Capitol Year at the Record Companies

With M.C. Hammer and Vanilla Ice easily outselling the competition for the past six months, you’d have to call 1990 the year hip-hop went pop and got hot.

A tidal wave of rap music swept through the record industry in a tumultuous year marked by a string of censorship battles, the sale of Geffen Records, the fall of longtime CBS Records kingpin Walter Yetnikoff and the launching of a battery of new record labels. Of course, these expansion plans come as the industry’s five-year hot streak (fueled in part by huge CD catalogue sales) sputtered to a close, forcing record companies to gear up for a possible 1991 recession-fueled sales slump. Many observers are already predicting that many of the new labels, especially the ones without deep-pockets financing, could be out of business by 1992.

With those grim tidings in mind, let’s look at Pop Eye’s annual Record Company Scorecard, which gauges the winners and losers among the industry’s major record companies. In show biz, perception is reality. Since many labels won’t divulge specific sales figures and profit margins, we’re judging companies as much on their industry image as their sales performance. The following assessments are based on interviews with a dozen industry experts who rated each major record label’s 1990 performance.

A&M; RECORDS: It’s a sign of how dire the straits are at A&M; that the label has been forced into an outlandish bidding war to keep Janet Jackson simply because the pop diva is A&M;’s only guaranteed multi-platinum superstar. Insiders say Jackson could get as much as $8 million to $10 million a record as part of a proposed four-album deal. At those prices, it would be an uphill battle for A&M; to recoup its investment, but once you get past Sting, the label doesn’t have many other assets to work. The label’s new chief, the capable Al Cafaro, has his work cut out for him, especially if he also has to replace colorful promotion chief Charlie Minor, who wants more money--or his own label to run.

ARISTA: It was the Year of Vanilli-Gate. As one wag put it, when’s the last time you saw so much press about an Arista act without Clive Davis hovering nearby, boasting about how he picked the singles and designed the album cover? Arista’s longtime chief has been uncharacteristically mum about his role in the Milli Vanilli debacle. Still, he deserves credit for squeezing sales out of Arista’s old pop warhorses, Barry Manilow and Carly Simon, while breaking the Urban Dance Squad and country crooner Alan Jackson. That helps make up for poor showings from Hall & Oates and Eurythmics--and keeps the label going while his promo staff tries to keep its expensive new Whitney Houston album alive.

ATLANTIC: With Doug Morris being promoted to co-chairman, it looks as if Ahmet Ertegun is finally giving up the reins and letting his trusted lieutenant run the show. Morris deserves the shot. He’s shrewdly expanded the label’s horizons, striking alliances with home video and film companies while creating new labels for up-and-coming execs like Sylvia Rhone to run. Rhone especially deserved a promotion, especially after reviving Atlantic’s black music department and breaking acts like En Vogue, Michel’le, Troop and Skyy. Meanwhile Atlantic made a ton of money with its Led Zeppelin boxed set, miraculously revived Bette Midler’s recording career and has somehow kept Phil Collins cranking out pop hits.

CAPITOL: New label chief Hale Milgrim showed at just the right time. It was a dream year at the Tower, which boxed the compass with hits in rap, pop, hard rock and country. Rap star M.C. Hammer grabbed most of the headlines with a h-u-u-u-ge album that dominated the charts all summer. But Poison’s album was a major rock hit, Bonnie Raitt kept selling to pop oldsters and Garth Brooks took the country audience by storm. So far Capitol hasn’t broken many of its new rock acts, but watch for the label to make a bid for distribution rights to Sub Pop Records, the hot Seattle-based alternative-rock independent label.

CHRYSALIS: Traditional wisdom says this pint-sized company should be struggling to stay alive, but somehow chieftain John Sykes has kept the sales machinery humming, even in the face of a lukewarm album from mainstay Billy Idol. The label’s biggest success was Sinead O’Connor, the year’s brightest new pop star, but it also had strong sales from hard-rockers Slaughter. Insiders say that the unsung hero here is Nigel Grange, whose British-based Ensign Records provided Chrysalis with O’Connor as well as critical faves the Waterboys and World Party.

