MCA Layoffs--First Cut the Deepest?

What a difference six months make.

Last May, MCA Records chairman Irving Azoff announced the launching of Uni Records by saying MCA could speed its growth and up its share of the pop market by having two labels instead of one. Based in New York, Uni had its own A&R;, promotion and artist development staff, headed by David Simone, a hot young British record exec.

“When times are good,” Azoff told the Times, “everyone wants to take another swing at bat.” But after MCA’s much-publicized series of cutbacks Nov. 18, Simone is the only top Uni staffer left with a bat in his hands.

Most of his New York staff was fired, as were most of the staffers at MCA’s jazz and classical departments, as well as several members of MCA’s A&R; department. MCA also dissolved Unicity, its publishing firm, merging it into MCA Music, the company’s other publishing firm. It’s estimated that MCA released nearly 45 staffers overall.

In an interview last week, Azoff insisted the sweeping cuts weren’t prompted by financial losses. “To the contrary, the record company is very healthy financially,” he said. “But if you’re going to allow a tree to grow, you have to prune it sometimes.”

Just how healthy is MCA Records? Azoff insists the company will make about $30 million this year. But the company’s accounting procedures, which lump record label profits in with home video, management and Amphitheatre operation revenues, make it impossible to divine the label’s exact profits. “MCA has had some big hits lately with Tiffany and Jody Watley,” said a longtime industry observer. “But the record division’s overhead is enormous. They pay big salaries, carry a big staff and have signed lots of bands which didn’t make it. Given those economics, it’s hard to imagine how the record company itself could be more than marginally profitable.”

Industry observers, however, questioned the timing of the cutbacks. Why would MCA launch Uni with considerable expense and hoopla--and then merge it back into MCA barely six months later? Was the move a signal of new MCA president Al Teller’s consolidation of power at the company? Was it also a sign that Teller, not Azoff, was now calling the shots? Does it mean that Teller, a former top exec at CBS Records, was making room for some of his old CBS loyalists?

“I’m still involved in every decision here,” Azoff said. “But, yes, Al is running the record company. The difference is that we’ve gone from having a passive president (ousted MCA exec Myron Roth, now at CBS Records)--who was not supposed to really operate the company--to Al, who is a hands-on, aggressive guy who is operating the company.”

In fact, while Azoff would not publicly comment on the reports, two top industry sources confirmed that Teller will soon announce the hirings of several new key A&R; execs, artist development staffers and branch managers--all lured away from CBS, where Teller served as president until earlier this year.

While Uni has been merged into MCA, a new company is being created--Universal Records, which will serve as a new C&W; label, run by MCA and Jimmy Bowen, MCA’s longtime Nashville kingpin. Azoff said Universal Records will soon announce three major artist signings--the Judds, the Gatlin Brothers and the Nitty Gritty Dirt Band.

Azoff also confirmed rumors that MCA has been in negotiations with black music mogul Dick Griffey, owner of Solar Records, now distributed by Capitol Records. If the deal were completed, Solar would become part of Motown Records, giving Griffey a piece of the legendary black music company while giving Motown several proven Solar hit makers and access to the hot production team of L.A. Reid and Babyface. (Al Teller did not return numerous phone calls.)