Tommy Mottola Faces The Music (March 2 2003 issue)


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Tommy Mottola Faces The Music

From the March 3, 2003 issue of New York Magazine.

Why was Tommy Mottola–the industry's most flamboyant mogul, and one of its most powerful–pushed out of Sony's beleaguered music division and replaced with NBC head Andy Lack? The real story behind Sony’s musical chairs.

By Phoebe Eaton

Buried under nineteen inches of snow and duct-taped into submission by terror warnings, New York was in a glum mood for the Grammys, back in town–APPLAUD NOW–for the first time since 1998. The Madison Square Garden festivities would be televised on CBS in prime time, punctuated with performances by such Sony money-spinners and award nominees as Bruce Springsteen, Ashanti, and the Dixie Chicks.

But this year’s Sony party, held at the barnlike Hammerstein Ballroom nearby, stood to be conspicuously downscaled from the red-carpet extravaganzas of the not-so-distant past. Sony’s Grammy soirée had been second only to Clive Davis’s big-shot-heavy bacchanal. But no more. Maybe because nobody expected to run into the party’s recently deposed host, Sony’s pinky-ringed music man, Tommy Mottola.

On January 9, Sony had faxed around a press release: The chairman and chief executive of Sony Music, Tommy Mottola (or Thomas D. Mottola, as he preferred to be known in the newspapers) would be leaving to launch a new venture. He’d been thinking about making a change for some time, it said, and while it’s true he had a couple years to go on his contract, Sony had suddenly, graciously agreed to spring him.

Ever the diplomat, Sony America’s avuncular head, Sir Howard Stringer, saluted the outgoing Mottola as “an icon,” but there was no disguising the fact that the best-known and most flamboyant executive in the music business was out in a force play.

Indeed, with the business swiftly changing, the swagger had gone out of Mottola’s step. He’s a man who’s always made a point of being larger-than-life, one of those old-line music guys who passed out perks and took them himself. On the road to becoming what he would call “gigantic, global superstars,” Mottola’s charges might be rewarded with vacations, cars, Rolexes, liposuction. Sony even picked up the check for Celine Dion’s Fiji honeymoon.

But the company’s numbers were down–it lost $132 million in the first six months of its current fiscal year–and industry-wide, album sales have dipped 11 percent from 2001. The music business was being hijacked by Internet file traders, and Mottola was losing sleep over Sony’s ebbing market share.

And now more people were looking over his shoulder: There was little love lost between Mottola and Stringer, who in Mottola had an under-boss immune to his courtly charms. Because in the runaway republic that was Sony Music, it was Tommy Mottola who ruled, not Sir Howard.

“Tommy wouldn’t kiss Stringer’s ass,” says one business associate of Mottola’s.

When times were good–and there were years when Mottola’s ghetto divas and gilded thrushes saved Sony’s bacon–Stringer could swallow his annoyance. But with the music industry’s fortunes sagging, laissez-faire turned into Let’s have a look, shall we? Wanting answers, Stringer typically had to troop down to Mottola’s thirty-second-floor office, where the shades were always drawn.

“I think Tommy is one of those guys who hated having anybody as his boss,” says one executive who knows them both. “Tommy didn’t want anybody messing with him.” Finally, say those who know Stringer, he found it hard to stomach a diet of constant disrespect. “Howard was having to read about developments on the music side in the newspaper,” says a source close to Sony. “That was embarrassing.”

The announcement of Mottola’s successor clocked in a bruising 24 hours later: Andrew Lack, 55, the president of NBC and a friend of Stringer’s since their days at CBS’s documentary-film unit in the seventies, was the new suit the likes of Pearl Jam would be reporting to. Lack was certainly an interesting choice, the press relentlessly finger-wagged, since he had no experience in the music business.

An artful manager of those who always remained convinced they were managing him, Lack had nevertheless been outmaneuvered in a power tussle with network chairman Bob Wright, who some say was prodded on by his wife, Suzanne, known to certain network spectators as the Nancy Reagan of NBC. And just as he was pulling the rip cord on a job he’d ascended to less than two years earlier, his old boss Howard Stringer was only too happy to come pick him up.

Tommy Mottola was a man who wore his feelings on the sleeve of his suede safari jacket, passionate about his work and keeping his grand and gaudy life but still able to put everyone at ease with a self-deprecatory script. Artists and underlings found in him a father figure–albeit one who demanded utter loyalty.

