Artist Manager to Head Disney Record Division

In an effort to gain a foothold in the $39-billion music business, Walt Disney Co. has installed artist manager Bob Cavallo as chairman of the Burbank-based entertainment conglomerate’s newly restructured record division.

Cavallo, a respected 57-year-old industry veteran who has worked with such top artists as Prince and Alanis Morissette, signed a five-year, multimillion-dollar deal with Disney on Saturday to take charge at Walt Disney Music Group--the entertainment giant’s revamped music sector that includes three rock labels (Hollywood Records, Mammoth Records and Third Rail Records), a country label (Lyric Street Records), a soundtrack label and a music publishing division.

Cavallo’s hiring is the latest move by Disney film chief Joe Roth, who was given a mandate last year to expand the corporation’s presence in the record business, as well as hundreds of millions of dollars to make it happen.

After Roth took over last summer, Disney purchased Mammoth, opened Lyric Street in Nashville and began interviewing potential candidates to run its restructured record sector.

“In Bob Cavallo, we found a guy with an impressive track record at identifying hit talent,” Roth said in a phone interview. “This is a guy who has had amazing ears for more than 30 years. From the Lovin’ Spoonful to Earth, Wind & Fire to Prince to Green Day to Weezer to Alanis Morissette to Seal. We’re counting on Bob to discover and bring us new acts and to put together a strong organization around those acts so that we can finally start selling some records around here.”

Disney, known for its theme parks, animated films and other family-oriented products, has had a tough time trying to gain a foothold in the rock-music arena. Although Disney has sunk more than $150 million into its Hollywood Records label since its 1989 launch, the company has failed to score a major hit in the rock market.

Indeed, there was much speculation that Disney would shut down Hollywood Records after it purchased Mammoth, home to such rock acts as the Squirrel Nut Zippers, the Backsliders, Juliana Hatfield and Victoria Williams. Mammoth’s Squirrel Nut Zippers gave Disney its first hit with a breaking band.

Although Hollywood Records is expected to go through some personnel changes in the months ahead, Roth says the label will continue to sign and develop rock and pop acts for future release. Cavallo is likely to hire a new executive team to help him rejuvenate Hollywood and to bolster business at other Disney labels.

Disney’s latest moves also indicate that it has abandoned earlier plans to expand its presence in the record business by purchasing a global record conglomerate such as EMI Music.