CAPITOL-PRIORITY MERGER
KICKS INTO GEAR

As expected, the merger of Priority into Capitol began Friday (10/5), and a staff consolidation is now in progress. Insiders say that about 80 employees from the two labels will eventually be let go. Look for the Priority staff of 100-plus to take a significant hit in the shuffling, while Capitol will suffer some losses as well.

As a result of the restructuring, Priority will now act as the Urban division of Capitol. It will also continue to promote and market its own rap and R&B roster.

It is unknown whether Priority will handle Crossover promotion for the newly combined company. Sources said Priority's back-office operations will be merged with Capitol, and the label will remain as an imprint under the Capitol banner.

According to EMI, parent to both companies, "The moves have been made to improve efficiency and effectiveness of the marketing and promotion in both companies, while at the same time reducing costs."

EMI Recorded Music North America Deputy President Roy Lott was reportedly integral in the restructuring of the labels, which previously existed as separate units within EMI.

The newly combined company will report to Capitol President and CEO Andy Slater, who took his place on the Tower's throne in April.

Since coming on board six months ago, Slater has made some key hires including Mark DiDia, Larry Jacobson and Dan Hubbert, and has come to terms with Wendy Goldstein, who had been tapped by Priority founder Bryan Turner for a key A&R post at the then still stand-alone Priority label. Goldstein will reportedly head up Priority's A&R efforts in the Capitol mix.

Turner bailed out of Priority just last week after previously selling his stake in the label he founded 15 years ago to EMI for $100 million.

In related news, No Limit ended its six-year distribution agreement with Priority following the departure of Turner and the impending merger of the label into Capitol.