Even his enemies concede that Mottola worked 24/7, and when he wasn’t on the phone–sometimes he’d call employees at eleven at night expecting to talk shop–he was in the studio making records with his artists. Like RCA’s Clive Davis, he was a diva-maker who knew how to Svengali women onto the Billboard charts.

Under Mottola’s watch, Sony had signed the Dixie Chicks, Destiny’s Child, Michael Bolton, New Kids on the Block, Shakira, Mariah Carey, Ricky Martin, Celine Dion, and Jennifer Lopez. And he was the most aggressive executive in pushing American acts outside the U.S., sometimes tripling the money he made on his artists.

With the rising prices of marketing and promotion–it cost him $1 million to launch a new artist who could only really break even if 1 million albums sold–Sony’s future depended on hits that came fast and furious. And those numbers became a lot harder to make when teenagers started to rip the tunes for free off the Internet, the asteroid whose impact would mow down the free-spending dinosaurs.

When Mottola left Sony, Stringer was telling people that his departing squad leader’s personal overhead, including travel and expenses, was $10 million a year. Of his five full-time assistants, three were making $180,000 a year. Employees got expensive gifts for Christmas, like $550 Gucci bags.

“Sony was a real oligarchy,” says one longtime executive. In the old days, the oligarchs commanded their own lobby elevator. But then the elevator was requisitioned for the public and a freight elevator was drafted to whisk Mottola, his right hand, Michele Anthony, and Columbia Records chairman Don Ienner up from the garage. In their contracts, members of Mottola’s inner circle–which included Ienner, Anthony, Epic Records chairman Dave Glew, Epic Records president Polly Anthony, and Mel Ilberman, Sony Music’s 75-year-old vice-chairman and bookkeeper–were guaranteed a driver with a leased top-of-the-line Mercedes.

Mottola also had a Monopoly-board hunger for real estate. A Balinese-style villa Mottola built in Miami for himself and his third wife, Thalia, a 31-year-old Mexican singer and soap-opera fixture, was the latest in a succession of sprawling homes he renovated or built for himself. The $4 million property on Star Island, a private enclave with a guarded gate, has indoor and outdoor pools, horses, and a library. Mottola’s luxe townhouse on the Upper East Side was purchased for $13.3 million from David Geffen in 1999 and was tricked out with such niceties as a perfume refrigerator for his wife. “Tommy has an addiction to buying lavish, enormous places, overpaying for them, putting millions and millions of dollars into them, most often with good taste, showing off with them,” says a friend, “and then when they’re finished, he suddenly realizes they’re too big or too expensive.”

Indeed, his townhouse went on the block in November for a blistering $27 million. He has already lined up its successor, a more modest $9.25 million, 5,000-square-foot condo in an unspectacular building whose redeeming feature seems to be its great views.

Mottola also has a customized bulletproof car with a driver on standby; he said he needed it in case there was another terrorist attack. And he usually travels with a full phalanx of bodyguards. Why the obsession with security? At times in the past, Sony has had urban-music labels with rappers who’ve been busted on gun charges. “But I think it’s more like he got used to these guys opening doors and carrying his bags for him,” says one Sony executive, shaking his head. Says another who worked with Mottola, “He wanted to show he was separate from the pack. He had a disdain for his peers in the music business. There were only a few who mattered–RCA’s Clive Davis and Universal’s Doug Morris.”

And his executives felt similarly entitled. “The Tommy clique really loved power,” says one former employee. “They had this whole thing that they were untouchable.” The upside is that the company was admired for the lengthy tenures of its executives. “When you can assemble a strong team that can deliver year after year after year, as Tommy did, it gives the artists confidence that they’re signed to a winning team,” says Arista Records chief L.A. Reid.

On the downside, one executive who’s known Howard Stringer for years says Stringer told him Mottola ran his team like a little Mafia family. And loyalty to the dysfunctional famiglia was prized. Another insider remembers sitting with Stringer last year in the Sony Club dining room when Michele Anthony walked past the table. “Tommy will know about this lunch in fifteen seconds,” Stringer said under his breath. The senior management team were like brothers and sisters, squabbling with each other over credit, spying on each other, knifing those who might presume to trespass on their turf. There were two dads, Tommy and Mel Ilberman. “He’s Tommy’s brains,” said one executive. “It was like that character Master-Blaster, in Mad Max Beyond Thunderdome,” a dwarf genius who rides a giant brute of a man like a chariot.

If there was an unflattering leak to the gossip columns, Mottola himself would browbeat the suspects. People in the company believed he was reviewing phone records. He would sometimes hire detectives to check up on artists who were litigious with the company–most famously Michael Jackson.

