NEWS ITEMS:
I.B. Bad: Happiness Is a Warm Done Deal

Breaking News: FCC Targets Four Radio Powers in Probe

Wheels & Deals: Playing With Dolls

Bulletin Board


Reprinted with permission from Hits Magazine

April 25, 2006

Sony got everything it wanted when Michael Jackson agreed to sell half of his 50% stake in Sony/ATV Music. First, because Jackson is no longer an equal partner, Sony no longer has to go through the headache of seeking his approval on major business decisions, as it had to do previously on any deal over $1 million?a big factor considering Jackson's unpredictable behavior and predilection for dropping out of sight for months at a time. Additionally, by restructuring Jackson's sizable debt, the agreement eliminates the possibility of an outside party seizing control of half of the company in an auction scenario, which is why Sony was so deeply involved in helping Jackson seek financial relief. While Sony hasn't yet written the check to Jackson?which will reportedly be for about $200 million after the deduction of all costs?the agreement enables the company to do so at will... While the deal was negotiated between Jackson's Middle Eastern advisors and Sony Corp. bigwig Rob Wiesenthal, the whole thing was made possible by the ongoing actions of longtime Jackson legal advisor John Branca, who put together the deals that resulted in Jackson getting half of Sony/ATV and setting up Mijac Music to house Jackson's own publishing. These two publishing holdings remain Jackson's biggest assets, with his half of Sony/ATV valued at around $500 million overall and Mijac said to be worth $100 million. Additionally, Neverland Ranch is worth around $50 million, while his masters are valued at $25 million-$50 million. That puts Jackson's assets north of $600 million, compared to his estimated $300 million in debt, suggesting that media characterizations that he was near bankruptcy were somewhat exaggerated... Branca will clear a cool $20 million for his own 5% stake in Jackson's Sony/ATV holdings, and in this soft market, which has seen a precipitous drop in legal fees in recent years, that is a huge payday for the wily attorney and his firm... One added benefit to Sony is that the value of Sony/ATV will get a significant bump when the Beatles catalog, now being digitized by the band's Apple Corps, becomes available online... Many expect that Sony's next major acquisition will be in the $2 billion range, as the company appears poised to acquire the 50% of Sony BMG presently owned by Bertelsmann. Considering that Sony's core electronics business is ailing, and that music is a slow- to no-growth business, this would seem to be a strange time for Sir Howard Stringer to open up the company coffers... Speaking of deals (and when are we not?), much buzz about Interscope's nontraditional revenue-sharing arrangement with the Pussycat Dolls, the latest wrinkle being an agreement with Hasbro Toys to manufacture Pussycat Doll dolls. This could be turn out to be quite lucrative for all parties considering the revenues supposedly generated by the Spice Girl dolls a decade ago. The idea for the pact came from veteran entertainment attorney Fred Goldring, whose firm consults Hasbro on entertainment and music... The Pussycat Dolls deal is but one example of forward thinking at Interscope. There's also a growing buzz about the label group's foray into TV. And while it's unclear what Interscope's play will be, or what role will be assigned to Polly Anthony, most believe the move was inspired by the coveting of American Idol's platform, which has generated tens of millions in album sales... According to sources in Burbank, certain Maverick executives are being offered jobs inside Warner/Reprise, as the parent company is said to be in negotiations to possibly shutter or further downsize Maverick. These same sources express some surprise that the boutique label would be shut down after Lyor Cohen had reportedly given his word to his close friend Guy Oseary that Maverick would continue to exist. That said, the fate of Maverick is probably not Guy O's top priority at the moment, as his management client Madonna prepares to launch a major tour; her last one netted $125 million... Before the FCC launched its own payola investigation against four radio companies last week, many in the business were applauding Entercom for filing a motion to throw out Eliot Spitzer's suit. Interestingly, up until last week, Entercom and other radio operators were still accepting spin programs, taking the position that if the FCC had no problem with these programs, they were operating within the law, despite Spitzer's allegations of illegality. In the wake of the new FCC probe, that position obviously will have to be reexamined. Spitzer's outlawing of spin programs at the majors, which took millions in revenue off the table for Entercom and others, was quietly applauded by some top label execs, who'd concluded after taking a closer look that they were just another futile and costly promotion exercise. But no matter when the paid-for airplay occurred, history has shown that you can't make chicken salad out of chicken shit... Some thought Entercom's legal battle with Spitzer would motivate UMG and EMI to ease off on negotiations with the NY AG's office until the courts decide whether to throw out Spitzer's suit. But even before the FCC got into the act, these majors continued to work toward settling, preferring to put the matter behind them... Ian Montone is in the process of taking down his lawyer's shingle in order to focus exclusively on managing the White Stripes, the Raconteurs, the Shins and Autolux with his partner Emmett Malloy (Jack Johnson). Legal representation of most of his acts is being taken over by other attorneys at Davis, Shapiro, Lewit, Montone & Hayes... Names in the Rumor Mill: Walter Yetnikoff, Cliff Burnstein, Craig Lambert, Randy Goodman, Rob McDermott and Ron Fair.


