Nashville : City Sees Financial Boom as Country Music Goes Mainstream

At the exclusive Nashville City Club, whose gray-suited members only recently opened their doors to women, it’s easy to forget that this is the capital of country music.

There’s nary a rhinestone in sight, much less a bale of hay. And the doleful expressions on diners’ faces have more to do with failed business deals than broken hearts.

The power structure in this bedrock Southern city has historically distanced itself from the music industry, even though Nashville means country to most of the world. Not only did civic leaders tend to view musicians as oddballs, they also believed thatcountry stars had unjustly tar-brushed Nashville with a hillbilly image, diminishing its standing as the home of prestigious Vanderbilt University and the Hermitage, President Andrew Jackson’s elegant estate.

But with singers such as Garth Brooks taking country to the mainstream and earning more than Bruce Springsteen, Nashville’s old guard has started to change its tune. The city now sees financial opportunity in its home-grown industry, which generates more than $1 billion annually from record sales alone.

On economic development missions to places such as Los Angeles and Dallas, Nashville unflinchingly promotes itself as “Music City U.S.A.,” the slogan adopted as part of a $6-million campaign to bring 40,000 jobs to the region by 1994. A new Chamber of Commerce video rocks to a country beat, and two months ago the city created a music industry task force to “position Nashville as a premier international location” for the business.

Country has even invaded Vanderbilt. This month, for the first time, country artists performed during halftime of a Vandy football game. The next step: A string of live country music theaters patterned after those in tiny Branson, Mo., is contemplated.

“Until recently there was almost a sense of embarrassment about us,” said Joe Aniello, marketing director of the Country Music Assn. “But as we’ve branched out and become more accepted by corporate America, we’re also becoming more accepted by Nashville in general.”

That acceptance is made easier by country’s new sophistication, which mirrors Nashville’s self-image as “the Athens of the South.”

Today’s stars are more polished than their predecessors, boasting college degrees and savvy managers imported from New York and Los Angeles. Nashville’s famed Music Row is teeming with record conglomerates situated just a stone’s throw from such backward symbols as an adult club that features “50 beautiful women and three ugly ones” and kitschy museums devoted to the likes of Conway Twitty and Barbara Mandrell.

Los Angeles-based talent agencies such as Triad Artists, William Morris Agency and Creative Artists Agency also have Nashville outposts. Agents such as Triad’s Rick Shipp, who represents Vince Gill, have happily traded San Fernando Valley tract homes for five-acre Nashville spreads. Even bankers, who used to turn away country artists for loans, are moving in, perhaps realizing that music can’t be any riskier than real estate.

One of the local pioneers in entertainment lending is D. Brian Williams, a vice president of Nashville’s Third National Bank.

Williams works out of a branch in the heart of Music Row. The small office is lined with gold records awarded to bank customers such as Brooks, Travis Tritt and Reba McEntire, and country music is piped out over the speakers.

Williams remembers facing a lot of skepticism when he opened the office two years ago--he even enrolled in a music business course to better understand the industry. But now the office is Third National’s most successful branch.

“There’s still a lot of misunderstanding between the business and music communities,” Williams said. “But the music industry is being included in everything now. There’s a whole new respect for what’s going on along Music Row.”

Indeed, economic development ads created by the chamber and placed in major business publications hardly mention “Nashville,” focusing instead on business opportunities in “Music City.”

The campaign is clearly well-tailored to perceptions of Nashville. In a recent chamber poll of businesses in the region, 87% of the respondents connected the city with country music. “Market analysis showed people knew Nashville for music or didn’t know us at all,” said Fred H. Harris, the chamber’s vice president of economic development.

Entertainment and other industries such as health care, auto manufacturing and religious publishing have helped the greater Nashville area, which has about 1 million residents, weather the recession as well or better than most regions its size. In the 1980s, when Nissan and Saturn opened manufacturing plants in the area and American Airlines made Nashville a hub, 10,000 jobs were created, and the Wall Street Journal dubbed Nashville the “South’s next boom town.”

If it failed to meet those heady expectations, Nashville’s business environment still wins kudos from top financial publications, and it continues to attract new industry. Caterpillar Inc., Sparrow Records, Bankers Trust, Berol Corp. and Willis Coron are among the companies that have recently moved headquarters or divisions there, and South Central Bell plans to build a 26-story office tower in the heart of Nashville’s downtown redevelopment district.

While area economists are just starting to seriously analyze the impact of the country music boom, William B. Lindsley, a Vanderbilt management professor, said it appears to be significant. Lindsley sees an upsurge in entrepreneurial activity that he attributes to the “ripple effect” from music.

“Because of the entertainment business, there’s a whole range of consultants and subcontractors and free-lance artists who are a part of the community,” Lindsley said.

