Rocking and Reeling : Quogue Ventures of Van Nuys Struggling to Find a New Star to Help Reverse Its Faltering Fortunes

Rick Springfield didn’t become a pop singer and soap opera superstar by accident. His career was carefully orchestrated for many years by Carman Productions, a Van Nuys management company that helped him get to the top of the charts and turned him into a sex symbol who could jumpstart the hormones of any prepubescent girl.

Carman Productions, which also operates a Van Nuys recording studio called Sound City, helped Springfield land a starring role on “General Hospital.” He was on the television soap for several years but has moved on. The company also produced his four platinum rock records and Springfield’s teeny-bopper film effort, “Hard to Hold.”

Carman Productions and Springfield linked up in 1975 and, with Springfield’s success in the early 1980s, it meant the company’s ship also had come in.

But it didn’t stay long. At the peak of his success in 1983, Springfield dumped Carman Productions for another management firm. Much like any company that relies heavily on one product--in this case Springfield--Carman Productions left itself open to a sudden reversal of fortunes.

Five years later, its top two executives, Tommy Skeeter and Jonas (Joe) Gottfried are still looking for another gold mine like Springfield.

Turned to the Public

To keep the search alive, they hope to turn to the public for financing. About a year ago Carman and its recording studio took control of a company called Quogue Ventures, a Quogue, N.Y., operation that was started as a blind pool in May, 1986. In a blind pool investors put up their money without any assurance of how their money will be invested. Some $100,000 was raised and Quogue’s prior management set up various medical clinics in Mexico, but the idea fizzled. Last March Carman took control of Quogue in a stock swap and merged into Quogue.

When Quogue went public, it issued to investors warrants that entitled them to buy additional stock at a certain price. Skeeter, president of Quogue, and Gottfried, vice president, are now rewriting the terms under which those holders can exercise their warrants in an effort to raise an additional $3.5 million.

Skeeter and Gottfried say they plan to pay off loans, buy some new recording equipment and raise their salaries to $125,000 each if they come up with the $3.5 million. But if the offering does go through, it will require a great deal of faith on the part of investors.

In documents Quogue has filed with the Securities and Exchange Commission, the company says it currently has nine artists signed to a record contract or under personal management, but it does not reveal who they are.

The filing also said that Quogue is offering new artists a $25,000 advance to sign a contract, a figure industry executives say is on the low side. “The average is anywhere from $50,000 to $150,000,” said Tom Zutaut, an executive with Geffen Records. If so, new artists would have less incentive to sign with Quogue than a rival firm.

As of Dec. 31, Quogue also did not have a distribution agreement with any of the six major recording companies and Quogue said “no assurance can be given that such an agreement will be consummated,” according to those documents filed with the SEC.

“It does no good to sign artists unless you have a distribution arm or a contract with another record company to distribute,” said Jay Cooper, a Beverly Hills entertainment attorney who helped negotiate Springfield’s movie deal. “For me, that would be a problem. Distribution agreements are not easy to come by.”

Quogue also has financial problems. For the three months ended Dec. 31, the company lost $84,000 on meager sales of $89,000. Its liabilities also exceeded its assets by more than $1.1 million. “The company may be unable to continue in existence,” Quogue said in an SEC filing.

For potential investors, there seems little chance of getting a big return. Quogue has an enormous amount of stock outstanding already, some 1.1 billion shares. By comparison, General Motors has 311 million shares of stock in the public’s hands.

Not surprisingly, Quogue’s stock isn’t worth much. A recent bid was for a half a cent a share. Skeeter and Gottfried own 76% of the stock.

Record industry executives say the odds of Quogue finding another hit act aren’t great. “The chances are very small because of the numbers in this business,” Cooper said. “You have hundreds and thousands of acts looking for deals. How many Bruce Springsteens or Michael Jacksons come out of that? Very few. The odds are against them.”

The Record Industry Assn. estimates that only 15% of records recover their costs or make a profit. John Kalodner, an executive at Geffen Records, said there are hundreds of management and production companies like Quogue. “Would I consider investing in them? Probably not,” he said.

Skeeter and Gottfried declined several interview requests.

According to SEC filings, Gottfried, 58, got his start as an Army vocalist and later was a soloist with bandleader Fred Waring.

Started in 1958

Gottfried went into personal management in 1958 and he claims to have brought together Mick Fleetwood, Lindsey Buckingham and Stevie Nicks to form the rock group Fleetwood Mac. He has been president of Sound City since 1969, a recording studio used by many artists including Michael Jackson, Diana Ross and Elton John.

Little personal information is revealed about Skeeter, 55, other than he became president of Carman in 1970.

Carman Productions has never recovered from Springfield’s withdrawal. The company filed a lawsuit in Superior Court against Springfield that finally was settled out of court. In court papers, the company claimed its “entire business standing and momentum of Carman will . . . be irreparably damaged” by his departure, which also would “adversely affect the influx of new creative artists,” the lawsuit said.

Springfield refused to comment.

“When Rick left, things obviously changed and since then Joe has been looking for that certain artist or group to mirror that success,” said Nick Gilder, a former Quogue client and singer of “Hot Child in the City” and other 1970s disco hits. Gilder dropped Carman Productions as his manager about 18 months ago, even though he said Carman did a fine job managing his career overall. But Gilder, whose career has been lagging, said he wanted to write more songs and didn’t need a manager to do that.

In spite of all of its problems, there is the slight chance that Sound City, a highly respected master recording studio, could be Quogue’s ticket to success. “There is a lot of downtime in studios,” Kalodner said. “They can give that downtime to bands that are doing demos and maybe they’ll come across a band that I would miss. It’s very possible.”

Because of the nature of the entertainment industry, there is always the chance, however small, that Gottfried and Skeeter could find another golden prospect.

“This is not a widget business. You could have sold a million records last year of one artist, and only sell three records this year. Or you could have only sold three records last year and sell 1 million this year. It’s something of a lottery,” Cooper said.

CAPTION FOR QUOGUE COMBO