ronstadt--the whole Southern California sound. There was also Fleetwood Mac. Neil Diamond had moved out here, Streisand, Elton John, Dylan. It looked like it would never end. It was Camelot for a while.”

Smith relished the competition between New York and Los Angeles in those days. “The funny thing is the people in New York used to get crazed about us. They always saw pictures in the trade papers of (Warner Bros.’) Mo Ostin or (Asylum’s) David Geffen in a sport shirt with an artist, and they’d think, ‘Those guys are too much into having a good time. We’ll outwork them.’

“So the lights would burn at 10 o’clock at night in New York-- especially at CBS--while they all thought we were at the beach or something. But we jammed it in their face all the time. We had as many records on the chart no matter how late they worked. Hours weren’t the issue. This was where the talent was and where the power was.”

By 1978, the industry was selling $4.1 billion in records, thanks in great part to the L.A. boom. Nobody questioned the kingdom’s supremacy. But Camelot soon lost its luster.

LOS ANGELES’ ROCK KINGDOM was under siege between 1979 and 1982. Retail sales of records in the United States fell by 18%. Teens and preteens started spending their money on video games rather than on records. Firings were commonplace throughout the industry. Companies stopped dangling big advances in front of new bands. Some stopped signing new bands altogether. Clubs closed.

The Los Angeles record scene was hit especially hard because it had been riding so high. It was a disillusioning time. Smith eventually dropped out of the record business for four years.

Recalling those years, Freddy DeMann, who manages Madonna, says: “I remember going to restaurants around town and no one was there. All the people on expense accounts suddenly had no more expense accounts. It was like the stock market crash or something. Everyone thought this was the end.”

The kingdom began to recover in 1983. The lure of video games had worn off. MTV, with its 24-hour parade of stars, caused young fans to be excited about rock ‘n’ roll again by introducing a new generation of colorful performers such as Boy George and Duran Duran. The improved sound of compact discs would eventually bring older fans back into the marketplace.

The record industry is now too fragmented for just one city to rule; these days, Los Angeles and New York share the power. Los Angeles is home for Warner Bros., A & M, MCA, Capitol, Motown and the recently launched Virgin Records America. New York claims CBS, Atlantic, Elektra, RCA, PolyGram and Arista.

There is little doubt, however, that Los Angeles is the most active rock market. Southern California fans are believed to have bought up to 10% of the $4.6 billion in records sold last year in the United States and an estimated $100 million in concert tickets and souvenirs.

Most industry people polled here feel that Los Angeles could again pull ahead of New York. One sign is the commitments that two major corporations have made here: Capitol-EMI and MCA Inc.

MCA pledged in 1983 to do whatever was necessary to beef up its limp record division. The company gained instant credibility by hiring Irving Azoff, the controversial powerhouse manager who guided the careers of the Eagles, Boz Scaggs, Stevie Nicks, Dan Fogelberg and Steely Dan. Azoff shook things up right away, raiding other companies for top talent and spending big bucks to attract best-selling artists like Barry Gibb (whose only album for the label, alas, bombed). But MCA eventually did work some miracles: Snagging mega-selling Boston from CBS, scoring big in sound-track LPs and developing an especially strong black-music roster. Azoff also brought an entirely new vision to the record business. Taking advantage of MCA’s multilevel involvement in the entertainment world, Azoff set out to “build a division here where anything to do with music entertainment was fair game.”

As president of the MCA music entertainment group, Azoff now oversees the corporation’s activities in records, music publishing, personal management, merchandising, radio syndication and a chain of amphitheaters. And Azoff thinks Los Angeles is the best place to preside over that world.

“I know when I go to New York it certainly feels like there are a lot fewer players to see than when in L.A. And I think time is on our side,” he says. “As all America has become more diet- and exercise-conscious, a lot of my New York friends end up out here. It’s just a better life here.