But there were also the sanctioned leaks to the press. When Mottola divorced pop star Mariah Carey and she was negotiating her release from the Sony label, items ran in the press about his ex that Carey wanted dusted for Mottola’s fingerprints: Mariah was feuding with fellow Virgin Records artist Janet Jackson. Mariah threw a salt shaker at Mira Sorvino. Tommy was now training a 16-year-old singer who could be her next serious rival. Carey almost sued Mottola and Sony after it appeared that he arranged for some music she was using in a single from her first film to debut on a Jennifer Lopez album six months earlier. “He had an emotional response to her leaving him,” says a source close to Sony, “but she would call him after her crack-up for advice, and he would be there for her. He still holds a little bit of a candle for her.”

He told a friend he had a brief post-Carey fling with Jennifer Lopez, who records for the Sony label (Lopez has denied the two ever had a relationship). And then Lopez went and fell in love with Sean Combs. “He was bad-mouthing Puffy all over town,” says a longtime friend.

“When Tommy has it in for somebody he can be unbelievably petty. He’ll call maître d’s to make sure people aren’t given tables,” says an acquaintance. Mottola’s tactics were often brass-knuckle, but those who’ve known him for many years describe him as a gangster groupie who purposefully adopted the shiny-suited look of a Mafia lieutenant. “I think he created a persona that came back to haunt him when he needed to appear presidential,” says a source close to Sony.

After taking over as head of Warner Music in 1995, Michael Fuchs remembers being invited to lunch at Mottola’s sprawling house in Bedford. Fuchs asked Mottola who was the biggest influence on the house. “But I think he misheard the question,” says Fuchs. “ ‘The biggest influence on my life, everything,’ he said, ‘was Morris Levy.’ Morris Levy was the godfather of the music business!”

Morris Levy was a nightclub impresario and record-label founder with ties to the Genovese crime family who eventually wound up in prison for conspiracy to commit extortion. Mottola had spent some time with Levy in the seventies when they both had farms in Columbia County. A frequent house guest at Levy’s was Father Louis Gigante, a priest and the brother of the stubble-cheeked, bathrobe-wearing mobster Vinny “Chin” Gigante. Mottola says he has optioned Father Gigante’s life story for a film.

In many ways, Howard Stringer is a perfect executive for a Japanese corporation, understanding procedure while recognizing that it often pays to be nonconfrontational. Stringer is considered a tough, savvy businessman who doesn’t drag his ego around like a hunch on his back. He remembers names and what people do. He is big and capacious, and his frequent hugs are bear hugs. He is intensely intelligent and athletically sociable, and his off-the-cuff remarks at testimonial dinners or Davos have an eminently British quotability.

At first, Stringer made an effort to kindle a relationship with Mottola by inviting him out to lunch and dinner. He also tried to speak with him weekly. “But Tommy was just not responsive on those levels,” says a source.

It bothered Stringer that Mottola would never observe pooh-bah protocol by inviting him to the Grammys. A Sony employee remembers seeing Stringer at one Grammy party taking a group of people over to sit with Mottola and Mottola signaling his minions to close ranks because he didn’t want Stringer sitting there. Mottola was known to refer to Stringer as “the buffoon” in private.

Stringer was also given mediocre seats at Sony-artist concerts, and backstage passes were usually out of the question. “Tommy never wanted Howard at any event. He didn’t want him near the talent,” says one former employee. Stringer’s younger brother Rob started at Epic Records before Stringer even came on at Sony, and had become the well-respected head of Sony Music U.K.

“Howard used to call Rob and go, ‘Why the f**k am I dealing with this guy?’ ” says a friend of Rob Stringer’s. “ ‘Why the f**k are we paying this guy? Tell me what this guy does. Tell me what this guy does. Tell me what this guy does.’ ”

There was always chin-stroking over whether Mottola’s presence in the gossip columns–which charted his life on the Bedford—Da Silvano—St. Bart’s axis, his succession of pop-star wives, and his occasional tangles with the talent–tried the patience of the Japanese. “They were displeased,” confirms one observer. But as long as Mottola was making money, the Japanese left him alone. Mottola had managed to stay in reasonably good odor with Sony Corporation’s former chairman Norio Ohga. But Ohga was succeeded in 1995 by managing director Nobuyuki Idei. “Idei is not impressed by flash,” sniffs one source close to Sony.

