Jackson’s Coalition Buys Stock in Five Record Companies

Jesse Jackson’s Rainbow/PUSH Coalition purchased stock this week in five of the six major record companies, and the civil rights leader said he is launching a campaign against racism and sexism in the industry.

The move follows a meeting last week between Jackson and top brass at PolyGram Music Group that resulted in the Dutch corporation issuing a public apology for an “appalling” racial remark made recently by one of its senior officials. PolyGram demoted the official and elevated an African American executive to fill his post on the Dutch-owned conglomerate’s international management board.

On Monday, Jackson’s organization bought shares in PolyGram, Time Warner, Seagram, Sony and EMI to gain access to shareholder meetings and information at the world’s largest record corporations, where minority artists generate huge profits but rarely participate in the running of companies.

“The patterns of exclusion of women and people of color from high-level posts in the music business are substantial,” Jackson said in a telephone interview. “Corporations take the art we create and the revenues we generate but deny us access to decision-making positions of power in the industry. We plan to use consumer and shareholder leverage to pressure the global conglomerates and tear down the invisible wall that has kept women and people of color out for so long.”

Although no statistics are available regarding the number of minorities working in the industry, the number of top-level black music executives at major labels can be counted on one hand--and there are even fewer Asian Americans, Latinos and women. Sylvia Rhone, head of Elektra Entertainment, is the only black chairman at any major record label.

Black music is a product that appeals to consumers of all colors, generating billions of dollars in annual revenue around the globe. In the United States alone, more than one-third of the best-selling albums on this week’s pop chart were written and recorded by women and black artists.

Jackson and other critics say that the music industry’s top executives, typically white men, have been reluctant to groom women and people of color for top positions.

Industry sources say there has been some advancement by blacks and women in the companies’ legal divisions, but most black employees are in black-music departments, where salaries are comparable, but budgets for recording, marketing and promotion are often lower than in the pop and rock areas. Salaries for the industry’s few female executives are substantially lower than their male counterparts.

In recent years, talented minority entrepreneurs such as Sean “Puffy” Combs and Russell Simmons have found success by setting up their own labels or creating joint ventures with major companies.

Last year, Jackson’s Rainbow/PUSH Coalition opened a New York office on Wall Street with the goal of investigating and improving hiring and promotion practices of minorities throughout corporate America. Jackson says his Wall Street Project has purchased small stock positions in nearly four dozen corporations this year and plans to buy stock in about 50 more companies in 1998.

Jackson said that becoming a shareholder in these companies will give him access to information about the racial and gender makeup of the board of directors and the executive staff. It will also allow him to speak out at shareholders’ meetings about unfair hiring and promotion practices and whether the needs of minority consumers are being addressed.

“We intend to judge and rate each company based upon its performance in hiring and promoting women and people of color,” Jackson said. “Our goal is to remove the glass ceiling for women and to bust down the doors that block the ascension of blacks and other people of color.”

Although Jackson has had success bringing pressure to bear on some industries, his campaign last year to target the lack of racial diversity in the movie industry fizzled.

Whoopi Goldberg, the host of the Academy Awards ceremony, made fun of Jackson’s protest at the start of the national broadcast and many of the black actors attending the event rejected the civil rights leader’s request to wear rainbow-colored ribbons to show solidarity with his crusade.

Jackson decided to target the music industry after a furor erupted last month at PolyGram following a remark made during a deposition by Eric Kronfeld, president and COO of PolyGram’s domestic music division.

Kronfeld, who oversees legal affairs and human relations for PolyGram’s U.S. labels, was ordered to testify last month in connection with a lawsuit filed against PolyGram’s Island Records by R&B; act Dru Hill, which is seeking to break its contract. (The trial opened in New York Superior Court on Tuesday, but is expected to be settled out-of-court before court resumes today, sources said).

In an Oct. 17 court deposition, Kronfeld said, “If every African American male in the United States was disqualified from pursuing a livelihood, in any way, shape or form, because of a prior criminal record, then there would be no, or virtually no, African American employees in our society or in our industry.”

Jackson was called into the fray last month by Dru Hill’s attorney and attended a Nov. 11 meeting with PolyGram chief Alain Levy. The next day, Levy issued a corporate apology and named Motown executive Clarence Avant to replace Kronfeld on its international board.

Jackson said media coverage of the PolyGram incident prompted a flurry of complaints to Jackson’s organization about racism and sexism from individuals working throughout the music industry. Jackson says his organization intends to expose disparity in employment opportunities for black and female employees at major record companies.

The Rainbow/PUSH Coalition purchased $1,000 in stock in each of five of the six music conglomerates this week. Munich-based Bertelsmann is not publicly traded.

“They call it show business. But the fact is we put on all the show and they get all the business,” Jackson said. “A century ago we used to be major contributors to the textile industry too--as pickers and choppers of cotton. But those days are over. I promise you that our place in the music industry will change too. We don’t have a talent deficit here. What we have is an opportunity deficit.”