MOTTOLA STARTING OWN LABEL, LEAVES SONY MUSIC POST

After 14 years on the job, Sony Music Entertainment Chairman/CEO Thomas D. Mottola has stepped down from his post to launch a new label.

Negotiations are already underway for Sony to distribute the as-yet-unnamed new company.

Sony Corp. President/COO Howard Stringer, to whom Mottola reported, made the announcement in an internal memo, calling him "an icon of the music industry" and saying, "we respect his decision to return to his musical roots at such a pivotal time in music history."

Said Mottola: "I have been thinking about taking up this new challenge for about a year and really made the decision to go forward only recently. I am thrilled that I will continue my long-standing relationship with Sony to create a company that I believe will become a blueprint for the music business in the coming years."

After Sony acquired then-CBS Records in 1988 and replaced Walter Yetnikoff with Mottola just two years later, Thomas D. transformed the music group into a true powerhouse, earning the biggest sales numbers in its illustrious history. Last year, Sony Music finished with 15.67% of the U.S. music market, placing it third among the five major music companies.

Mottola organized one of the industry's strongest, long-standing management teams, headed by such execs as SME’s Michele Anthony, Mel Ilberman and international head Robert Bowlin, Columbia’s Don Ienner and Epic’s Dave Glew (expected to step down later this year) and Polly Anthony. During his decade-plus-long reign, he developed and expanded SME worldwide business in more than 60 countries. He also revitalized the publishing division and expanded SME into gospel, children’s entertainment and audio and video programming. Most recently, he realized a number of strategic co-branding initiatives, including Celine Dion's marketing partnership with Chrysler and a global marketing campaign with Pepsi, as well as recently signing Rock Hall of Famers AC/DC to Epic Records, acquiring their catalog.

The industry vet was instrumental in helping launch such artists as Mariah Carey, Jennifer Lopez, Ricky Martin, Pearl Jam, Maxwell and John Mayer, while continuing to build the careers of superstars Dion, Bob Dylan, Bruce Springsteen, Dixie Chicks, Billy Joel, Barbra Streisand, Michael Jackson and Tony Bennett.

Before joining then-CBS Records in 1988 as President, Mottola was a highly successful manager as founder and President of Champion Entertainment, where his clients included superstars Hall & Oates, John Mellencamp and Carly Simon.

According to sources, a replacement for Mottola will be announced within the next 24-48 hours. The new chief will reportedly be someone from outside the traditional record business, "with a strong financial background." Sony has agreed to release Motolla from the two years he has remaining on his current contract.

That appointment will come from Sony Corp. President/COO Stringer, to whom the new exec will report. The 60-year-old is directly in charge of all U.S. operations for the Tokyo-based media giant.

Said Stringer: "Tommy Mottola has led Sony Music for 14 remarkable years. In that time, he has emerged as an icon of the music industry. His contributions to our business, his eye for talent and indeed, his relationships with the entire artistic community are matchless. We respect his decision to return to his musical roots at such a pivotal time in music history and expect that he will be enormously successful."

Added Sony Chairman/CEO Nobuyuki Idei: "Tommy Mottola has been a close colleague and a dedicated member of the Sony senior management team for many years. With all of the changes in the music industry, Tommy felt it was important to return to his great passion for label and artist development. We deeply appreciate all that he has done to extend Sony's presence around the world, and we look forward to working with him in the future."

Mottola, who was upped to Sony Music Entertainment President/COO in 1993 and Chairman/CEO in 1998, calls his new enterprise "a total entertainment company and a great opportunity to leverage my experience, knowledge and relationships. With the dramatic shift we have seen in the music industry over the last few years, we need to look for new solutions to create longterm value. I believe consolidating the range of entertainment disciplines in one organization today holds the greatest potential for efficiently realizing artistic vision and commercial success."