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I.B. BAD: RISE OF THE
NEXT-GEN BALLERS

In the second installment of a two-part column, HITS' industry insider spotlights eight highly regarded individuals who possess the chops to become future music-industry moguls.

First-time major-label CEOs typically get guarantees of around $3m in annual salary for three or four years, but if they’re successful, they can increase their subsequent deals by as much as 50%. Some of the very top label CEOs make north of $6m a year between their salaries and bonuses. If these execs perform consistently, the competition will pay even more to steal them away. By contrast, if someone has been working at a company for an extended period and has risen through the ranks, it’s unusual for them to make that big a number. Most majors have at least one other top exec who is making $2-3m a year, including bonuses.

WMG is known for not paying its top execs the kind of money Sony and UMG do. Most believe that WMG salaries average as much as 30% less than those of its rivals, which makes hiring top talent that much more difficult. It has been rumored that Len Blavatnik did allow certain key execs to buy WMG stock at the price he paid in 2011; Warner has easily doubled in value since then.

The surprising pick of Paul Rosenberg to lead Def Jam while continuing to manage Eminem and run Shady has brought to the main stage some potentially dramatic movement involving certain elite label, management and publishing executives, who are on the minds of masters of the game as they maneuver pieces around the chess board. The streaming explosion has created a ginormous, insatiable beast that must constantly be fed, and the exponentially increased need for hits has caused a dramatic reinvestment in A&R and marketing.

Much of what follows is based on unsubstantiated rumors that more than a handful of high-level people nonetheless believe are true. We are neither confirming nor denying this speculation, but given the amount of chatter out there regarding these prominent big-money ballplayers, the various scenarios warrant some examination. The hot list encompasses top executives from inside the system like Steve Bartels, Tom Corson, Charlie Walk, Aaron Bay-Schuck and L.A. Reid, as well as entrepreneurs from the indie sector with fine-tuned ears, including Ron Laffitte, Ron Perry and Ian Montone. If an opening were to occur at the top of the food chain, the names of
 some or all of the above would inevitably make the short list, because the top decision-makers view them as potentially solid choices for the big tent.

Several top managers were chosen to head labels over the years, including David Geffen, Irving Azoff, Tommy Mottola and Danny Goldberg. Back in the 20th century, transitioning to a label gig was a way of getting paid more, whereas in recent years the reverse has come to be the norm—the bigger money is now in management. If Laffitte and Montone decided to work at a label, they’d have to take a big cut in income. But if they could also keep their acts, as Rosenberg is doing, they wouldn’t have to take that financial hit. The huge money in the modern-day music business is derived from artist brands.

The naming of Rosenberg puts the experienced and well-rounded Steve Bartels in play as one of the most coveted senior execs out there; indeed, his mastery of the various responsibilities of running a label has become legendary during the last 20 years. Give Bartels a highly skilled A&R team and get out of the way—he’s 24/7, and his superstar artists love him because he delivers. That said, those in the know debunk recent rumors that Bartels is heading to Epic, where Sylvia Rhone has become the de facto head of the label. The ongoing question there has to do with how Rob Stringer and Rhone decide to fill the creative hole left by Reid’s exit. Bartels will be a huge get in 2018. He’s repped by Don Passman.

Tom Corson is having a great run as the President/COO of RCA, alongside Chairman/CEO Peter Edge, and his training 
under Gil Friesen, Clive Davis and Donnie Ienner gives him a solid pedigree. People who have worked with him say he’s extremely intelligent, is well-liked by artists, understands deal-making, marketing, promotion and how to run a successful label—and he can sign. Could Corson be headed to the top job at a major label? Gossip mongers are claiming that his deal is done to head to Warners, but insiders insist this is simply not so. Those closest to Corson say he stays at Sony with a new deal; his present contract is up next spring. Joel Katz is handling his legal affairs.

L.A. Reid may well be the most dangerous, talented free agent in recent memory. Rumor has it he’s putting a venture together with VC money to take a run at being an entrepreneur, coming full circle from when he and Kenny Edmonds started LaFace in the early ’90s. No one is better suited to developing talent in the new streaming model than Reid. Witness the run Epic is having with Reid-signed acts Future (1.35m SPSRTD on his two 2017 albums through last week), DJ Khaled (619k), French Montana (235k) and 21 Savage (182k). Some say Reid’s deep relationships in the hip-hop community are unparalleled, encompassing the new school and the old school. Katz also represents Reid.

No one has been the subject of more speculation in recent months than Ron Perry, and those rampant rumors have him being considered for possible major positions at both WMG and Sony. Perry claims he’s staying at SONGS, where he and Matt Pincus have been trying to put a deal together that would enable them, along with Barry Weiss, to expand their small RECORDS label with a big infusion of cash, although that process appears to have quieted down of late. Most top record execs feel Perry’s ability to identify and sign top talent as a publisher may give him the chops to do so as a label exec, but those same players question his ability to run a major label without a powerful team surrounding him. Time will tell how this scenario plays out, but the smart money says some label is going to offer him a guaranteed salary of $3m and a bonus package. Other unanswered questions: How does Perry cash out his equity stake in SONGS without a sale of the company by Pincus if he stays? And will Pincus make Perry an offer he can’t refuse to stay at SONGS? Remember, publishing has been a much safer zone than the high-profile label-baller sector, and a sale of SONGS could be worth tens of millions of dollars to Perry. His attorney is Doug Davis.

Charlie Walk has had a dramatic impact on the success of the Lipman brothers’ Republic for the last several years. Loud rumors have Walk looking to make a change sooner rather than later for a shot as a major-label CEO or the opportunity to head his own label. He’s a 24/7 workaholic who has been breaking acts at an incredible pace and has recently signed some of that talent as well. Does he play out his current contract before making the next step, or is there a deal that enables him to get paid what he wants as part of a new deal inside the Republic umbrella? Allen Grubman represents Walk.

Aaron Bay-Schuck, who has shown himself to be a top identifier and signer of talent in his current role as Interscope President of A&R, is supposedly being heavily courted by Max Lousada for a return to WMG. Bay-Schuck followed John Janick from Atlantic to Interscope, and the two are great friends as well as effective collaborators, causing some to insist that this is one of the least plausible rumors out there. Nonetheless, it’s certainly possible that Lousada and WBR chief Cameron Strang would choose to pursue Bay-Schuck to replace Dan McCarroll as President/A&R head—or is there possibly something bigger in the wind? Bay-Schuck’s legal affairs are handled by Aaron Rosenberg.

Part One, "The Evolution of Moneyball"

DUO TO RULE ISLAND
Two heads are better than one. (6/18a)
GUETTA GOES GLOBAL WITH WARNER MUSIC
Bugs is dancing in the street. (6/18a)
REVENUE CHART:
LIL BIG BUCKS
Pull up the Brinks truck. (6/18a)
TOP 20: POLO MATCH
Looks like we have a horse race. (6/17a)
MUSIC’S HOTTEST FIRMS: GREENBERG TRAURIG
Myriad lawyers, no waiting. (6/18a)
RHYTHM, BLUES AND THE FUTURE
The musical tapestry we know as R&B.
WHO'S NEXT?
Predicting the next big catalog deal.
JUST THE VAX, MA'AM
Once we all get vaccinated, how long before we can party?
WORLDWIDE GROOVE
How is globalization bringing far-flung territories into the musical mainstream?
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