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JODY GERSON: THE POWER OF BALANCE (PART 1)

Interview by Lavinthal, Beer and Glickman

Portrait photos by John Michael Fulton

Since assuming the post of UMPG Chairman/CEO in January of 2015, Jody Gerson has made a series of bold moves that have helped power the pubco to major gains—in both marketshare and creative mindshare. Gerson’s gutsy A&R and cultivation of an inclusive, entrepreneurial atmosphere have been key to that growth. She also underscores the importance of empowering women and people of color in mapping a vital future for the company.

An understanding of show biz is in her DNA; 
she grew up in Philly, where her family owned 
several clubs and drew performers ranging from Louis Armstrong and Sinatra to Richard Pryor. Young Jody had a front-row seat for this golden 
era and soaked it all in.

After graduating from Northwestern, she began her career in the tape room at Chappell Music, where she worked with Bernie Taupin, R.E.M., 
Rod Stewart and other influential creators. She then transitioned to Marty Bandier’s EMI Music Publishing, demonstrating her abundant A&R chops and becoming one of several executive stars to come up under Bandier’s purview (the two worked together for more than 20 years). She headed the pubco’s divisions on both coasts, and inked such talents as Norah Jones, Enrique Iglesias, Jermaine Dupri, Dallas Austin, Arrested Development and 14-year-old Alicia Keys. She followed Bandier to Sony/ATV in 2008, where she served as U.S. Co-President and her first signing was Lady Gaga. During her tenure there, the EMI catalog was brought under SATV’s roof. She’s also played an integral role in the careers of Pharrell Williams, Pitbull, RedOne and many others.

 We sat down with the exec for a freewheeling conversation at The Beverly Hills Hotel’s storied Polo Lounge. You have to get up pretty early in the morning to keep up with Gerson, but the coffee poured at this interview certainly helped.

Lenny: So now that you have this big job where you’re one of the people at the top of the pyramid, what does it feel like to be you?
It feels amazing. Better than I ever thought it would. Looking back on my first 2 ½ years; signing an abundance of incredible artists, having hits, changing the culture, increasing the revenue, working for Lucian, loving my staff and the company. I couldn’t imagine being happier and more accomplished. And yet, it still feels like it’s the start. There’s more to come.

When your day starts, where is your starting point?
I wake up at 5:30 because I want to be alone, and I have very little time in my day when I can. So I’ll meditate, I drink my coffee; I do either Pilates or yoga every day. I get my kids up and to the bus by 7:00. Then I head to the office.

I have standing calls with [U.K. head] Mike McCormack and Caroline Elleray, who’s the head of A&R in the U.K.; I have a standing call with Bertil David, my head of France, and Alexandra Lioutikoff, my EVP of Latin Music, and I make myself available to all of the other managing directors. Then [COO] Marc Cimino and I split up the rest of the world; he has oversight of a lot of the other countries. Every other week we have a deals meeting, so that anybody that’s bringing in deals can present them in person or on the phone. I think the challenging and exciting thing is to really be thinking every day about the global arena.

Simon: How do you characterize your leadership style?
I think of myself as a music person first, so I lead with music. I want my company to be defined by the music and by the writers we’ve signed. I surround myself with great people whom I can empower, and I inherited a lot of great people as well as some great systems that my predecessor put in place.

And that combination of great people and robust systems is important.  For example, it was always assumed that if you signed to a company, your royalties were going to be properly collected. It’s so much more complicated now—and I find more and more people are coming back to us or seeking us out for the first time, because it’s nearly impossible, if you don’t have the infrastructure and the knowledge, to collect on streaming and other new sources. It’s too complicated for anybody to understand unless you do it on a day-to-day basis. I would never call us a tech company, but if we are, we’re a tech company with experts on the ground around the world and we’re driven by a creative spirit.

Dennis: Shall we talk about female empowerment?
Female empowerment really is about empowering your people to be their best and ultimately empowering your company to be the best. It’s about creating an environment and a culture where people feel confident in themselves and their abilities and can act on that. To get the best out of people you have to run your company with sensitivity, to support people, to let them have opportunities to grow. 

You were making a leap of faith in joining UMG.
I was, and Lucian was, too. It was another act of empowerment. And the point is, that is really a two-way street. First, we need to empower women. And then, at that point, we as women need to say, “Wait, why not me?” I had to come to that myself. And I want other women to be prepared and confident to do the same thing when we give them the opportunities they deserve. That’s the bottom line.

Simon: But you’re still confronting a culture that is not only predominantly male but has all of these systemic issues. 
Yes, that’s true. Here’s the thing: in my case, Lucian has done a really great job of making sure I have a seat at the table – not only in Publishing, but I’m on the UMG Executive Management Board, too, for example.

What I’m saying is that, when women do get these opportunities, I want them to be ready to seize them.

For example, I look at my company and one of the things I’m most proud of is that there’s real diversity. In our industry, there is not enough diversity. There aren’t enough women leaders; there aren’t enough minorities. I look at my company and we’re increasingly diverse. I have many women CFOs across the globe. We run it as a meritocracy; if you’re truly open to diversity and really want the best people in every position, you’re going to have a more diverse team. I’m really proud of that.

