In all the excitement, it never once occurred to PolyGram’s Dutch and German executives that film soundtracks are one-offs. Nor that Casablanca was a drug-frazzled liability that had just shipped a total of 5 million solo records from each of the four members of Kiss—a contractual obligation forced on Neil Bogart by Kiss’s managers in the hope solo projects might deter the strung-out band from breaking up. They were released the same day in September 1978 with a $750,000 promotional campaign, a four-way gamble that was the record business equivalent of self-mutilation. The average Kiss customer was never going to buy all four solo albums.
“Neil could snort a whole table full of coke with one nostril in one breath,” Henry Stone recalled of one unforgettable party during a Billboard convention. As one regular visitor from PolyGram’s distribution arm, Rick Bleiweiss, described the atmosphere inside Casablanca at the peak of its commercial success, “Music was blaring, twelve phones were ringing. You never could talk in that building. You had to shout. I think the average person walking in there would have been floored by the electricity and volume.” Down the corridor, promotions men hit an Oriental gong every time a Casablanca record was added to a radio’s playlist.
One new salesman in the company, Danny Davis, settled into his office in 1979 and could not believe his eyes. “On a Monday or a Tuesday, I’d be looking for a secretary and I’d be calling her name. I’d look all over, and there she would be with a credit card in her hand, chopping, chopping the coke on the table … I would be on the phone with a program director, and a certain party would come in. And he would run around with a fucking golf club, squashing things off my desk. And as I was on the phone, he would take a match and torch my desk. I would say into the phone, let’s say to Jerry Rogers of WSGA, ‘Jerry, gonna have to hang up now, my desk is on fire.’”
Meanwhile, on the streets of New York, disco was losing its magic as cheap imitators and tourists arrived en masse. “There was just this huge influx of people,” said Loft deejay Danny Krivit. “There were clubs opening up constantly. Everything was overflowing full. So there just wasn’t enough space—things were getting bigger and bigger. And then you start to refer to crowds as ‘Bridge and Tunnel’—people from the outer boroughs coming in. And to us, they seemed a little bit in that Saturday Night Fever vision. You know, less hip, the basic crowd—without the flavor.”
Reporting the rapidly evolving scene was a young journalist, Tom Silverman, who in 1978 started the trade publication Disco News. He gleaned his information from a nationwide network of deejays, record stores, and radio programmers. “In 1978,” he explained, “the first big station went to a disco-only format and within six months, thirty-five or forty stations followed—some in cities that couldn’t justify it. Everyone was trying to cash in on the boom. Meanwhile, all these really bad disco records were coming out: ‘Baby I’m Burning’ by Dolly Parton, and Arthur Fiedler conducting Saturday Night Fiedler.”
The first of several omens occurred in the summer of 1979 when an unknown radio deejay in Chicago announced a bizarre event. Steve Dahl was a disco hater who had recently been forced to walk out of a job when his station changed to a disco-only format. In his new job on rock station WLUP, he met a kindred spirit in Mike Veeck, son of the Chicago White Sox owner. With the approval of Veeck senior, the two deejays hatched an imaginative plan to figuratively smash the disco ball with a giant-sized baseball bat.
Calling their ceremony Disco Demolition Night, Dahl informed listeners that for the White Sox game on July 12, spectators would be admitted for 98 cents if they presented a disco sacrifice at the gate. An incredible 50,000 people descended on the stadium to see fireworks specialists exploding stacks of disco records as Dahl, wearing an oversized helmet, scrambled around in an army jeep. For thirty-five minutes chaos reigned as fans stormed the field and turned the pyrotechnics into a bonfire of the vanities. Unprepared for such mayhem, the White Sox had to forfeit the game. Outside the stadium, 15,000 rockers drank beer and chanted, “Disco sucks, disco sucks…”
Soon enough, disco was about to suck the bottom out from underneath PolyGram. Due to a combination of economic recession and disco saturation, for the first time since the 1930s, in 1979 the record industry experienced a tangible shrinkage of 11 percent. Everyone felt it. Teetering on the edge of bankruptcy, Clive Davis’s Arista label had to be sold off to German giant Ariola. The most spectacular casualty of all was PolyGram’s American distribution. “Between Casablanca, RSO, and smaller hits from Mercury and Polydor, we thought that we had entered the big leagues—there was no reason to think otherwise,” explained Rick Bleiweiss. Then came the mother of all flops, Robert Stigwood’s latest folly.
