COMPANY TOWN : Q & A : Vocal Session : Interscope’s Iovine Reflects on Time Warner Split

It’s 9:15 the morning after media giant Time Warner Inc. severed ties with controversial Interscope Records, but Jimmy Iovine, co-head of Interscope, has already gotten his second wind.

The phone has been ringing since he entered his Westwood office--and he takes a few calls, including one from partner Ted Field, the film producer and heir to the Marshall Field fortune who is on the way to the airport in New York after finalizing the split from Time Warner.

“It’s a great day for Interscope,” Iovine says. “I’m excited and I’m scared. I believe we can take our original goals for Interscope and apply it to a much broader scheme.”

With an initial investment of $15 million from Time Warner in 1990, Field, 43, and Iovine, 42, have built an estimated $30-million company that is the talk of the industry.

By offering creative control to acclaimed “cutting edge” artists such as gangsta rap producer Dr. Dre and hard rock hero Trent Reznor, Interscope has put together a roster that is the envy of the record business. If everything had proceeded according to plan, Time Warner was due to exercise an option in 1997 to pay Iovine and Field about $200 million for the remaining 50% interest in the company.

But the plan was derailed in May when U.S. Senate Majority Leader Bob Dole (R-Kan.) and others accused Interscope--and, in turn, Time Warner--of releasing music that glorified violence and degraded women. On Wednesday, Time Warner announced it would disassociate itself from Interscope by selling its half-interest in the company to Field and Iovine for $115 million.

Iovine lives in Malibu with his wife and four children, ages 1 to 7. Sitting in his Westwood office lined with two dozen pictures of his family, Iovine, a former record producer, talked Thursday about the Time Warner relationship, the impact of music on the youth culture and his ideas for the future of his company.

Question: What caused the rupture with Time Warner?

Answer: I feel we were in a situation that really didn’t work for us or for Time Warner. And because of that, Interscope was on the verge of being damaged. What were we going to do if Time Warner refused to put out one of our records? We would have had to get into a legal battle. Nobody wanted that. It would have hurt everybody on our label. It would have been terrible for the company.

In fairness to [Warner Music Group Chairman] Michael Fuchs, he acknowledged that Interscope didn’t do anything that we hadn’t been doing all along. He said that it was Time Warner’s situation that changed after the controversy broke out in May. The problem for Time Warner was they had no control over what records we put out and when you are a company as big at that, you need a certain stability. We could come in there and do anything we wanted and Time Warner couldn’t be in business with a company like that.

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Q: As a family man, how do you look at hard-core rap and rock that many adults feel is harmful to young people?

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A: As I parent, I have a responsibility in terms of what my children listen to, but I want to make that choice. I don’t believe that the answer to controversial lyrics is to silence the artist.

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Q: Do you monitor what your children hear and see?

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A: Absolutely. I watch them very closely, but it isn’t any of my business what a company puts out. My business at home is to monitor my own family. That’s what a parent should do.

Look, I listened to the Beatles and the Stones, who preached drugs, and I didn’t end up a drug addict. The Rolling Stones made a movie about Altamont that had a killing in it, but it didn’t affect my behavior. I don’t believe that music causes problems, its just a symptom of the problems that exist.

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Q: But do you see how some parents would not want their kids to hear some of the music distributed by your company?

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A: I can understand that, but opinions about what is art changes all the time. People didn’t think the Rolling Stones or the Beatles were great artists when they came out either. But I am speaking as someone with first-hand experience. I was an engineer for John Lennon and Bruce Springsteen. I produced music for U2 and Tom Petty. I’m telling you that Dr. Dre and Trent Reznor are as talented as any of those artists. They are overflowing with pure, natural talent.

Dre and [his partner at Death Row Records] Suge Knight are guys who work as hard as anybody in the business and they have something to say. I think they need to be heard. If it makes people uncomfortable to hear what is really going on in our cities, I don’t have a problem with that.

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Q: Why do you think there was so much more criticism of Dr. Dre and gangsta rap than Trent Reznor, even though Reznor’s music may be more provocative than Dre’s? Do you think racism is at work here?

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A: Anyone who thinks this is not about racism is being very naive. There are many more inflammatory movies and rock albums out there than what Dre and Death Row put out. Parents look at the [music] videos filled with young black males and they make their opinions based on other fears that have nothing to do with the music. It’s racism, pure and simple.

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Q: Time Warner and other media giants have put out potentially offensive music by other rappers. Why did Dole and others single you out?

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A: We were a scapegoat. . . . We were this year’s Willie Horton. A lot of people had something to gain from attacking us, politicians and others. They used it to advance their careers.

If I thought this was about saving children, it would be different. These conservatives aren’t concerned with that, otherwise they wouldn’t cancel all these poverty programs that help the children.

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Q: Why is Interscope successful?

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A: Interscope’s sovereignty is our entire game. It’s a very simple rule, and if you follow it you will win. The idea is to sign people, make a promise to the artist and do everything you can to fulfill that promise. Artistic freedom is important. That’s our total agenda. It’s not just about Ted and me. It’s the whole team . . . starting with Dr. Dre and Suge Knight at Death Row, Trent Reznor and John Malm at [their label] Nothing/TVT/Interscope.

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Q: Will you go into business with another major corporation or try to stay independent?

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A: This is not a baby company any more. This is a label that earns its own money. We can fund this company ourselves. Depending on what we want to do, we could go outside and take on partners, maybe a major. It could be an individual or a group of people. But whatever it is, it is all going to end up with us being able to deliver our idea. If someone buys in, they have to believe in what we are shooting for.

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Q: What have you learned from this experience?

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A: This has been a real gut check. If it was just about money, we could have just stayed at Time Warner. If we had agreed to change our contract with them, we could have sold the second half of the company to them for a minimum of $200 million.

But now we have the opportunity to build Interscope into something even more successful and ultimately more valuable. We found something that works. We now have the opportunity to take it to the next level, by truly empowering the artists and entrepreneurs we link up with it.

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A Record of Controversy

Interscope Records was belittled by industry watchers five years ago when its inaugural albums included “Rico Suave” by Gerardo and the debut release from Markey Mark. Despite the criticism, the company, dumped by Time Warner Inc. this week because of its controversial stable of rap artists, persevered and became one of the most successful start-up record companies ever. A brief look at Interscope:

* Headquarters: Westwood

* Founded: In 1990 in a joint venture with Warner Music’s Atlantic Group

* Co-chiefs/founders: Ted Field and Jimmy Iovine

* Employees: 95

* Major artists: The company is home to a variety of musicians, including rock and alternative artists such as Nine Inch Nails on the Nothing/TVT/Interscope label, Bush and Toadies; rhythm and blues groups BLACKstreet and Pure Soul; folk artist Ron Sexsmith, and rappers Dr. Dre, Snoop Doggy Dogg, and Tha Dogg Pound on the Death Row label. The company also had success with a new album by Tom Jones that prompted a resurgence of interest in the singer’s earlier releases.

* Sales: Interscope grossed an estimated $90 million in 1993, $110 million in 1994 and $145 million in 1995.

* Market share: Time Warner’s music division stands to lose up to 2 points from its 22.39% market share with Interscope’s departure. The founders could affiliate with a Time Warner competitor or strike out on their own.

Sources: Interscope Records, Times reports

Researched by JENNIFER OLDHAM / Los Angeles Times