HITS magazine is the most powerful information vehicle in the music industry, and is read religiously by all the top executives and everyone else.




Top of Page



Reprinted with permission from Hits Magazine

April 20, 2006

The FCC has launched formal investigations into pay-for-play practices at Clear Channel Communications, CBS Radio, Entercom Communications and Citadel Broadcasting. The story was broken by Charles Duhigg in an L.A. Times Page One story. As Duhigg notes, this is the biggest federal payola inquiry since the congressional payola hearings of 1960.

The story cites two FCC officials as revealing that the FCC had requested "letters of inquiry" from the four radio powers in search of evidence that programmers had received cash, checks, clothing and other gifts in exchange for adding certain songs—which you probably realize is a violation of federal rules. If the feds can prove wrongdoing, it will impose sanctions ranging from fines to the revocation of stations' licenses.

All four broadcasters have been in negotiations with the FCC in an effort to avoid a federal inquiry and in the hopes of getting off with limited fines in exchange for discontinuing illegal and questionable practices. Indeed, it was haggling over the amounts the chains would be required to pay that caused the talks to stall. Last month, Duhigg revealed. Clear Channel had proposed a fine of about $1 million, while some commissioners were pushing for as much as $10 million, sources told the reporter.

Bryan Tramont, who served as chief of staff to former FCC Chairman Michael Powell, told Duhigg he believed the feds acted only after accumulating significant evidence of pay-for-play. "The FCC would only launch a formal investigation if they had information leading them to believe possible violations have occurred," he said. The probe could lead to the uncovering of additional evidence to go with that provided by Spitzer.

Entercom now has a pair of lawsuits to deal with, following the one slapped on the company by New York Attorney General Eliot Spitzer, who is also investigating CBS, Citadel and Clear Channel. Spitzer is sharing his evidence with the FCC.

Some in radio and the music industry had hoped that Entercom's decision to take a stand against Spitzer would serve to hasten resolution of the matter, and thereby loosen up playlists, which have tightened significantly as programmers have reacted with caution to potential scrutiny regarding their adds (see story). But that hope is now up in smoke.


HITS magazine is the most powerful information vehicle in the music industry, and is read religiously by all the top executives and everyone else.




Top of Page



Reprinted with permission from Hits Magazine

April 20, 2006
By Rodel Delfin

DOORS ARE WIDE OPEN: The Jimmy Iovine-signed Pussycat Dolls cut a deal this week with toy manufacturer Hasbro to release a line of dolls fashioned after the six members in the group. The target retail audience is 6-9 years old, but also includes loser trade-rag writers (err...just kidding, we really don't play with dolls). So what's the significance of this? Well, the PCD deal with Hasbro marks yet another income arrangement that Interscope has made for the act outside of traditional music biz revenue. And what was deemed a novelty signing a few years back is proving to be a potential blueprint for what artist deals could become. Of course, Disney and its Hollywood Records unit have made this normal practice for years, with their TV stars transitioning to music careers. However, Interscope appears to be leading the pack among the stand-alone music companies venturing into other income territories outside the standard music-biz model. Iovine and Interscope marketing whiz Steve Berman, along with UMG dealmakers, are said to have structured and negotiated the arrangement with the toy maker. Back in 2003, Interscope originally signed Robin Antin's Pussycat Dolls troupe?what was then just a "burlesque-inspired nightclub revue." It was an innovative deal in which both parties split the profits from the group's ventures. But more recently, the act scored a pair of radio hits that spurred a platinum-selling album, a very successful nightclub (with a merch retail store) at Casesar's Palace in Las Vegas and a cosmetics line from the Stila unit of Estée Lauder. Not too shabby. While industry folks are barking at the high-figure dough to sign indie label acts with apparent sales ceilings, many industry insiders are applauding the success of the PCD and Iovine and Berman's signing and dealmaking. With that said, there's definitely a feeling of signing desperation in the air, as labels and artists, as well as their intermediaries, appear to be more open to new deal structures than ever before. And although it may not seem apparent, it's also a time when A&R has room to be even more creative... NOW FOR SOME WEASEL NEWS: The Dan Friedman-repped Ludo had a bevy of weasels checking out their Don Hills show in NYC this week. We hear label reps from Epic, Atlantic, Capitol, Jive, Island, Wind-up and Octone were in the house... Have you been following the Mickey Avalon buzz in L.A.? The shows are packed and the story is pretty crazy. Get on it before this one gets taken off the market. No immediate L.A. shows, but you can check him out in Sin City in a few weeks (see below)... Speaking of Vegas, lots of buzz building around LV act the Higher... Chrysalis Music Publishing guy Jamie Cerreta just finished an album by the Great Fiction, with no label deal yet in place. Checked it out yet?... Lots of chatter surrounding a particular indie label act that's griping about a lack of finances despite impressive album sales. Due to the nature of their deal, it looks like their indie is the only one getting rich... BUZZIN': Louie Bandak and Stacy Jones... Hit me up: brotherxx@earthlink.net

