RUMOR MILL
Thursday, April 10, 2014
NEAR TRUTHS BY I.B. BAD
THE BREAK-UP AND ITS MANY MOVING PARTS:
DECISION TIME FOR BARRY WEISS
DECISION TIME FOR BARRY WEISS
Ironically, the odd man out in last week’s dramatic reshuffling of UMG’s East Coast labels may emerge from the present confusion as one of the big winners. At this pivotal moment, former East Coast Music Group Chairman/CEO Barry Weiss appears to have a buffet of opportunities spread in front of him.
Weiss is not going back into the building, and his exit package is said to be fair, generous and all worked out. And while it’s possible for a new deal between Universal and Weiss, such an arrangement seems unlikely. On the other hand, if Weiss is able to secure the financing to start a newco, there could conceivably be some sort of joint-venture or distribution deal for the label. But raising cash for such deals is difficult, even if you’re willing to take a modest salary for a piece of the upside, and that’s merely the first challenge in trying to create a profitable brand from scratch—which is why the vast majority of such undertakings fail.
Lyor Cohen’s latest venture is a good example: It took months to get a deal for The 300 in place, and when he found himself back inside Warner Music, it appears that Cohen had a "Now what?" moment. Given his lack of vision, it’s understandable that so many industry veterans who’ve seen similar scenarios play out have already pronounced Cohen’s venture a virtual flop. It’s shocking how irrelevant a high-profile industry figure can become within a short period of time when he loses sight of what the real prize is.
Cohen’s critics say he lost perspective when he started plundering the WMG coffers years ago, which eventually led to his dismissal by Len Blavatnik. Steven Cooper contends that it was Cohen’s greed that caused the CEO to establish the company’s current austerity policy, which is keeping a lid on current WMG executive salaries. Warner insiders say that Cooper used this very spin when renegotiating the contracts of Cohen cronies Julie Greenwald and Craig Kallman, who now have short-term contracts, with Greenwald’s deal nearly up.
Observers believe Weiss would prefer to become an owner in the next phase of his career. He’s made millions during his extended run as a top music exec, and he reportedly got a huge payday when Clive Calder sold Jive to BMG for $2.7 billion back in 2002. On the other hand, those who know Weiss well describe him as a pragmatic, no-bullshit kind of guy, and if he determines that the ownership possibilities available to him lack the proper equity, partners and funding to make it happen, he may well decide to look for a high-level job at another major. Either way, don’t look for him to make the same mistakes Cohen did, because he’s shown himself to be much smarter and not at all delusional about his own self-worth.
WMG’s pay is substandard, but if Blavatnik were savvy—and when you’ve made $22 billion, you’re obviously no dummy—he would do whatever it takes to bring Weiss in to fix some of the company’s problems. This possibility seems unlikely, however, because Blavatnik and Cooper have exhibited nothing close to savvy up to now, with the significant exception of further empowering Cameron Strang, who was then able to convince them that hiring Big Jon Platt for mega-bucks was a smart move.
Is there a place for Weiss at Sony Music? Doug Morris has just filled a key post, naming former UMG star Jason Iley Head of Sony U.K., and he’s said to love his teams at Columbia, RCA and Epic, each of which appears to have all the executive talent it needs already in place. On the other hand, when it comes to savvy, Morris has few rivals in the modern era, and he may come up with a way to make a deal with Weiss that enables him to do what he’s widely perceived as doing extremely very well—breaking acts and selling records. The conflict between Weiss and Rob Stringer that occurred toward the end of Weiss’ time at the merged Sony BMG are said to now be a non-issue, replaced by a mutual respect. Further, Weiss has had hands-on working relationships with Peter Edge and Tom Corson when he was running RCA/Jive as well as with then-Arista chief L.A. Reid. He’s even familiar with a number of the top acts on Sony’s artist roster. Given all of the above, is it any wonder that the rumor mill is in overdrive about Weiss returning to Sony?
To be continued Friday morning…
Weiss is not going back into the building, and his exit package is said to be fair, generous and all worked out. And while it’s possible for a new deal between Universal and Weiss, such an arrangement seems unlikely. On the other hand, if Weiss is able to secure the financing to start a newco, there could conceivably be some sort of joint-venture or distribution deal for the label. But raising cash for such deals is difficult, even if you’re willing to take a modest salary for a piece of the upside, and that’s merely the first challenge in trying to create a profitable brand from scratch—which is why the vast majority of such undertakings fail.
Lyor Cohen’s latest venture is a good example: It took months to get a deal for The 300 in place, and when he found himself back inside Warner Music, it appears that Cohen had a "Now what?" moment. Given his lack of vision, it’s understandable that so many industry veterans who’ve seen similar scenarios play out have already pronounced Cohen’s venture a virtual flop. It’s shocking how irrelevant a high-profile industry figure can become within a short period of time when he loses sight of what the real prize is.
Cohen’s critics say he lost perspective when he started plundering the WMG coffers years ago, which eventually led to his dismissal by Len Blavatnik. Steven Cooper contends that it was Cohen’s greed that caused the CEO to establish the company’s current austerity policy, which is keeping a lid on current WMG executive salaries. Warner insiders say that Cooper used this very spin when renegotiating the contracts of Cohen cronies Julie Greenwald and Craig Kallman, who now have short-term contracts, with Greenwald’s deal nearly up.
Observers believe Weiss would prefer to become an owner in the next phase of his career. He’s made millions during his extended run as a top music exec, and he reportedly got a huge payday when Clive Calder sold Jive to BMG for $2.7 billion back in 2002. On the other hand, those who know Weiss well describe him as a pragmatic, no-bullshit kind of guy, and if he determines that the ownership possibilities available to him lack the proper equity, partners and funding to make it happen, he may well decide to look for a high-level job at another major. Either way, don’t look for him to make the same mistakes Cohen did, because he’s shown himself to be much smarter and not at all delusional about his own self-worth.
WMG’s pay is substandard, but if Blavatnik were savvy—and when you’ve made $22 billion, you’re obviously no dummy—he would do whatever it takes to bring Weiss in to fix some of the company’s problems. This possibility seems unlikely, however, because Blavatnik and Cooper have exhibited nothing close to savvy up to now, with the significant exception of further empowering Cameron Strang, who was then able to convince them that hiring Big Jon Platt for mega-bucks was a smart move.
Is there a place for Weiss at Sony Music? Doug Morris has just filled a key post, naming former UMG star Jason Iley Head of Sony U.K., and he’s said to love his teams at Columbia, RCA and Epic, each of which appears to have all the executive talent it needs already in place. On the other hand, when it comes to savvy, Morris has few rivals in the modern era, and he may come up with a way to make a deal with Weiss that enables him to do what he’s widely perceived as doing extremely very well—breaking acts and selling records. The conflict between Weiss and Rob Stringer that occurred toward the end of Weiss’ time at the merged Sony BMG are said to now be a non-issue, replaced by a mutual respect. Further, Weiss has had hands-on working relationships with Peter Edge and Tom Corson when he was running RCA/Jive as well as with then-Arista chief L.A. Reid. He’s even familiar with a number of the top acts on Sony’s artist roster. Given all of the above, is it any wonder that the rumor mill is in overdrive about Weiss returning to Sony?
To be continued Friday morning…
