Breaking Down The Biz Part 1/3: Hit Men by Fredric Dannen

This is part one of a three-part series of reviews, or at least summaries of books that document the history of the music industry from the 1950s up to the present day; intended, as the books are to be educational, informative and laced with my personal take. Take it for what it’s worth and hopefully you get something out of this.

It’s one thing to know the ins and outs of the music industry, a vast, twisting maze on a swath of land with continuously shifting fault lines. There’s an unending abundance of information on the internet about the various kinds of royalties and licenses, how publishing works, what certain record contracts entail and how to establish a social media footprint as solid as your following in the real world. As the industry keeps changing at an incomprehensible pace, more artists turn toward indie and DIY ventures and labels try desperately to keep up, an old wisdom comes to mind: you’ve got to know where you’ve been to know where you’re going.

Such is true of the music industry as it is with life in general. While trying to comprehend where the industry is now and where it’s heading, one should also get a clear picture of what the business used to be in its glory days, and what many still imagine it to be. This is the purpose a classic, controversial book like Fredric Dannen’s Hit Men: Power Brokers And Fast Money In The Music Business serves; though instead of a glittery caricature of the industry in its prime, the book plainly describes the dirt, grime and slime of one of the biggest cogs in culture, ranging from bantam-league payola to clear-as-day Mafia infiltration.

To understand the breadth of the tale being told, it pays to go right back to the beginning. Not quite Tin Pan Alley back, but right after World War II when the U.S economy was soaring and the record took off alongside the ever-expanding record industry. In the late 1940s and early 1950s, much of the popular musical landscape revolved around easy-listening crooners and swinging jazz cats, a craze centred in New York City and heartily taken up by the beatniks of the era. One of the more famous New York jazz clubs to this day is a place called Birdland, a hang started in 1949 by brothers Irving and Morris Levy among others to counter the far more influential Bop City club at the time. Morris went on to found Roulette Records a few years later, though his professional practice in the industry was not as legitimate as it seemed on the surface. For starters, he earned the distinction over time of being a notorious swindler, often writing his name on the credits of his artists’ songs to scalp a greater royalty percentage. More notably, he was a longtime associate and business partner of the Genovese crime family, later serving as the inspiration for the character Hesh Rabkin on The Sopranos.

Around the time Levy founded Roulette, rock and roll exploded as a musical phenomenon in America. One of the men most responsible for the growth and expansion of rock and roll was an Ohio DJ named Alan Freed, who ended up crossing paths with Levy and went into a managerial agreement with him. Eventually their business relationship ended over Freed misusing his stake in Roulette, but what brought about his demise was the historic 1960 scandal that accused Freed and others of payola, i.e taking money and other bribes to play songs on the radio and lead to the practice being criminalized. Levy, though taking some heat by association for his connection to Freed continued forward with Roulette; Freed never recovered and died by the bottle.

Despite catching commercial wildfire, rock and roll was an art form largely released and distributed by independent labels such as Chess Records and Sun Records, who would eventually be swallowed up by majors like RCA Victor once the genre gained enough steam to be reliably profitable. CBS Records, despite being one of the biggest record companies in the business didn’t so much as bat an eyelash at rock and roll well into the 1960s despite the inescapable frenzy of the British Invasion; the closest thing they had was Bob Dylan on Columbia Records who tried more than once in that decade to leave and go elsewhere. Many major companies were unconvinced about rock, in CBS’ case it had much to do with the fact that Goddard Lieberson, the company head at the time was a high-society personality with far more of an inclination toward symphonies and musicals than the tastes of the young. That changed over the course of the decade as a youthful Clive Davis came to Columbia from private practice, climbing the corporate ladder and suddenly finding himself at the legendary Monterey Pop Festival in 1967. 