COLUMBIA: Don’t let the media furor over the messy departure of Walter Yetnikoff (who was ousted earlier this year--apparently with the blessing of his closest cronies) overshadow this label’s rousing successes. Columbia has easily overtaken Arista as the home of the hottest pop-hit machinery, largely thanks to key exec Don Ienner, who learned at the feet of his former boss, Arista’s Clive Davis. The label masterfully exploited teen-dreams New Kids on the Block, kept Billy Joel alive and executed a textbook promotion blitzkrieg with Mariah Carey, who got invaluable TV exposure (thanks to the label’s marketing wizards) from a prime-time national anthem shot during the NBA finals. The label had a few clinkers--it couldn’t break Midnight Oil and it’s struggling to salvage a lackluster George Michael album. But it had a hot hand with jazz, cashing in with the Marsalis brothers, Harry Connick Jr. and selling so many “Mo’ Better Blues” soundtrack albums that label execs have boasted that the record made more money than the movie.

DEF-AMERICAN: The true wild card of the rock deck. Run by Rick Rubin, a rap Svengali turned hard-rock savant, D-A had a wild year. It provided its distributor, Geffen Records, with its hottest new rock band (the Black Crowes), a huge Andrew Dice Clay comedy album and a raft of sales from Slayer. On the other hand, Rubin’s Geto Boys record was such a hot potato that Geffen refused to release it, even though that gave Rubin an opening to take his label elsewhere. As soon as the WEA label chiefs got a look at D-A’s hefty sales reports, they started doing battle trying to scoop up Rubin’s roster. Both Elektra’s Bob Krasnow and Atlantic’s Doug Morris made strong bids, but Warners’ Lenny Waronker has the inside track.

ELEKTRA: Krasnow couldn’t have picked a better time to make a big splash than the label’s 40th anniversary year. Put simply, Elektra is the archetypal classy operation adorned with quality acts that actually sell records. With a lot of artists between albums (and some lukewarm showings from Anita Baker and 10,000 Maniacs), 1990 was a quiet year, though Motley Crue and Metallica kept selling, Deee-Lite and Keith Sweat had hits and the Cure is back with a strong re-mix album.

EMI: No one knows what to make of this place. The company has been boasting about having a banner fall quarter, but industry insiders whisper that big changes are afoot, with the possibility of EMI merging in some manner with sister-label SBK Records. Give EMI credit--it broke hard-rockers Queensryche, sold a ton of Roxette singles and cruised past the 3 million mark with its “Pretty Woman” soundtrack. However, it’s lost David Bowie, it’s struggling with Robert Palmer and Bobby McFerrin and it flopped with all-gal rockers Vixen.

EPIC: It’s always bad news here when--yet again--there’s no new Michael Jackson album. The label had an off-year in other areas too, with weak outings by Cheap Trick, Living Colour and REO Speedwagon. Still, its album-oriented rock department had success with Iron Maiden and the late Stevie Ray Vaughan, while BabyFace and Luther Vandross (who had his first pop Top 10 hit) made solid showings on the black-music side. The best news: Epic has quietly built a formidable alternative-rock roster, fueled by Social Distortion, Suicidal Tendencies and the newly signed Red Hot Chili Peppers.

GEFFEN: The big news here was clearly financial, with show-biz titan David Geffen selling the label to MCA for $550 million worth of MCA stock (which will net him even more mega profits with the sale of MCA to Matsushita). The big question being asked: Can Geffen duplicate its dazzling late-’80s successes going through MCA instead of Warner-Elektra-Atlantic’s powerhouse distribution wing? 1990 wasn’t such a bad year. Aerosmith just kept selling records (with Don Henley not far behind) while the label broke one young act, Nelson, while building a base for new-rock contenders the Posies and Sonic Youth. There were a few bombs, most notably Whitesnake and Asia, but the label got a quick fix with “The Simpsons” album, a hot Christmas novelty item. By starting a second label, DGC Records, the Geffen brass hope to do a better job of breaking some of their more adventuresome talent.

ISLAND: This struggling label was bought by PolyGram, which has since made significant staff cutbacks and may be looking to move Island president Mike Bone, who’s been denying rumors that he’s going to help run one of PolyGram’s new labels. Things could look up if U2 delivers a blockbuster album in 1991, but this year was a disaster, with the only good news coming from Island-distributed Delicious Vinyl, home of rap fave Young M.C.

MCA: Every morning when they arrive at work, MCA’S new Japanese owners croon “Love, Light and a Dream,” the Matsushita company song. But once they get a good look at MCA’s money acts, they’ll be singing the praises of New Edition. Who would have guessed that MCA would still be living off that unheralded 1984 signing, which spawned such successful spin-off artists as Bobby Brown, Bell Biv DeVoe and Ralph Tresvant? Expect even more black-music hits in 1991 when MCA sees the payback from a farsighted label deal with writer-producer Teddy Riley (whose band, Guy, is already showing dividends). On the corporate front, MCA swung several key deals, which could make it a major player in the expanding worldwide market. In addition to its purchase of Geffen Records, MCA launched its own Japanese record company (in a joint venture with JVC) and laid the foundation for a 1991 opening of its own record company in Germany (where MCA had previously licensed its records through a third party). MCA’s Achilles heel--it still hasn’t broken a rock band, despite promises from MCA Records president Richard Palmese that Broken Homes would be 1990’s bonus babies (they weren’t). Now MCA has a new great white-rock hope--Trickster--but the jury’s still out.