“The Sgt. Pepper film was a disaster for us,” continued Bleiweiss. “Everyone expected it to be another Fever or Grease. We tried holding back account orders for the soundtrack, but the accounts insisted on buying tons of it. It was like the last big wave of a tsunami. First the Fever wave hit, then the Grease wave hit, and then the Pepper wave came. Only this one was destructive.” From their royal boxes, PolyGram’s senior executives looked down in horror as the dance floor imploded into a flaming black hole.
It wasn’t simply returns flooding in. Over the previous two years PolyGram’s distribution network in America had tripled in size. Without enough volume to pay for the company’s huge running costs, all of PolyGram’s international profits were sucked and burned in the disco inferno. For his crimes against accounting, PolyGram fired Neil Bogart, and by the time he died in 1982 of cancer, Casablanca had been all but shut down.
Like the house lights flashing on at closing time, reality was nigh. Cutting an increasingly disheveled figure, in shuffled Bob Dylan with Slow Train Coming, a religious record produced by Jerry Wexler at Muscle Shoals. Some wondered if Dylan was undergoing Christian rehab, but the Minnesota bard hadn’t lost his sense of timing. “It might be the Devil or it might be the Lord,” he sang to a hall of record executives at the Grammys, closing a decade synonymous with self-entitlement and hedonism, “but you’re gonna have to serve somebody.” Cynics may have been smirking in their bow ties, but in time Dylan’s award added an ironic footnote to the fateful incident seven years earlier, when he chose David Geffen’s gilded asylum over Jerry Wexler’s old school.
Curiously, at the time, Mo Ostin was talking David Geffen back into the music business. Flattered, interested, and wanting more, Geffen negotiated a two-sided deal that set up his billion-dollar future. Mo Ostin would finance a Geffen-run record label through Warner Bros. Records; Steve Ross, through Warner Communications, would finance a movie and theater production company. Aged thirty-seven and very lucky not to have contracted HIV in his Studio 54 days, Geffen was back in Los Angeles to conquer the entire entertainment industry. When he was struggling to find a name for his company, his designer friend Calvin Klein suggested “Geffen Records” because “you’ll get laid more!” For additonal good luck, Geffen chose an office on Sunset Boulevard right beside where his career first took off.
“David, why didn’t you come back to Atlantic?” asked Ahmet Ertegun when he heard the news. “We could have worked together again?”
“Are you kidding?” gasped Geffen. “You’re out of it … Atlantic is finished!”
For all his talk, Geffen had also lost his feel for the times. Convinced he needed established names to launch the label, he splashed out a $1.5 million advance on Donna Summer, who, coming down off her Casablanca high, turned out to be depressed, religious, and burned-out. For the same price, Geffen then poached Elton John, also going through his own creative and commercial slump.
Geffen was still the best star seducer in the game. At the time, John Lennon had just produced his own comeback album, Double Fantasy. Hearing that Lennon was waiting for offers, Geffen outwitted all the contenders by addressing a telegram to Yoko Ono, politely requesting a meeting to discuss the couple’s musical future. “He’s it,” Lennon said, smiling at his beaming wife. With Yoko Ono acting as manager, Geff
en agreed to another million-dollar advance.
Although lukewarm reviews and slow sales greeted Lennon’s midlife comeback on Geffen Records, following his assassination in December 1980, Double Fantasy was carried away on a wave of mourning. Fearing accusations of cashing in on Lennon’s death, Geffen halted all advertising, but by then, the new label had its first profitable smash hit.
However, inside the Warner empire, Geffen’s return was not greeted with equal enthusiasm. When WEA’s international division, headed by Nesuhi Ertegun, offered Geffen a modest $1 million advance for the label’s export rights, Geffen was furious. Hall & Oates lawyer Allen Grubman heard of Geffen’s problems and positioned himself as broker in a rival offer with CBS. The timing was perfect; Grubman’s mentor, Walter Yetnikoff, operating solo, had just pitched a film-company project to Warner Communications but had been turned down by Steve Ross. Yetnikoff wanted revenge.
