Nobody’s Laughing at Tommy Motolla Anymore : His boss gambled, the gossips whispered but two years later, CBS’ president has pulled the troubled company out of its 1988 tailspin

First time around with CBS Records, Tommy Motolla failed.

Twenty-two years ago this month, when Motolla was a 19-year-old singer filled with dreams of being the next Elvis Presley, he recorded a single for CBS’ Epic label titled “Woman Without Love.” The ballad was released under the name T.D. Valentine because Motolla was considered “too ethnic” at the time. It flopped and Motolla soon gave up singing to enter the business side of the rock world.

In April of 1988, Motolla returned to CBS Records as the president of its domestic division--and many predicted another failure.

CBS Records was the dominant power in the pop world from the mid-’60s through the mid-’80s--the home of such critical and commercial superstars as Michael Jackson, Bruce Springsteen, Barbra Streisand, Bob Dylan, Neil Diamond, Luther Vandross and Billy Joel.

But the company went into a much-publicized tailspin in 1988, when it was badly outperformed by the arch-rival Warner Music Group (which includes the Warner, Elektra, Atlantic family of labels). Much of the industry scoffed when Walter Yetnikoff, the outspoken head of CBS Records Inc., tabbed Motolla to help rejuvenate the ailing company.

After giving up on his singing career, Motolla had worked his way through various industry jobs, including song publishing and eventually built one of the nation’s most powerful management companies.

Representing clients such as Hall & Oates, John Cougar Mellencamp and Carly Simon, Motolla was well connected in the record business. He dealt with promotion, marketing and talent-developing departments at all the key labels.

Still, many pop observers wondered if it wasn’t another connection that led to the CBS job--his longstanding friendship with Yetnikoff.

“There was tons of whispering, and it hurt, especially when we bottomed out a few months after I arrived,” Motolla said recently. “It looked like Yetnikoff had made a grave mistake by not picking someone with more actual record company experience. People thought he had put friendship over business judgment.”

Motolla, with Yetnikoff’s blessing, ruffled some feathers at rival labels by luring away two highly respected executives--Don Ienner, from Arista Records, and David Glew, from Atlantic Records--to head up CBS’ Columbia and Epic labels, respectively. Another key addition: new executive vice president Mel Ilberman, from PolyGram Records.

Those raids sent signals that Yetnikoff--who had been awarded a $20-million, multi-year contract after the Sony Corp. bought the CBS Records Group from CBS Inc. for $2 billion in 1987--wasn’t resting on his laurels. The new team was playing hardball.

With Ienner, Glew and other members of his new team, Motolla set about to “retune” the CBS Records operation. Relying chiefly on the existing CBS talent roster, Motolla and the others put together marketing and promotion campaigns, focusing on artists whose potential they felt hadn’t yet been tapped.

The results have turned the image of CBS Records from cold to hot. Even without any new albums from such CBS blockbusters as Bruce Springsteen, Michael Jackson and George Michael, CBS Records is wrapping up what is expected to be its biggest year. (CBS Records Inc. consists of Motolla’s domestic division, an international division and the CBS record club.)

According to one estimate from a source at the company, CBS Records will make a profit of about $450 million on total sales of around $3.1 billion in the fiscal year ending March 31. Those figures are up from the previous fiscal year, which reported $350 million in profits on total sales of around $2.7 billion.

Though CBS doesn’t break down the figures by division, the bulk of the ‘89-’90 increase is believed to be due to the performance of Motolla’s domestic record company. The Warner Music Group just reported a 1989 profit of $500 million on worldwide recording and publishing revenue of $2.5 billion.

The CBS success was based in part on the strong sales of such veterans as the Rolling Stones and Billy Joel, but rests primarily on the commercial punch of such Top 20 newcomers as New Kids on the Block, Warrant, Living Colour, Babyface, Basia, Britny Fox, Bad English, Surface, Michael Bolton, Martika, the Indigo Girls and Harry Connick Jr.

Some industry observers question whether many of the hot new CBS acts, such as teen idols New Kids on the Block, have the artistry to contribute to the long-range impact of CBS Records. Others also question whether it’s too early to give a verdict on Motolla. They suggest he is still in the “honeymoon stage” in what has proved to be a difficult post.

“The record business, by its nature, is cyclical and CBS, with its huge roster, epitomizes that process,” one observer said. “The tendency is to have great spurts and then dry spells--which is what has happened to CBS in recent years. The question is, ‘Is Motolla just benefiting from one of those spurts?’ ”

Al Teller, who was Motolla’s predecessor at CBS and is now chairman of the MCA Music Entertainment Group, warns against hasty judgments.