Dennis: Do you want to talk about why you wanted to leave your previous employer?
I think I just hit a wall. My career was really with one person for over 20 years. It was amazing, but I think it was time for me to really go for it, as I said in my speech introducing Michele Anthony at the UJA. I think because of certain personal life changes it was time to go. I knew I could run a company; I just didn’t know it was OK for me to want to run a company. I’ve been thinking a lot about that. Why didn’t I do it before? I could’ve watched my peers leave companies and take on other jobs while I was being the “good soldier” and staying. I just needed to feel “empowered” to take that leap. I’m so glad that I did. And I want others to have the same opportunities that I’ve been given.

But you had been offered other opportunities in the past.
First of all, I was very connected to the artists I had signed and to seeing them through. But it’s also risky leaving a place where you’re really comfortable. As ambitious as I was, I was so caught up in the loyalty. And there was nothing wrong, I had a great situation until I realized I wanted more and I wasn’t going to get more. Marty [Bandier] was going to run the company for a lot longer, and I respect that.

Did you ever work for anyone in publishing besides Marty?
I started out at Chappell Music, where I worked for Irwin Robinson; then Warner bought Chappell and I worked for Chuck Kaye for a minute, and then Les Bider, Then I left for EMI, where I worked for Charles [Koppelman] and Marty.

Simon: When you’re looking at a writer or a writer/artist you want to sign, what do you characterize to them as the unique selling point of UMPG?
Number one, we have the best collection systems in the world. So they don’t have to worry about that—let’s just get that out of the way. We will collect every single piece of a penny that’s out there for you around the world.

Then I give them a global team. I think the mistake a lot of people make, especially at record companies, is that you have one point of contact: your A&R person. I don’t think anyone wants to sign to a company and have one person. I’ve set up a global network of A&R people that all have different relationships and tastes. I had a meeting with a producer the other day who is incredibly successful in hip-hop. That’s not why he was coming to the meeting with us; he wanted to make sure he was getting rock projects and U.K. stuff. So I really emphasize that you can utilize anybody at the company. If you want to go to the U.K., then deal directly with my U.K. office. Nobody can be proprietary at my company—not even me. As hard as that is for me sometimes [laughs].

What are the writers telling you they want?
Each writer wants something different.  They all want to be supported creatively; sometimes that means writing for the biggest artists, sometimes it means getting in the room with the best writers, and sometimes it means just being heard. 

Dennis: Can you explain why streaming economics has been harder on publishers?
Because of statutory licenses and consent decrees in the United States, publishers and societies are unable to negotiate streaming rates in a free market environment. Simply put, the resulting rates are too low and don’t fairly compensate songwriters.  Although the economics are a bit better in markets outside of the U.S., the suppressed U.S. rates sometimes set benchmarks that cut against us in other territories.

And how did it differ from the down-load business?
In a sense, the download business was straightforward because it provided a 9.1 cent mechanical royalty payment every time a song was downloaded. Calculations were simple. With streaming, our payments rise and fall with the success or failure of a music service because our compensation is generally tied to the service’s revenue.  So there is greater uncertainty and it takes a lot of streams to equate to one download purchase.

So the performance rate hasn’t changed?
Well, actually it has, and when it is applied has changed. Historically, when someone purchased a copy of a song it triggered a mechanical royalty payment. With streaming, which is substitutional for the purchase of a song, there is still a mechanical payment but there’s also a performance royalty paid. The two payments are often combined into a single, blended rate depending on territory. It’s the first time a performance royalty is triggered in the context of a “transaction” like this.  Although the rates are low, we hope to eventually make up in volume what we have lost in margin.

Is your business going to be dramatically up this year?
I can’t speak to future performance as we don’t provide guidance, but I can speak to the fact that my business is currently up for a lot of reasons. The primary driver has been streaming growth but beyond that we’re also seeing strong numbers in sync coming from the team delivering great film and advertising placements around the world.  And we’ve also seen higher performance revenue especially in the U.S.

Lenny: I keep hearing that label A&R budgets have increased significantly this year because of the opportunities and the growing market. Is that the case with your budget?
My budgets are pretty healthy to begin with, so when something comes up that I have to have, I have the support and resources to go after it. It’s just about managing my spend thoughtfully and strategically on a global basis.

Simon: I’d like you to weigh in on the sizes of deals, how quickly things become stratospheric—and making that calculus of cost/benefit when it happens so fast.
I always lead with my gut. Always. And when I feel that something is going to be massive I go for 
it and pay the price, provided it fits within the struc-
ture of the company and our long-term strategy.

The reality is that there are more well-financed publishers than ever before. The last time I looked, the NMPA Board has 18 board members; that means there are 18 publishers represented on that board. So you can’t compete simply on price.  You have to demonstrate why you are the best home for a writer or a catalog of songs.  You have to show the strength of the creative team, the experience of your executives around the world, the incredible systems you have in place, and most importantly the passion for music and the culture you have built.  If everything is equal on price, do I get the deal?  Well, I think our track record speaks for itself.

But we also have to be early. The other problem is that we grew up in a time where you didn’t tell anyone what you were doing. The new generation of A&R reps share information. If I was going to sign something no one would know until it was signed.

Dennis: Doesn’t everyone know about it anyway?
I guess, but I wouldn’t want anyone to know that I’m bidding. And that practice has helped us get a few big things over the last couple of years, where we worked very hard quietly and then surprised the industry.

But isn’t everyone bidding on everything?
Sure, but don’t you remember a time when people didn’t, and you kept things really close?

Read part two here.

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