Buzz/Gigs:
THE NORTH Mon., April 24, 7:30, Mercury Lounge, N.Y.
BEDOUIN SOUNDCLASH April 24, TBD, Mercury Lounge
LUDO Fri., May 5, TBD, Pageant, St. Louis
MICKEY AVALON Fri., May 12, TBD, Celebrity Theatre, Las Vegas


HITS magazine is the most powerful information vehicle in the music industry, and is read religiously by all the top executives and everyone else.




Top of Page



By Kenny Kerner

It's a Legal Matter, Baby: Platinum group The Killers are being sued by their former manager, Braden Merrick to the tune of $16 million dollars. Braden and his company From The Future, sued the individual members of the band and their Vegas-based attorney for breach of contract and interference with that contract.

Mariah Carey will begin shooting for the film, Tennessee. She portrays a waitress searching for her father. No word as to whether she will contribute music to the film.

Ozzfest 2006, beginning July 1 in San Francisco, will include Ozzy Osbourne, System of a Down, Disturbed, Hatbreed, and LaCuna Coil. It will play in 20 cities.

All of the original members of Slayer have reunited to record a new CD—their first since 1990's Seasons in the Abyss. The CD is being executive-produced by Rick Rubin... Pearl Jam is hitting the road in support of its new CD on J Records. Download their first single at www.pearljam.com.

What happens when you combine million-dollar looks with million-dollar songs? Chances are you get a hit artist! Nicollette Knight puts it all together with great songs by Keri Kelli, one of L.A.'s most famous unknown songwriters (and one helluva guitar player) who led former megaband Big Bang Babies. Nicollette shines on "Hear You Say" and the Joan Jett classic, "Rock 'N' Roll." Check her out at www.myspace.com/nicolletteknight. A real winner!

Lollapalooza 2006 will be held at Chicago's Grant Park from August 4-6 and will feature Red Hot Chili Peppers, Kanye West, Wilco, Matisyaho, Ween, Queens of the Stone Age, The Shins, Ryan Adams, Sonic Youth, Nickel Creek, Eels, and many others. Be there!

ASCAP reported a 6% increase in revenue for 2005, which totaled $50 million. The P.R.O.s revenue for the year was a mere $749 million!


Top of Page











See How TAXI Works






















"I had the drive, and the passion. I just needed help, and you keep supplying it."
— Justin K.,
TAXI Member





"I just want a shot, and I feel that TAXI has given that to me."
— Roger Yeardley,
TAXI Member

"I'm really enjoying being a Taxi member, and appreciate all the critiques . . . especially the nice ones!"
— Carole Nelson,
TAXI Member


"The TAXI rally was one of the most wonderful experiences I have had in our business."
— Alan Abrahams,
TAXI Member

"The Road Rally was the most productive weekend of my music career."
— Dean Person,
TAXI Member


"TAXI, thanks for all your help. My song, 'Drowning In Love,' will appear in the upcoming Mirimax film, 'Takedown."
— James Kole,
TAXI Member

"I get a lot of music from many different sources, but I find the quality of the music I get from TAXI is always high caliber."
— Tom Vickers,
Senior Director of A&R,
Mercury Records





"TAXI provides opportunities to people who otherwise would have no access to the music industry."
— Tom Wasinger,
TAXI Member

"Thanks so much for forwarding "Sheree" to Dawson's Creek. It's been selected for the show!"
— DFran Lucci,
TAXI Member



"Thanks for creating and maintaining this great organization!"
— Angie Peckham,
TAXI Member

"I had the drive, and the passion. I just needed help, and you keep supplying it."
— Justin K.,
TAXI Member





"With help from you guys, the music is pouring out and I'm having such fun! Thanks!"
— Willie McCulloch,
TAXI Member

"I'm impressed by how 'user-friendly' you are."
— Dean Saner,
TAXI Member


"Your dedication and hard work never ceases to amaze me."
— Jimmy Clark,
TAXI Member