Having been exposed to the counterculture at its peak and the music that came of it, Clive, much like his counterparts at Warner Bros. went full tilt in scooping up as many of the young, trippy and immensely talented acts of the period as he could; most notably Big Brother And The Holding Company after watching Janis Joplin’s legendary performance. Profits and sales soared at CBS and rock became a lucrative industry item, turning it more and more into an album format a la Sgt. Pepper instead of a simple vehicle for singles. Clive’s hot streak as president of Columbia allowed him to cultivate his ear for talent and set the beginning of his legacy as a renowned record man, though his detractors at CBS often described him as massively egotistical and stingy with credit. 

By the early 1970s, the counterculture burned out, leading idealism among America’s young to give way to nihilism and hopelessness. However, rock and roll, like many aspects of the counterculture became commercially co-opted by the mainstream even as the revolution faded away, and it was making the music industry a pretty penny in the process. By now, the six “majors” were either in full power, largely thanks to rock or beginning to blossom; CBS, Warner Bros., MCA, PolyGram, Capitol/EMI and RCA. Warner, as one such example, had acquired Ahmet Ertegun’s Atlantic Records in 1967 and hit big with the likes of Led Zeppelin, snatching up Jac Holzman’s Elektra Records 3 years later which merged with Asylum Records, headed by a young David Geffen. Amidst the biggest executives however, Clive Davis reigned king, much to the chagrin of those less devoted to him. Soon, however they would get their wish in seeing him disappear, but it was not in a way that would leave them unaffected.

13 years after the first U.S payola scandal ruined Alan Freed’s professional life, CBS found themselves in a legal quagmire with Clive Davis at the epicentre. Clive had on one hand extracted a sizeable amount of money from CBS and put it towards illicit personal expenses, using his right-hand man David Wynshaw to file bogus invoices to the company. On the other, he had set up a distribution deal with R&B labels Stax and Philadelphia International, the latter of which was backboned by Kenneth Gamble and Leon Huff who despite their success (or consequently for doing so) both used payola to gain spin for their records on radio. The former impropriety was compounded by Wynshaw’s ties to Genovese gangster Patsy Falcone, who was running an international heroin ring at the time; the latter by Gamble’s association to Kal Rudman, an independent promoter who took money from labels to plug their records and advertised the country’s top hits in his Friday Morning Quarterback publication. 

Given the circumstances, Clive got the boot as anyone knows, though he would soon re-emerge as head of Arista Records. However, CBS would spend the mid-1970s with the Newark investigation over its head, during which time Goddard Lieberson briefly returned as CBS Records president before leaving and dying of cancer. Thus came a changing of the guard of CBS brass, first with TV executive Irwin Segelstein briefly taking over Columbia, but more significantly with the rise of two men who had been lifelong friends and entered and climbed the ranks of CBS from their initial jobs as barristers. One was Dick Asher, who having briefly left CBS for Capitol then returned and saved CBS’ UK division took charge of the company’s International arm. The other was Walter Yetnikoff, who having been the previous occupant of the International position took Lieberson’s spot as head of the entire CBS Records group, consisting of both Columbia and Epic Records.

Walter is indisputably the star of Hit Men, and with good reason (though he has publicly rebuked the book and its author). Formerly a quiet type, Walter quickly morphed into an aggressive, power-hungry but nevertheless entertaining madman who had a penchant for rage and wore his Jewish ancestry on his sleeve. While his approach made him a nuisance on a corporate level, his artists loved him for it, far more than they did the level-headed Dick Asher. Looking to earn his stripes as a leader, he came to the forefront by engaging in an artist-stealing war with Mo Ostin of Warner Bros. Records, snatching James Taylor only to lose Paul Simon in return. The effect was a shift in the business model of CBS and a large part of the industry towards snagging big artists and cutting bigger deals rather than prioritizing development and A&R. Ultimately, it made the industry a costlier and less creative place to be.