“CBS Records has never been a one person show--it never has been, isn’t now and can never be. It’s a company with incredible depth, both on its artist roster and on its management team,” he said.

“I am not at all surprised that CBS records is doing terrifically well because there was a great artist roster in place when I left the company.”

Whatever the nuances, however, no one denies that CBS has renewed energy and spirit.

“One of the problems at CBS was they went through a period where they didn’t seem able to break new acts--and that’s the lifeblood of the record business,” said Los Angeles attorney John Branca, who represents Michael Jackson and the Rolling Stones.

“But (Columbia and Epic) are now perceived to be hot labels with talented executives. When a manager or a lawyer brings new acts to the label, there is some confidence that Don Ienner and Dave Glew can follow through when they say they’ll do their best to break your act.”

Asked about the skepticism surrounding his 1988 appointment of Motolla, Yetnikoff says, “It was a gamble, sure . . . but isn’t that what I get paid to do . . . to make judgment calls? I knew Tommy was very bright and very aggressive and that we could communicate.

“I didn’t care about all the snide remarks--’Walter has gone too far this time. . . . He’s brought in his friend who is only a manager . . . ha ha ha.’ Well, I don’t think they are laughing anymore. It’s now time for me and Tommy to laugh.”

Record industry trivia question: Who’s the only record company president who is mentioned in the lyrics of a song?

The answer: Tommy Motolla.

He’s a central character in “Cherchez La Femme,” a contemporary sort of Damon Runyon tale that appeared on the critically admired 1976 debut album by Dr. Buzzard’s Original Savannah Band.

Motolla was managing the band at the time, and it tells a lot about his playful nature that he would allow his name to be used in the song about a guy caught up in a crazy romance, working at two Eighth Avenue bars to keep his flighty girlfriend happy.

(For the record, Motolla is also mentioned in a second song: Hall & Oates’ “Little Gino the Manager.”)

Motolla, who is married and has two pre-teen children, lives in New York, but spends about a week a month in Los Angeles, where CBS Records has a satellite office in Century City.

Equally comfortable in stylish suits and jeans, he moves easily in conversation between discussing industry strategy and laughing at some of his early career misfortunes (including the failed Epic recording stint).

That energy and enthusiasm were cited by several CBS employees who were interviewed about the differences at the company since Motolla arrived.

“I think the morale was very low before the change,” said one longtime East Coast employee. “It was the cumulative effect of the final years of old CBS Inc. rule, combined with an uncertainty over what was going to happen with the Sony deal and the fact that the company was perceived as having a lot of problems . . . of not being able to deliver on new acts.

A Bronx native, Motolla grew up in suburban New Rochelle, one of four children in a middle-class family that loved music. His cousin, Tony Motolla, is a highly admired jazz guitarist.

Young Motolla’s music tastes ranged from the funky sound of James Brown to the soulful doo-wop recordings of Dion DiMucci, but his first hero was Elvis Presley.

“Elvis was a gigantic influence,” Motolla said, during an interview at a Beverly Hills hotel, where he normally stays when in Los Angeles. “I remember coming home from Catholic school when I was 8, taking off my uniform and putting on jeans and a leather jacket so that I would look like Elvis. I even drew sideburns on my face with my sister’s eyebrow pencil. I sang ‘Blue Suede Shoes’ and ‘Hound Dog’ in our 3rd-grade play.”

During and after high school, Motolla was in and out of several rock bands in the New York area. He also studied acting, but he said goodby to his dreams of being a performer shortly after the Epic Records experience.

“I was an ambitious kid and I would set these goals for myself,” Motolla recalled. “At 21, I wanted to be doing this . . . at 25 that and so forth. And I could see that I wasn’t getting anywhere in my acting or singing, so I wanted to find another area . . . a place where I could make a name for myself.”

Motolla spent a few months working with his father, a customs broker, but he was frustrated. He decided to try the business side of the music world. It was a way, he said, to live vicariously through the artists and songwriters that he would work with. Motolla’s first job was in music publishing and he loved it. “I took it on with a vengeance,” Motolla said of the early years. “I was young, hungry, aggressive. . . . I was possessed.”