In a New York restaurant, slurping up langoustine and mussels, Yetnikoff agreed to license Geffen’s export rights if Grubman begged like a dog. For his finder’s fee, the flabby lawyer slumped to his knees and whined, “Plee-eeze!” When Geffen walked off with a $15 million advance from CBS, aghast Warner executives spoke of treason. The calm-headed Mo Ostin, however, remained philosophical, arguing that CBS was only supplying Geffen’s start-up with vital cash flow.
Times were hard. As the biggest-selling albums of 1980 illustrated, in the postdisco recession, the embattled majors were reverting to the hard currency of adult-oriented rock. Despite shrinking profits, CBS in particular was on a lucky roll thanks to smash hits such as The Wall by Pink Floyd, The River by Bruce Springsteen, and Glass Houses by Billy Joel. Now five years at the helm, Walter Yetnikoff was coming into his own.
It was common knowledge inside CBS’s “Black Rock” tower that Yetnikoff never arrived at work before eleven o’clock. When he did arrive, he was already coked up and smelling of vodka. Since he’d left his wife and sons for twenty-four-hour show biz action, Yetnikoff’s natural habitat was a nocturnal office visited by lawyers, sycophants, and party girls who, according to one old friend, “revealed Walter’s low opinion of himself.”
Although he wasn’t really a record man, Yetnikoff had earned a reputation as a formidable power broker and, underneath his blustery persona, a strangely endearing character whose sense of humor made up for any artistic deficit. Considering he’d endured regular beatings from his father, Yetnikoff’s rise from Brooklyn boy to Manhattan mogul had been a remarkable tale of resilience. Maybe because he didn’t take himself that seriously, yet possessed the tactical and legal instincts to play the game fast and hard, his boozy dictatorship, warts and all, lived long and prospered.
Not everyone got him, though. In the sober corridors of CBS Inc., the new, eager-to-please corporate president, John Backe, couldn’t really understand how this foulmouthed specimen had gotten where he was. Fresh into his new functions and anxious to impress Bill Paley, Backe believed the record division needed a self-disciplined technocrat to change what appeared to be a culture of overspending.
Being a former air force commander, Backe saw an ideal candidate in Dick Asher, a former marine who had run CBS Records in London and was now in charge of the international department in New York. So Asher was promoted to a potentially awkward post—serving as Yetnikoff’s deputy head, with a mandate to cut wasteful expenditure.
Studying the books, Asher quickly saw one glaring hole: so-called independents, a network of regional radio pluggers whose services could cost anything up to $100,000 per single. He found out from department staffers—and a series of damning media exposés later revealed—that this opaque system was a nationwide network headed by a certain Fred DiSipio in New York and his counterpart in Los Angeles, Joe Isgro. Suspecting a giant payola scam, Asher added up the invoices and calculated that CBS was forking out a total of $10 million to these independent promoters every year.
Then came the eye-opener. In February 1980, Pink Floyd was in Los Angeles preparing for five quadraphonic shows complete with inflatable pigs, giant animations, and a four-story wall that was built and demolished during the performance. Knowing L.A. was gripped by Floyd hysteria, Asher withheld the usual payments to local radio promotion, presuming that under the circumstances L.A. stations would play the hit single “Another Brick in the Wall.” Mysteriously, the city’s four biggest stations, with a cumulative audience of 3 million, never played the record. When Pink Floyd’s manager complained, the necessary payments were made and the radios began playing the single.
Asher was stunned. Yetnikoff was almost laughing. “I like street characters. DiSipio was one,” confessed Yetnikoff, who a few years earlier had invited the bespectacled radio promoter to Patsy’s Italian restaurant on Fifty-sixth Street. During that dinner, Yetnikoff had asked straight out if his service was disguised payola. DiSipio assured him it was nothing of the sort and he would happily sign Yetnikoff’s legal disclaimers. “If the labels had promo men who knew what they were doing, you wouldn’t need me,” argued DiSipio. “Radio is hit with so much product they need to weed. Radio knows I can weed. Radio respects me. Radio listens to me. What I bring them they play. I’m the maître d’ who decides who gets in the restaurant. Give me a hit record, I’ll make sure it’s played. I don’t handle anything but hits.”