Indeed, musicians and music men alike took a sharp turn towards complacency, hedonism and excess in the 1970s (with punk rock being a short-lived but disruptive exception), quite parallel to society itself at the time. In no way was this more apparent musically than with the disco mania that held America captive through much of the decade, spearheaded by one Neil Bogart and his label Casablanca Records. Formerly the head of a company called Buddha Records before breaking off to start Casablanca in 1973, Bogart signed Kiss as his first act then dived into an unfruitful distribution deal with Warner before going it alone. He then signed the likes of Donna Summer, Parliament and The Village People to consolidate his dance music empire along with his massive rock reach with Kiss, leading to a corporate and personal lifestyle of epic and extravagant proportions. 

Eventually Bogart would team up with the European PolyGram who had strategically failed to make a dent in the American market. While Casablanca continued its success into the late ‘70s, another PolyGram label, RSO, hit the lottery with the soundtracks to Saturday Night Fever and Grease. The astounding success of the soundtrack albums and the hype and excitement that followed blinded PolyGram and co. to the fact that they were just that– soundtrack albums, cashing in on a fad. By 1979, not only did disco suck, it was sucking money out of PolyGram. Promotion fanatic Neil Bogart had spent himself into the gutter by ingesting and supplying drugs to his employees, lavishly decorating the Casablanca office and flooding the market with supply where the demand did not match. All that combined with PolyGram’s tragically short-sighted expansion and major labels’ overindulging in the disco craze lead to the inevitable crash of the genre and an economic slump for the entire industry. Bogart died a few years later, and nearly took PolyGram with him before he did.

Coming into the ‘80s, another factor had emerged that eventually proved to be a thorn in the industry’s pockets, one central to the story of Hit Men: Independent promotion, specifically a team of freelance promoters dubbed “The Network.” Indie promotion was nothing new and more effective than using a regular plugger, but over the course of the 1970s the money shelled by labels over to the Network, most prolifically promoters Joe Isgro and Fred DiSipio had skyrocketed. CBS and Walter Yetnikoff were the biggest users of the Network, seeing the high price as other major labels did as a means for smaller labels to be priced out of the game. Dick Asher, who was now deputy president of CBS did not feel the same; not only vocally defying the practice but taking action against it with his attempt to promote Pink Floyd’s “Another Brick On The Wall, Pt. 2” on Los Angeles radio without indie help. The result? While the rest of the U.S caught Floyd fever off the song, L.A, a city soon to host a concert from Floyd itself, heard not a lick of it on radio. When CBS plugged it with the Network afterwards, it went into heavy rotation.

By 1981 a number of labels saw it necessary to shake the Network to save their profits, with Warner leading the way in a boycott. Dick Asher of course was out front in leading CBS to drop indie promotion, leading to the potential chart success of “Turn Me Loose” by CBS act Loverboy being sabotaged in retaliation. Despite what the indies had cost the majors, it was outweighed by the fact that their commercial profits were suffering without them. Warner promptly caved, as did CBS and all the others; CBS’s Epic label had by that point underhandedly resumed indie promotion by listing the expense as “tour support.” Epic and CBS writ large struck big with Michael Jackson’s Thriller the next year and turned around their financial slump, nevertheless they still saw it necessary to use the Network to assist what was already an astronomical success on its own. None of this was disconnected from Epic’s promotion director Frank Dileo being stalwartly pro-indie and becoming Jackson’s manager in 1984.

The success of Thriller had everyone wanting to get in on it, even those outside of CBS: New MCA chairman Irving Azoff was listed as a “consultant” to the Jackson brothers’ Victory tour; at the same time he was locked into a three-way agreement/conspiracy/war/etc. with Yetnikoff and David Geffen, who now ran Geffen Records over Boston’s long-delayed third album which ultimately came out on MCA. While Walter ritualistically continued to engage in feuds and quagmires, Asher was cutting costs and turning CBS around, much to the distaste of Walter as it was not his doing. Asher was rewarded in the end for his perk-slashing and bucking of the Network: he was fired, taking a job first at Warner and then later at PolyGram, rebounding them as well from their disco snafu through specializing in 80s metal and rock. 