It has always been a company joke at Sony about who has to schlep to Japan for meetings, especially since the Japanese have a propensity for calling management meetings on holidays, or on September 12 this past year, when no one wanted to step on a plane. Still, says a source, “we go, and Howard goes, too.” But Mottola would go to Japan only when he was personally invited by Idei. That he hadn’t been there in many years was meaningful to the green-tea-leaf readers. And then the numbers caved.

“When business isn’t going well, suddenly you can’t treat your bosses badly anymore,” says one executive. In the early summer, Stringer started telling people he was letting Mottola go. The Japanese had finally tired of Mottola, he said. “In every board meeting, they were brutal and they were critical and they were demanding results,” says a source close to Mottola.

But sending him on his way wouldn’t be so easy. Sony, which paid Mottola as much as $20 million a year, with bonuses, didn’t want a rerun of Clive Davis’s long good-bye at Arista Records, in which Davis kicked up such a ruckus in the newspapers that BMG was compelled to hand him $150 million to go start J. Records.

Two years later, BMG bought him out of J. Records and merged his label with RCA Records, handing him a new five-year contract to run the whole thing. Says a label head at a rival company, “It’s like, pay him to leave, pay him to stick around, and then pay him even more to come back.”

Attempting to ensure a smooth transition, Sony is negotiating with Columbia Records chairman Donnie Ienner to oversee both Columbia and Epic records. “Ienner runs the place like Tito ran Yugoslavia,” says one rival-label head. “But he’s very proven.”

Last summer, two years before Mottola’s contract ran out–not long after J. to tha L-O! hit the Billboard top ten–he announced he wanted to begin talks with Sony; Stringer & Co. stonewalled as they secretly shopped for a replacement. Friends say it was a frustrating and embarrassing period for him.

A source says that ultimately, Sony bought out Mottola’s five-year contract, and threw in a bonus. “He probably made more this way than if he’d stayed,” one Sony source observes.

'I’m not sure why he wanted to do it,” says talent manager and former MCA head Irving Azoff. He’s pondering why Andy Lack, whose music credentials are mostly that he’s a big Eagles fan and friend of Don Henley’s, took the Sony Music job. “But if you knew Andy and if you knew Howard–and I do–you’d think this had a real shot at working. It’s a bold choice.”

Others are less sanguine about the appointment. “They’re treating the music business like it’s widgets,” says R&B mogul Andre Harrell, his voice freighted with skepticism.

“Andy’s got an ability to negotiate with talent, and there are going to be some very different negotiations that are going to be taking place,” says ex—Sony board member Pete Peterson. The revolution Sony expects to lead is going to demand new kinds of relationships with talent, distribution, media, and manufacturers. There is also talk of new ways to compensate artists. People in the business call Lack’s appointment the triumph of the suits. But Lack has defenders.

“The fact that someone puts on a suit every day does not automatically mean that all creative ideas fly out of his head,” says Strauss Zelnick, a former studio executive who resigned from BMG in 2000 after five tension-filled years. “I mean, who’s a suit? Barry Diller wears a suit to the office. We should all aspire to be that kind of suit.”

NBC News anchor Brian Williams concurs. “I’ve read all the clips on the skeptics who wonder how Andy is going to translate his skills,” he says. “He had no experience here as a news-division president and he was handed an enormous budget and an enormous task–taking the news division from No. 3 to No. 1. Which he did. I have never doubted for a second that he will be successful at Sony.”

Andrew Lack was always one of the more creative executives in the news business–sometimes to his detriment. An adman who’d worked on the Crest and Charmin accounts, Lack landed on CBS Reports in the late seventies, where he befriended a young Welsh writer-producer named Howard Stringer.

“Stringer always thought of Andy as his No. 1 weapon for popularizing the network documentary,” says someone who worked with both of them. “He would always hold up Andy’s work as the way we want to go.” Stringer and Lack had a Thursday-night poker game: “Your status at News was determined by things like that. Those who were in were in. Those who were out were dead,” says the source. There were people at the table who thought Lack would sometimes lose deliberately. “He was the schmoozer of all schmoozers,” says a former co-worker.

“Andy was always very Hollywood” is another trait people like to cite. Lack first won notoriety as the creator of an early newsmagazine show called West 57th, often described as breakthrough and before its time–and also as the beginning of the end for network news. Scored with boomerly jazz and alive with hyperkinetic montages, West 57th aimed to be a TV version of Rolling Stone, serving pop culture with its politics.