He spent six years in the early ‘70s with Chappell Music, where he worked so closely with the new singing-writing team of Hall & Oates that he began managing the duo shortly after the 1976 success of “Sara Smile.” Over the next 10 years, Hall & Oates had a phenomenal run of 14 Top 10 hits, including “Rich Girl,” “Kiss on My List” and “I Can’t Go for That.”

Motolla’s firm, Champion Entertainment, grew along with Hall & Oates. Along the way, he thought about someday running a record company. Still, it was a surprise two years ago when Yetnikoff asked him to join him at CBS.

“I had known Walter for the last 15, 16 years and we would often talk about what was happening at CBS,” Motolla said. “We used to talk about the company, the need to make it a more promotion-driven and artist-oriented company.

“But he had been caught in this terrible bureaucratic fight with CBS Inc. and that didn’t really allow him the time or resources to focus on problems that were brewing in the company. When the deal with Sony finally happened, I think he had the latitude to do what he wanted and that’s when he asked me about coming here.”

The early months at CBS were not comfortable for Motolla.

“Like everybody else, I was aware before I came here that CBS was cold--but I wasn’t aware of how much drastically colder it was going to get,” he said. “Things were so bad that virtually no one wanted to do business with CBS anymore. It had gotten to the point where the lawyers, producers and managers in this town didn’t even consider us as a contender when a hot new band came along.”

Among the immediate goals: naming some respected industry figures to head CBS’ Columbia and Epic labels so that the labels could better compete against the superstar lineup of executives at Warner’s cadre of labels: Warner Bros., Atlantic, Geffen, Elektra and Sire.

“We had to bring in people to give Columbia and Epic strong identities. Otherwise, how can you compete with the Warner guys? We were like coming at them with pea shooters and they were coming at us with cannons.”

Yetnikoff said he thought about trying to hire Motolla before 1988, but he felt unable to hire either Motolla or other potential executives because of financial restrictions set, he said, by CBS Inc., the company’s previous owners.

“I was hamstrung,” Yetnikoff said. “They just wouldn’t OK the money needed to bring in the people we needed. The result was this company was old and stodgy. It was beginning to wind down. I saw we were not developing the new artists that we needed.

“I said this to the (old CBS Inc. board), ‘If you don’t stop this, this company is going to wind down in two years and you are going to have nothing.’ They thought I was posturing to get them to sell (to Sony), but I was telling them the truth.

“I think Tommy may be exaggerating a little when he talks about the problems. We had some great people here, particularly in the field, and they are still an important part of what we’re doing here.”

Several sources--both employees at CBS Records and outside observers who are involved in business relationships with the label--agree that Motolla may be exaggerating the degree of the problems at CBS. Al Teller, the former CBS Records president, said, “The idea that CBS was cold for any extended period of time flies in the face of facts because CBS enjoyed its greatest profitabiliy while I was running it.”

Still, most of the sources felt that the company had image problems.

Peter Paterno, who was a lawyer representing such hard-rock acts as Guns N’ Roses and Metallica before being named recently to head the Walt Disney Company’s new record label Hollywood Records, said, “There were a lot of people at CBS who were arrogant and obnoxious and nobody wanted to deal with them.

“You can get away with being arrogant when you’re hot, but they were cold, and that’s different. Why not do business with Warners? They were hotter and they were nice people. When I had a good new band, I went to Geffen or Elektra.

“But CBS has certainly addressed the problem to the point where people are willing to do business with CBS again. I’m a great Donny Ienner fan and Dave Glew is very good at Epic. I think they understand the problems and they are trying send out a signal that CBS is not the horrible place that it was to deal with.”

Besides strengthening Columbia and Epic, Motolla and Yetnikoff are pledged to develop more CBS subsidiary labels--along the lines of the Warner-Elektra-Atlantic strategy--and to move the company into new areas, including more ambitious home video projects, merchandising and, eventually, building or operating some concert venues.

Not everything has worked so far. The first step toward a subsidiary label--the Los Angeles-based WTG Records--is generally viewed in the industry as a major dispapointment. There are also flickers of resentment among veteran CBS employees because Motolla has put so many “outsiders” in key, high-salaried positions. The latest: Michele Anthony, a Los Angeles music business attorney who has just been named a senior vice president.

Still, Motolla is on a roll.

“It’s great to be able to pick up the trades and see 26 CBS albums on the charts and realize it was the highest chart share in the history of CBS Records, but the feeling here is that we are just getting started,” Motolla said.

“I’ve got tremendous respect for Warners and what they can do, but it’s a horse race again and I like our chances because I think we’re now the ones who are hungry and aggressive.”