This Cut Is the Deepest

It’s as hard to argue against the business logic of Seagram Co.’s traumatic downsizing of two prized record labels this week as it is to feel good about it.

One thing is certain as we effectively say farewell to A&M; and Geffen Records, which between them introduced such acts as the Police, the Carpenters, Guns N’ Roses and Nirvana: It’s almost impossible to think of labels as anything more than pieces in a conglomerate puzzle.

There is a tendency to speak chiefly in terms of market share or profit levels when talking about the success or failure of record companies, but the most vital labels over the years also won our respect and allegiance with their commitments to artist development and their contributions to pop culture.

With power in the record industry becoming increasingly concentrated in a few huge companies, there are fewer and fewer people in position to say “yes” to young maverick musicians at a time when the pressure in the industry is so high to come up with instant hit-makers. The transfer of power at A&M; and Geffen by Seagram’s Universal Music Group to Interscope reduces the options further.

The history of the record business is filled with stories of artists, from the Beatles to Garth Brooks to Alanis Morissette, who were turned down by label after label until they finally found someone who saw something unique and was willing to take a chance on signing them.

Every time you close a label door, it reduces the odds for that special artist to find a champion.

And the consolidation isn’t over. The industry is braced for yet another jolt if BMG buys the EMI Group, which would mean the heart of the industry would be in the hands of four massive companies, down from the current five.

Many of the most important developments in contemporary pop music, starting with the launch of the rock ‘n’ roll era itself, were the result of entrepreneurs at independent record companies taking chances on talents that were often thought of as being too far outside of the mainstream for the major labels to sign.

Consider the enormous consequences from Sam Phillips at Sun Records saying “yes” to signing Elvis Presley and from Ahmet Ertegun at Atlantic Records saying “yes” to Ray Charles--along, over the years, with Marshall Chess saying “yes” to Chuck Berry and Muddy Waters for his Chess Records, Berry Gordy saying “yes” to “Little” Stevie Wonder at Motown, Chris Blackwell saying “yes” to Bob Marley and U2 at Island, and Russell Simmons and Rick Rubin saying “yes” to the Beastie Boys at Def Jam.

At their peak, A&M; and Geffen Records were in the best of the independent record business tradition.

After starting A&M; in 1962 on a $1,000 investment, co-founders Herb Alpert and Jerry Moss said “yes” to what turned out to be some of the most popular or acclaimed artists of our time.

Those acts included some that may have ultimately sold millions of albums but seemed anything but safe bets at the time--such as the Carpenters, the squeaky clean pop duo that may have been the unhippest act on the planet during the era of Woodstock and flower power, or the Police, a reggae-influenced rock band that toured the U.S. for months in a van before getting a commercial nibble.

“I’d like to think the legacy of A&M; revolves around commitment to the artist,” Moss said this week, reminiscing about his label. “Every record that came out of A&M; to my mind had a handmade feel to it . . . something personal that we helped pull out of the artist. To me, that should be the goal of every record company.”

It’s a tradition that continued even after Alpert and Moss sold the company to PolyGram in 1989 for $500 million.

At Geffen Records, started in 1980, industry titan David Geffen knew the importance of a diverse team of talent scouts and he, along with industry veteran Ed Rosenblatt, gave the executives wide latitude. The result was a remarkable talent roster that ranged from hard-rockers Aerosmith and Guns N’ Roses to such ‘90s inspirations as Nirvana and Beck.

And the Geffen team, too, continued in an artist-minded direction after the label was sold in 1990 to MCA, which in turn was bought by Seagram.

But both A&M; and Geffen struggled in recent years, leaving them vulnerable when Seagram reviewed its music properties after acquiring A&M; and three East Coast labels (Mercury, Island and Motown) as part of last year’s $10.4-billion purchase of PolyGram.

In an action taken Thursday, Seagram laid off around 280 employees at A&M; and Geffen and is expected over coming months to drop about 90 of the labels’ 130 acts. (Another 160 or so acts may be dropped from Seagram’s East Coast labels.)

The fact that Seagram’s Universal Music Group wants to sever ties with so many acts is a condemnation of the industry’s tendency to sign talent so indiscriminately. Because there is so much profit to be made when an act hits big, companies often believe they can come out ahead even if only one or two of every 10 signings score. But the cost of all those signings is staggering--as much as $1 million an act--when none succeed.

The executives would argue that their labels have to get smaller, but they have to get smarter, too. They have to make every signing count and think long-term, not just immediate returns.

By dismantling A&M; and Geffen, and placing the remaining staffs and rosters under the control of Interscope Records, Seagram’s Universal Music Group is rolling the dice with what has been the most acclaimed independent record management team of the ‘90s.

Under the leadership of Jimmy Iovine, Ted Field and Tom Whalley, Interscope has shown a remarkable ability to tap into the most dynamic pop movements of the decade, from rap (Dr. Dre and Tupac Shakur) and hard-core rock (Nine Inch Nails, Marilyn Manson) to gospel (Kirk Franklin).

The irony is that Interscope was started as an independent label, much like the early A&M; and Geffen. Iovine, in fact, has been one of the biggest critics of the corporate invasion in the record business.

Until now, Interscope has been partners with Seagram, but the plan is for the conglomerate to soon buy the remaining portion of the label. The question in the industry is what effect all this new ownership and new responsibility will have on Iovine, Field and Whalley.

Will the Interscope team, which is used to quick decisions and a limited number of artists, be able to work under the new arrangement and pressure?

The Seagram brain trust obviously believes so--and Seagram stockholders should be pleased. If you had one team handling your musical decisions, this is the one--based on their track record in the ‘90s. At the same time, pop fans and artists have every right to be nervous about this increasing concentration of power in the record industry. Even if Interscope maintains its independent spirit, it’s healthier to have more--rather than fewer--people with the authority to nurture and sign acts.

The Universal Music Group stresses that A&M; and Geffen will continue to exist as labels, complete with A&R; staff that will search for talent. But the power to sign and drop acts rests with the Interscope team. It is no longer an autonomous label.

Indeed, the limit of A&M;’s autonomy was underscored Thursday.

Early in the day, some employees put a black band around the A&M; sign, a symbol of what they felt was the end of an era at the once proud label and, quite possibly, the end of an era in the record business as well. It was a spirited, but ultimately harmless gesture in keeping with the rebellious spirit of rock ‘n’ roll.

By mid-afternoon, the word came from Seagram headquarters. The black band was to be taken down immediately.