With the recession biting, Steve Ross’s corporate supervisor, David Horowitz, began making his own investigations and calculated these indie promoters were costing Warner, Elektra, and Atlantic a total of $6 million each year. In November 1980, Billboard reported an unnamed source at Warner announcing a boycott. “The reason independents have not been dropped before now is because each company wanted the next company to do it first. The lead had to be taken by the Warner Communications labels or CBS.”
As Billboard began quizzing all the major labels about independent promotion, a picture slowly emerged. MCA was also considering dropping independents, whereas Capitol’s head of promotions, Bruce Wendall, admitted, “there’s no reason in the world I should drop indie promo men … Why should I give up one of my strengths because somebody else does?” Interestingly, Billboard also revealed that Atlantic, despite the Warner Communications boycott, was secretly continuing to use independents.
Ignoring these dissenters, Dick Asher began petitioning his superiors. In a crunch meeting with Yetnikoff, Asher wisely avoided any moral diatribes and stuck to tactical arguments. Here was a rare opportunity to break independent promoters who had grown too expensive. Feeling the eyes of Bill Paley and John Backe peering down from above, Yetnikoff yielded, though without sharing any of Asher’s zeal. In early 1981, CBS joined the boycott.
What Asher and Horowitz had failed to foresee was the reaction from artists. As red-hot records mysteriously failed to get airplay, managers began throwing toys out of strollers. As Paul Marshall, lawyer for the Boomtown Rats and Adam Ant, explained, “My kids were getting injured, and I thought Dick was wrong. I thought he was right morally, assuming there was a moral issue, because I never knew of payola. But you cannot ride a white horse when artists who are giving you your job are the ones suffering the lance.” Maurice White of Earth, Wind & Fire told Asher to his face, “Look, man, I have only one career. So don’t make me your crusade.”
“The ban was a joke,” concluded Walter Yetnikoff. “When certain songs didn’t hit, it became clear that the indie promo guys knew what they were doing. Given the fiercely competitive nature of the business, an industry-wide boycott never held … Artists hunger for hits with as much, if not more, desperation than the labels. To get around the ban, the labels—including our own—would give extra money to the artists or their managers so that they, and not us, would hire the indies. Any way you looked at it, independent promoters were in the game. If you wanted to play the game—and win—you couldn’t ignore them.”
A&M promotions man Charly Prevost recalled that despite their subsequent depiction as mobsters, in his own experience indie promoters wouldn’t take on a recor
d they didn’t believe in. It probably was an opaque system of “greasing the palm,” but Prevost always felt “these guys were record men.”
Casablanca’s number two, Larry Harris, agreed, attributing their growing power to the chart and station valuations in Radio & Records magazine. “These indie promoters were for the most part into the music and took pride in helping to break a record,” said Harris, who saw their rise in the seventies. “They all came from the industry at one point and had decided to work for themselves instead of a corporation. We had people on retainer in Chicago, Portland, Seattle, etc., who had close relationships with their market’s programmers. It was well known in the industry who was able to ‘take care of business,’ but it always bugged me that big business used bribes daily and hardly ever got in trouble, yet we were the ones who got the government on our case. What about payola in the defense industry, the drug industry? Bottom line, the indies had a great service and did it well. If you got the inkling that you had a hit, you could then spend money to bring it home.”
“You just gotta remember, it’s all done by people,” explained another seasoned practitioner of payola, Henry Stone, then the owner of several labels and Florida’s biggest independent distributor. “And people like booze, drugs, hookers, expensive meals, and nights on the town. Especially deejays.” Living by the philosophy that it takes a dollar to make a dollar, Stone’s trusted promoter, Fred Rector, would drive around the Florida stations with a suitcase full of records and money, even though, as Stone always understood, “you can’t buy a hit record. If it’s not a hit and the public don’t want it, you can play the hell out of it … but it’ll just pass. But a hit record will stick … People still remember those records, to this day, which hadda mean something.”
Cowboys and Indies: The Epic History of the Record Industry Page 32