At the statewide level, entertainment ranks above agriculture in revenue, contributing $2.15 billion to the gross state product. The industry also employs 18,000 full-time and 60,000 part-time workers.

Culturally, country music is finally capturing the broad audience that has eluded it. Sales rose 84% between 1989 and 1991, and country claims 34% of the nationwide radio audience. Paul Moore, vice president of William Morris Agency’s Nashville office, said country’s sheer size forces recognition.

“When you carry a big stick, people pay attention,” he said. “The old guard has let us in because we mean a lot to them.”

Nashville’s embracing of country may also be a defensive move. The sudden emergence of Branson, Mo., as an entertainment hub has helped awaken Nashville to country’s awesome drawing power.

It’s no exaggeration to say that Nashville is obsessed with Branson, the tiny Ozarks town that attracted nearly 5 million visitors last year to live music theaters featuring entertainers such as Willie Nelson and Mel Tillis.

Nashville has always been more of a recording center than a live music town--the Grand Ole Opry is the only place that regularly features major acts. Some civic leaders believe that Nashville needs its own live theater district to remain competitive, and to further capitalize on country’s popularity. Others caution against a copycat move.

“We want to do everything we can to promote the city,” said tourism chairman Buddy Killen. “But you can’t just do it by building a bunch of theaters.”

Killen is one of the few Nashville executives with financial interests in both music and other industries. The former musician scored big in 1989, when Japan’s Sony Corp. purchased his interest in Tree International, the world’s largest country song publisher, for $50 million.

Today he runs a recording studio, a restaurant-nightclub and other businesses out of an ornate office symbolically situated between Music Row and downtown.

Killen said Nashville may sell itself short by emulating Branson. He also sees the theaters as an economic risk, since there’s no guarantee of their success.

One company that will have a lot to say about the issue is Gaylord Entertainment, owner of the Grand Ole Opry, the Opryland theme park, the Opryland Hotel, “Hee Haw,” The Nashville Network and Country Music Television.

Gaylord is Oklahoma-based, but its Nashville holdings cover a vast stretch of property outside of town. It is also one of Nashville’s biggest employers, with 7,000 full-time and part-time workers.

Gaylord, which generated more than $600 million in revenue last year, arguably deserves as much credit as anyone for country’s boom. Its cable stations, TNN and CMT, beam the Nashville sound across the nation, with Europe targeted as the next frontier. And Gaylord’s Grand Ole Opry has been sanctioned as the “mother church” of country music.

“This is not just a cycle,” said Gaylord Senior Vice President Tom Griscom. “TNN and other outlets will keep country up there.”

Griscom favors a Branson-style live Music Row in Nashville. He also said the city should do more to promote tourism in the country capital. Griscom accused the Nashville chamber of piggybacking on Gaylord’s advertising campaigns. The average Opryland stay is only 1.5 days, which Griscom said is partly because of Nashville’s poor job of promoting other attractions, such as the varied outdoor activities and the Hermitage.

The chamber countered that convention and tourist revenue is actually quite healthy--rising from $937 million to $1.6 billion in five years. Nashville attracts 7 million to 10 million visitors a year. But tourism executives, like their economic development counterparts, are also struggling with the city’s image.

To the blue-blooded residents of the Belle Meade division, Nashville still stands primarily for high culture and academic excellence, as represented by landmarks such as Vanderbilt and the city’s faithful rendition of the Greek Parthenon.

To the common man and woman, Nashville is something entirely different. Its a place where people go to lunch for “meat and threes,” a reference to the three vegetables that come with main courses; where the “Museum of Beverage Containers” is considered a bona fide tourist attraction, and where locals just assume that you know about whom they’re talking when they speak of “Hank Jr.”

RVs and campers remain a preferred mode of transportation for many Nashville tourists, and folks wandering through the cavernous Opryland Hotel and the Country Music Hall of Fame tend to be more stylistically attuned to Loretta Lynn than Mary-Chapin Carpenter.

Civic boosters concede that they’ve been frustrated so far in efforts to draw more upper-income country music fans to town, with the possible exception of the annual Fan Fair event. “Even if the yuppies like country music, they’re not saying, ‘Let’s go to Nashville,’ ” bemoaned one.

Those working to reconcile Nashville’s twang with its old South traditionalism might draw a few lessons from Country Music Hall of Fame, of all places.

Hidden amid such crowd-pleasing mementos as a genuine Minnie Pearl hat, price tag and all, one of Johnny Cash’s black suits and Elvis Presley’s 1960 gold-plated Cadillac is a small placard.

It recounts how National Life and Accident Insurance Co. hesitated to sponsor the Grand Ole Opry radio broadcasts because of fears that its business would be hurt by the association with country music.

That was in 1925. After 15 years of sponsoring the Opry, National Life’s business had quadrupled.