Combs’ Recording Label Making Noise in Industry

Twelve days after being acquitted of gun possession and bribery charges by a Manhattan jury, Sean “Puffy” Combs and his Bad Boy record label Wednesday claimed the No. 2 spot on the nation’s pop chart with a new album by vocal group 112.

It’s a remarkable turn for Combs, whose New York-based Bad Boy Entertainment enterprise was considered extremely vulnerable last year as he prepared to go on trial for a Dec. 27, 1999, nightclub shooting incident that injured three people.

Indeed, since early this year, with the courtroom showdown approaching, Combs’ business empire has posted a series of successes that position him to regain his dominance of the charts.

A week before his trial opened, the debut album from Dream, a teen-girl pop group Combs signed, landed in Billboard’s top 10 and it remains a hot seller two months later.

Last month, in a fashion industry first, a preview showing of his popular Sean John clothing line was aired live on cable’s E! Entertainment channel.

Combs declined to comment, but his supporters say the comeback is no accident. Combs spent much of the last year trying to rebuild the record label’s roster after the 1997 murder of his top artist, Notorious B.I.G., and the 1999 exits of rap stars Mase and The Lox.

“I can tell you that in the last six to nine months, he was in the office every day. He was in the studio every night,” said Kenny Meiselas, a New York attorney who is among Combs’ closest advisors. “Even during [the trial], when his days were occupied, he went back to the office at 5:30 every night and worked at the studio until 3 or 4 in the morning. That’s the major reason why everything’s doing so well right now.”

But Combs’ label, a joint venture with Bertelsmann’s Arista Records, has yet to regain the market share lost after Notorious B.I.G., whose real name was Christopher Wallace, was slain in Los Angeles.

Bad Boy’s share of current-album sales in the U.S. dropped last year to 0.63%, from 2.22% in 1997--despite delivering hits from new R&B; act Carl Thomas and rap artist Black Rob.

Last year’s hits also included the debut of rapper Shyne, whose album has sold 674,000 copies. But Shyne, whose real name is Jamal Barrow, was convicted in the nightclub shootings and is facing 25 years in prison. With the success of acts Dream and 112 this year, the label’s market share has risen to 1.22%, according to Soundscan.

The falloff, said Bad Boy officials, came during a period when the label released predominantly new acts, which even when successful typically sell less than established stars. And before that, Combs was out of the office to tour in support of his own album.

“People talk about the supposed falloff of Bad Boy. In reality, they’ve had another phenomenal year,” said Lionel Ridenour, executive vice president of Arista. “When you break a Carl Thomas and do over a million records . . . and you come out with Dream, it’s really a testament to Puffy’s vision. He had to go back and rebuild. He did a masterful job.”

Bad Boy officials said the label generated an estimated $95 million in sales last year but acknowledged they had declined since 1998, when sales peaked at about $130 million. Competitors put the figure far lower, suggesting Combs’ record label only generated about $50 million last year.

Even his rivals, however, say the recent hits have positioned him for a big year. And his Bad Boy label’s diverse release schedule includes a promising new gospel record as well as one from rapper G-Dep, whose new video features Combs.

He “has a chance of coming back and doing some serious damage,” said one high-ranking rival executive.

Moreover, his other businesses, for the most part, are thriving. Sean John generated an estimated $65 million last year and it projects sales of more than $100 million this year with the debut of a new boys’ line and an underwear line.

Combs also is considering an ambitious expansion plan for Justin’s, his two soul-food restaurants. Another venture, Notorious magazine, suspended publication last year but may resurface with a new design, Bad Boy officials said.

Still, Combs’ legal troubles aren’t finished. He is facing lawsuits from the three shooting victims; his limo driver, who claims he suffered emotional distress from the nightclub incident; and a Detroit television host who alleges Combs’ associates beat him up in August 1999 after he refused to sell them a tape of an interview in which Combs grew irate when asked about Wallace’s death.