Rock Act Leaves Virgin Records Amid Dispute

The music industry is buzzing about the sudden exit of rock act Custom from Virgin Records after a run-in with Nancy Berry, the controversial vice chairwoman of the company’s worldwide record division.

EMI Group-owned Virgin released the Canadian band from a long-term contract just months before the release of its debut album. The move means the label will have to forfeit the $750,000 spent to create the recording.

Under the highly unusual arrangement, Custom was allowed to put the finished album up for sale. It is at the center of a fierce bidding war among several of EMI’s competitors.

Representatives for Custom singer Duane Levold, who had the clash with Berry, declined to comment. Berry is vacationing in Italy and could not be reached.

EMI music chief Ken Berry, who is in the process of divorcing Nancy Berry after 20 years of marriage, also declined to comment.

EMI spokesman Dan Klores said Wednesday that “there had been friction between a record executive at Virgin and a band member; and for that reason, the label was willing to let Custom out of the contract.”

Three sources close to the negotiations said Levold consulted an attorney about filing a harassment claim against Virgin after allegedly receiving a series of threatening voicemail messages from Nancy Berry. The singer, a Redondo Beach resident, mixed a tape recording of the voicemails with a musical arrangement and delivered a copy of it last month to EMI’s legal department, the sources said.

EMI severed its deal with Custom shortly thereafter.

Klores refused to discuss the voicemails or any specific details leading up to Custom’s departure.

“Because this is a personal matter, we have nothing to say about that,” Klores said.

Custom is being courted heavily by several music labels, including AOL Time Warner’s Atlantic division, DreamWorks SKG and Artist Direct, the latest start-up from Los Angeles entrepreneur Ted Fields. Even though Custom has no track record, the band is generating signing offers in the $1-million range, according to sources knowledgeable with the bidding.

The clamor surrounding Custom’s exit is the latest embarrassment for EMI, which ranks last among the five record conglomerates in U.S. sales. The British music giant has been jilted twice, after merger talks with AOL Time Warner and Bertelsmann in the last two years.

The incident raises new questions about the management style of Nancy Berry, whose ascent at EMI has been dogged by allegations of nepotism and controversial behavior.

Nancy Berry joined the company as Ken Berry’s assistant in 1978 and is credited with creating successful global campaigns for such superstars as Janet Jackson, Rolling Stones and George Michael. Before joining Virgin, she worked in a record store in Detroit, where she managed a rock band. They married in the late 1970s, and she has worked by her husband’s side ever since.

In 1997, Forbes Magazine described Nancy Berry as a “former groupie” whose relationships with many performers are “well, let’s just say they’re unusually close.”

In an interview that same year with The Times, Ken Berry addressed industry gossip revolving around his wife’s management style and her personal life.

“Nancy works very hard with the artists, and she is extremely professional in the way she gets things done,” Berry said. “She is not interested in sleeping with our roster of acts. That is not what she is about.”

Last year, Ken and Nancy Berry separated and now are in the final stages of completing a divorce.