Jay Boberg abruptly quit Thursday as president of Vivendi Universal's MCA Records, becoming a casualty of the music industry's deep sales slump.
Universal Music Group also realigned its management structure, putting MCA under the direction of Jimmy Iovine, who heads the larger Interscope Geffen A&M; division. The company said MCA promotion chief Craig Lambert would run the label and report to Iovine until Boberg is replaced.
Several executives said the shake-up indicates how quickly fortunes can change in the record business. MCA released the second-bestselling album of 2001, Shaggy's "Hotshot," which has sold an estimated 6.5 million copies in the U.S.
But the last year has been a difficult one for Santa Monica-based MCA.
It garnered meager sales for acts such as pop-reggae star Shaggy and pop band A*Teens. The label missed its financial projections last year, sources said.
Vivendi Universal's giant music operation has been under pressure to boost its bottom line as album sales drop industrywide.
Operating profit for the company's music unit plunged 51% to $172 million for the nine months ended Sept. 30.
The sales decline comes at a time when Universal must try to negotiate new deals with the management of its bigger labels. Two of the company's hottest executives -- Iovine and Island Def Jam chief Lyor Cohen -- are approaching the end of their contracts, sources said.
Boberg, who had more than two years left on his contract, disclosed the sudden resignation Thursday to MCA employees.
He said in a memo to label executives that he leaves a roster of acts that is "an artistic and musical goldmine."
A spokeswoman said Boberg, who has run MCA since 1995, wasn't available to elaborate.
Universal Music Group Chairman Doug Morris denied speculation that MCA would be absorbed by Interscope Geffen A&M;, which is based in the same building. MCA "will remain as a full-service, free-standing label," Morris said.
MCA released just three of Universal's 50 top-selling albums last year. According to Nielsen SoundScan data, the label's share of current album sales in the U.S. slipped to 2.4% last year, down from 2.8% a year earlier.
Boberg, 44, broke into the business when he joined artist manager Miles Copeland in 1979 to found pioneering I.R.S. Records.
After the sale of I.R.S. to EMI for an estimated $20 million, Boberg was tapped in 1994 to head MCA's publishing arm. He was promoted to president of the MCA label a year later.
At the time, the label had a thin artist roster and critics often said MCA stood for Music Cemetery of America. Under Boberg, MCA returned to chart success with such acts as Sublime, New Radicals, Aqua and Blink-182.
Boberg also has been an advocate of such off-beat acts as hip-hop's Common and Talib Kweli and Icelandic band Sigur Ros -- all of which have attracted more critical success than album sales.
"I truly respect Jay as a person and record executive and will miss him," Morris said in a statement.