By the mid-1980s, the cost of the Network had again become an issue for the major labels, including Irving Azoff even as he would continue to use them. A board meeting was thusly assembled between the label heads to vote whether the RIAA (Recording Industry Association of America) should investigate the Network for payola. Many voted in favour, but an unanimous vote was needed and did not come. Chief among its opponents of course was CBS and Walter Yetnikoff. Not only had the Network benefited him greatly despite the cost, he had already been concocting plans to have Networker Fred DiSipio and executive Tommy Mottola start a label called Empire under CBS, represented by non-combative company man Allen Grubman on the legal front.

Even as the proposed investigation fell through, NBC News at last gave the labels an excuse to rid themselves of the indies by documenting the Network’s payola activities along with DiSipio and Joe Isgro’s ties to John Gotti and the Gambino crime family. At the same time however, the microscope came down on MCA for its employment of Genovese mobster Sal Pisello who had worked with Roulette’s Morris Levy in an extortion racket to sell cutout (highly depreciated) records.

Pisello and Levy, along with DeCavalcante family underboss “Corky” Vastola for an assault related to the case were eventually convicted, Levy died however before he served any time in prison. In the meantime, the NBC investigation had gravely damaged the Network and brought down massive heat upon Isgro and DiSipio for their involvement. Isgro continued to work on a far less flashy scale before litigation caught up with him, doing indie promotion for smaller independent labels and taking money directly from managers and artists instead of the companies themselves; turning independent promotion into an expense recoupable by the artist instead of the label. He also went on a crusade to sue most of the majors for the destruction of his enterprise, though the suit was ultimately thrown out and he was indicted along with several cronies in the late ‘80s. 

Amazingly, the long-awaited payola case, which contained days of damning testimony from several witnesses was thrown off the rails by the presentation of conflicting statements made in a separate trial by a Network associate who had turned state’s evidence. Citing the nondisclosure of the statements as malfeasance on the government’s behalf, the defence effectively weaponized the scandal that erupted and the trial was thrown out. After repeated federal blunders, it was seemingly written in stone that the top men of the music industry were above the law.

At the same time the Network faced its fall and trial, Walter Yetnikoff was setting up to make a major, career-shifting move that would greatly increase his salary. Noting that Larry Tisch, who had recently replaced CBS President and CEO Thomas Wyman had a habit of thinning a corporation down to its absolute essentials, Walter negotiated with him to sell CBS Records off in 1986, eventually finding a suitor in longtime partner Sony. Sony was all for the deal, though the prospective deal faced a number of setbacks and failures including the 1987 stock market crash. Eventually the sale was completed and Walter’s earnings increased ten-fold, finally hitting the “big score” he had been yearning for. 

Not soon after had the celebration subsided than Walter checked himself into rehab for a longstanding drinking problem; ironically when he returned newly sober he became even more erratic than before. This was most evident in his both his behaviour while negotiating to acquire Columbia Pictures and in the deterioration of many of his professional relationships, not to mention vulgar remarks made about David Geffen as Geffen, who had by then sold Geffen Records to MCA was attempting to steal Michael Jackson from Walter. In any case he was first told to clean up his act by Sony brass and then shown the door soon after in 1990. CBS post-Walter turned into what is now the second-largest music conglomerate today, Sony Music Entertainment (SME), and a new era began. 

Ultimately, the chain of events and cast of characters chronicled in Hit Men is an excellent and entertaining resource for any artist, industry official or general music enthusiast who really wants to know the ins and outs of what the business was like at its peak. As mentioned earlier, it’s important that one gets an authentic grasp of the industry’s past to comprehend its present and future. The truth is, it wasn’t all gold and platinum, at times it was more silver or lead. It’s no secret that many music industry execs have been greedy megalomaniacs and crooks, an archetype that negatively colours the business to this day. Still, perhaps things have changed for the better since the early 1990s for all the parties involved. Part 2 will determine if that is indeed the case.