It was Bob Wright who appointed Lack to head up the news division. And things did go well during Lack’s stewardship. Lack got the $15 million street-level Today show studio built. When he took over at NBC News ten years ago, it was losing $100 million a year. By the time he was elevated to network president, he’d coordinated efforts to put the news division $250 million in the black. And when Lack left the network, NBC had the No. 1 morning program, the No. 1 evening program, the No. 1 Sunday-morning program, a successful and profitable newsmagazine, and a cable channel, even if some believe Lack didn’t have the big job long enough to make an impact there.

It was hard playing second fiddle to Bob Wright. Over Wright’s objections, Lack had been hired by Jack Welch as Wright’s putative successor; Welch’s and Lack’s wives were also close. Lack had been promised a bigger role, as everybody thought Wright would recede at NBC when Welch retired. Only Wright wasn’t ready to fade to black. And his wife, Suzanne, liked her job as First Lady of NBC. After all, the Wrights’ boat is named The Peacock. “Suzanne Wright thinks she’s the co-chairman of NBC. She uses the we word,” says a friend.

“Suzanne Wright got tired of hearing that Andy Lack did this and Andy Lack did that,” says another source. Wright and Lack’s relationship soon frayed beyond repair. Bob Wright, who had hired Lack all those years ago, was now trying to fire him. But he was overruled by GE’s chief, Jeffrey Immelt. “Andy grew increasingly isolated,” says a source. “Everybody clearly got the message that you don’t say nice things about Andy Lack if you want to be in the good graces of Bob Wright,” says a source close to NBC. “Bob Wright would always ask people the question very overtly: ‘Does anybody know what Andy does? What is Andy doing with his time?’ ”

There are those who believe that Wright’s annoyance with Lack impacted the fortunes of MSNBC, which Lack started and which remains a valuable asset in spite of its ratings. “A few years ago, MSNBC was the rising star in the news world, and now it’s kind of an asterisk,” says a source close to NBC. “Nothing happened in that operation for two years.” There is speculation that Wright didn’t want it to look good because it was Lack’s baby. Others argue Lack simply lost interest.

A Sony executive concedes the divorce from Mottola needed to be rushed, as Lack couldn’t eject from NBC fast enough; NBCers were surprised to see him land at Sony Music instead of at Sony’s movie studios or TV operation. Lack’s reported $2 million salary will also be lofted by bonuses predicated on his turning things around, says a source close to Sony.

In his first week on the job, Lack met with executives to gauge Sony Music’s numbers for the next few quarters. Some wonder if Donnie Ienner will play well with Lack. “They’re going to go through that whole thing about how they don’t want everyone to leave,” says one ex—label head. “But then you’re going to have people working for you who you don’t trust. Andy Lack is in for some fucking ride.” “Donnie Ienner is a real street fellow,” says someone who knows them both. “Andy Lack reads books. There’s an inevitability to the conflict.”

Howard Stringer strode purposefully toward the table at The Four Seasons. It was the last Monday in January, and Thomas D. Mottola was here in a decidedly unflashy gray-on-gray sport coat and slacks having lunch in the Grill Room with Miramax’s Harvey Weinstein, discussing the the chart-topping Chicago soundtrack. “When no one believed in Chicago, and I’m saying no one, it was Tommy Mottola and Polly Anthony who came through,” says Weinstein. There was also the possibility the pair might do a Broadway musical together.

“Howard was extremely cordial with Tommy,” said Weinstein. “Howard’s manners are impeccable. I don’t think Howard is the villain in the piece.” Friends say Mottola is still in a state of shock.

As for Sony’s offer to give Mottola a label, people in the business are likening it to a studio president who gets fired and is handed a production deal. Though many have called the press-release chatter about Mottola’s getting a new Sony label a Japanesey, face-saving tactic, a source close to Sony insists a label might very well happen, citing his prowess with the divas.

But Mottola, a tough guy to the last, isn’t waiting on Sony. He immediately started working the phones, and already, the man who helped broker the Grammys’ return to New York has secured a preliminary deal with VH1 to conduct a star search with the catchy title Destination Diva. He is also most definitely going ahead with a management company. The word is that Mottola is already trying to poach major stars from their managers. Says Irving Azoff somewhat huffily, “I’ve just been told he called Enrique Iglesias, who’s managed by Jeff Kwatinetz at the Firm, and that it made Kwatinetz crazy.” (Kwatinetz didn’t return calls.)

As is his habit, Mottola also went on the prowl for some real estate, ultimately taking a penthouse office in a well-secured landmark building under renovation on West 57th Street and still swarming with hard hats. The phone rings and is brightly answered, full of hope for whatever life’s B-side might bring: “Champion Entertainment.”