MOTOWN: At least when it comes to singles, the hits started coming again at this slumbering R&B; factory. In fact, Motown had so many radio hits (with groups like Stacy Lattisaw, Today and the Boys) that it even surpassed big-brother MCA in Billboard’s year-end top singles chart. However insiders say that, sales-wise, Johnny Gill’s album was the label’s only mega-hit, so it could be another year before Motown actually hits its stride.

POLYGRAM: Industry observers call this place a total mess--or as one exec put it, “a ship without a captain or a rudder.” If there’s a shortage of dynamic leadership in the record industry, it shows most at PolyGram, which last year bought two of the industry’s weakest labels--A&M; and Island--for almost as much money as it would’ve cost to buy Geffen! PolyGram’s top brass insists it won’t absorb the two labels, but a look at history shows that PolyGram bought MGM, Casablanca, Capricorn and 20th Century Records--and swallowed them all up. To make PolyGram more competitive, the company has hired new execs to run its two key rock labels, Mercury and Polydor. Talk about a challenge: Polydor is loaded with young, unproven acts (though it has Tony! Toni! Tone!, a black-music contender) while Mercury is top-heavy with aging rockers who are either past their prime (Scorpions and KISS) or want to make movies (John Mellencamp and Jon Bon Jovi).

RCA: Can an executive who made his mark in country cross over to the rock front lines? If anyone can, it’ll be Joe Galanti, who earned a reputation as a masterful Nashville marketing wizard after grooming K.T. Oslin, the Judds, Restless Heart and--most successful of all-- hot new heartthrob Clint Black. That’s good news for this sleeping giant, because its rock roster was a major disappointment (especially Bruce Hornsby and Lita Ford) and its lucrative distribution deal with rap factory Jive Records (Kool Moe Dee and Too Short) is up in 1991.

SBK: This was the one--and only-- of the new generation of record labels to take off. Give credit to top exec Charles Koppelman, the veteran music publisher and shrewd pop packager, who hit paydirt with Vanilla Ice, an unlikely white rap sex-symbol whose debut album has zoomed past the 5-million mark. SBK already has a reputation as a big-spending label, but when you add up its profits from a debut smash from Wilson Phillips, a strong showing from Technotronic and a “Teenage Mutant Ninja Turtles” soundtrack novelty hit album, you’ve got to admit--SBK is off and running.

VIRGIN: It seems as if every time you turn around, Virgin is starting another label, including Charisma Records (which had a No. 1 single with Maxi Priest, signed the Knack and has been bidding for Janet Jackson), Earthworks (a soundtrack label) and Night Records (devoted to reissuing live albums). Most observers say that Virgin should concentrate on breaking its acts--and spend less money doing it. Once you get past Paula Abdul’s rousing success and the surprise showing of After 7, which went platinum, it was a mediocre year here. Virgin’s crack promotion staff kept its UB40 album alive. But sales were slow for its much-hyped Lenny Kravitz album, its Iggy Pop comeback fizzled and the label’s new Steve Winwood album (the result of a big-bucks signing) is going nowhere fast.

WARNERS/REPRISE/SIRE: It was a solid but unspectacular year for this industry giant, which still has one of the industry’s classiest rosters of enduring pop artists. Madonna may have grabbed all the headlines, but the real news was the brilliant job Warners did breaking Faith No More, perhaps rock’s most promising band. Warners also gets kudos for developing two other quirky artists--rock bad boys Jane’s Addiction and country oddball k.d. lang--while squeezing huge sales out of Depeche Mode, its other young rock meal ticket. The label’s prestige artists haven’t fared so well. Paul Simon’s new album is a modest hit, but it’s no “Graceland.” ZZ Top is struggling, Los Lobos didn’t go anywhere and Neil Young, despite rave reviews, didn’t crack the Top 30. The label’s black-music wing had a terrific year at Top 40 radio, but Warners spent big bucks on its soundtracks for Prince’s “Graffiti Bridge” and “Listen Up: The Lives of Quincy Jones,” which proceeded to bomb at the box office and quickly slide down the charts.