“I think we get a lot of respect now, especially from the New York investment community, the brokers--especially after Sony’s attempt to buy CBS Records,” Azoff says. “There is a lot of Wall Street interest when you have companies like CBS and Warners making $150 million to $200 million a year in pretax profits.”

Capitol-EMI also made a renewed commitment to the future of the record industry by bringing Smith back into the business to streamline the company and aggressively aim for a bigger share of the market.

“We’ve regained our confidence,” Smith says of the L.A. record business. “The shift is still coming west. CBS and RCA may not be moving here, but the shift--economically and population-wise--is to the West. And I think musicians would still prefer living here to New York.”

Smith stares out of his office window, looking toward the ocean. “If you were a musician with a guitar on your back in Texas, where would you want to go?”

BUT THIS FAIRY-TALE kingdom can also be a bloody battlefield where one day your phone calls are returned immediately, and one wrong move later, it’s “sorry, he’s in a meeting.”

That’s a fact of life in the volatile record business, where executives, personal managers, attorneys and talent agents are subject to the same dramatic ups and downs as the stars they represent.

You can follow the rise and fall of the stars each week in the sales charts of such publications as Billboard magazine, but the power shifts among others in the empire are far more subtle--sometimes measurable only by such private, agonizing signs as the fact that they can no longer get the best tickets to the hottest shows.

Freddy DeMann experienced some of the knot-in-the-gut anguish of unanswered calls after his most important client, Michael Jackson, left DeMann’s management firm in 1983 at the height of the singer’s success with “Thriller,” the biggest-selling album of all time. DeMann’s firm co-managed the Jacksons with their father, Joe Jackson. Industry sources speculate that Michael felt that it was time to declare his independence from his family and choose his own management team.

With such clients as Madonna, Lionel Richie and Billy Idol, DeMann remains the hottest manager in the kingdom. But the memory of his much-publicized split with Jackson still hurts.

“I was devastated, and I am not embarrassed or ashamed to tell you,” DeMann says, recalling the day Jackson said goodby. “I was walking flat-footed for a month because I thought we had a great relationship, and we did. We still talk. But you couldn’t have more success than we had, and I was crushed (when he left). Although he was a household name as a child, he was ice-cold when we signed him, and here we were in the midst of the biggest-selling album in the history of recorded music.”

But DeMann found that most people were supportive during those traumatic days when he scrabbled to interest the rest of the industry in his new client, a relatively unknown singer who called herself simply Madonna.

About that period, DeMann reflects: “You know the old saying about wanting your friends to fail so that your success could be that much bigger? I’m sure that exists with certain people, but I think by and large we root for each other in the music business-- especially in Los Angeles. There is a sense of community here. Maybe it has to do with the fact that we knew what it was like to build an industry here, see it fall apart--and then build it back.”

Even with the constant power shifts, one thing hasn’t changed: The industry’s inner court (except for the artists) is still almost exclusively white and male, with women mostly relegated to public-relations jobs. An encouraging sign is that executives, perhaps responding to criticism from the National Assn. for the Advancement of Colored People, have begun to consider blacks (though again men ) for important positions instead of segregating them in the black-music departments.

MONEY AND POWER are only part of the kingdom’s lure. In the end, there is no way to underestimate the pleasures of life in Southern California.

DeMann moved here from New York 20 years ago, drawn like many others by the fantasy of life in the land of palm trees and sunshine.

“I love New York,” he emphasizes on a sunny day, sitting in his ninth-floor office on the Sunset Strip. “It is my hometown. For all the 20 years I have been out here, I have said I was going to move back. Only recently have I realized that I don’t want to move back.

“Madonna is another example of what happens,” he continues. “She was a committed New Yorker when we started working together. She would come out here on trips and say, ‘Freddy, how can you live out here? It is so hot, it’ll melt your brain’--that whole rap. Then, she came out again, and after a while she was saying, ‘Well, maybe it isn’t so bad.’ The next thing I knew, she was living here.”