Cowboys and Indies: The Epic History of the Record Industry (32 page)

Steve Ross had his eye on the bigger picture. In 1970, Atlantic, Warner, and Elektra collectively accounted for 18 percent of the American albums market, higher than CBS. Wanting to keep the arms independent, yet needing a single brand name to seduce Wall Street, Ross off-loaded Kinney’s funeral parlors and moved the property holdings into a separate branch. A new corporate head controlling the record and film companies was given a dazzling new name: Warner Communications Inc. Then, in late 1971, the three record labels moved over to their own distribution network, WEA. With eight regional branches from coast to coast, each with its own traveling sales force, the synergy created was far greater than the sum of its individual parts. As the corporate CFO, Bert Wasserman, explained, “Steve had this saying, if you had one office with three doors, you wouldn’t have grown as fast as having three offices with doors located in different buildings.”

Preparing his deals as a type of hypnosis, Ross would regularly test his pitches on his closest financial executives—if they understood, he’d keep convoluting the terms until their eyes glazed into bemused submission. In Jac Holzman’s view, “Steve Ross was a smart guy who never finished college—a
bon vivant,
hail fellow well met. He had an eye for numbers and nose for bullshit. Until you got to know him a little, nobody knew how sharp and incisive and what a gambler he was. The record companies might make a few hundred million dollars a year; they sent the cash up to corporate and corporate could do whatever they needed to do. Whereas when the movie people sent a couple of hundred million dollars up, they’d be calling it back the next year to make pictures. So he realized the record business was sustainable cash flow—if you did it right. And he got to keep that money to use for other acquisitions, like buying Atari a few years later.”

Rather than demand reports and projections, Steve Ross convened informal gatherings of the label barons every three months. Arousing the envy of competitors, Ross lent his private jet to any label executive who needed to impress a manager or artist. Before Thanksgiving, he sent fine turkeys to everyone’s wives. Unafflicted by the frustrated-artist syndrome, Ross, crucially, never showed any desire to get invited to show biz soirées. “Steve believed that the management of creative companies was the key,” explained Joe Smith. “The artists will come and go, but Mo and Joe and Ahmet and Jerry will always be there.” Accordingly, he congratulated hits and never chastised flops. Maintaining a spirit of interested laissez-faire, whenever Ahmet Ertegun would telephone talking up some new act, Ross would fib, “Ahmet, I have a long-distance call coming in.” He would quiz his children, then call Ertegun back.

Although Ahmet Ertegun was cut from the same cloth, thanks to the Californian singer-songwriter wave, Warner was quietly becoming the jewel in the crown. Adding to a juicy catalog that already included Neil Young, the Grateful Dead, Frank Zappa, and Randy Newman, between 1969 and 1970, Ostin and Smith signed Jethro Tull, Van Morrison, James Taylor, Fleetwood Mac, Ry Cooder, Black Sabbath, Deep Purple, Doug Kershaw, Gordon Lightfoot, Alice Cooper, America, and the Small Faces. Of the two presidents, the shy but determined Mo Ostin was cultivating a deserved reputation among artists, managers, and competitors alike as the father figure of the WEA group. Although he wasn’t really a music man himself, Ostin by now understood the finer subtleties of the business. “If all it took was money,” he constantly told his staff, “General Motors would be in the record business.”

As well as brilliant A&R, the magic ingredient that boosted the Warner beanstalk was what the company called
creative services
—the brainchild of Stan Cornyn. Realizing Warner’s target audience wasn’t paying much attention to AM radio or mainstream press, Cornyn swiveled his periscope toward the underground press and student FM stations. He worked, on his own admission, “usually at home, lying on my rug on my belly with a pen and yellow tablet—amusing myself.” He turned advertising into a game of wacky sloganeering. Visually inspired by the spacious minimalism of Volkswagen advertisements, Cornyn and art director Ed Thrasher created Warner’s stylish, saucy face. “We just kept thinking of ways to get outrageous attention,” said Cornyn of those years, by tapping into what he termed “State of the Seventies”—a look, a feel, a set of values. “Nobody censored me. We just felt the rhythm and started marching out front with those who wanted out of Vietnam and into acid.”

Nicknamed “the
Gold Dust Twins
” by their staff, copresidents Mo Ostin and Joe Smith quickly understood the spin-off value. “Every manager, attorney, or artist sits down … and they talk about our advertising,” explained Joe Smith at the time. “Tell me another company where people talk about their advertising. Not how much, but the quality of it.” Cornyn began noticing how “Mo and Joe started doing office tours with would-be signees, entering the office doors in Creative Services, pointing at our group and saying, ‘
That’s
them.’” The curiosity eventually spread to the corporate headquarters. “Steve Ross invited me to New York to speak to financial market analysts—an auditorium full of them,” recalled Cornyn with bemusement, “as if Creative Services had found the divining rod to a whopping new market.”

Meanwhile, just down the road from Warner’s offices at Burbank, supermanager David Geffen, based in Hoagy Carmichael’s old house, was getting noticed by Steve Ross’s barons. Representing CSN, Joni Mitchell, and Neil Young, the agency had a policy of no contracts that was a powerful glue among these embodiments of the hippie dream. Smoking joints on the office sofa, the artists were all kept entertained by Geffen working his telephone—squeezing promoters and record executives with a zeal that verged on sadistic pleasure.

Although few could understand the fire in his belly, David Geffen was a complex personality haunted by the professional failures of his father, confused by his homosexuality, and ashamed of his mother’s lack of sophistication. If anything, he probably found handling the business of folk singers easier than sitting alone wrestling his own demons. His immense powers to persuade and even manipulate sprang from a deep reservoir of emotion that rendered him, like an iceberg, a deceptively powerful force of nature. When he wasn’t in killer mode, he could be an attentive friend whose puppy eyes drew artists into a world of intimacy and comfort. Although relatively unmusical, he was sincere and discerning in his appreciation of lyrics and possessed the same dissatisfied energy as the brooding songwriters he defended. Like them, he was fleeing drabness and mediocrity—in search of gold-plated recognition.

Geffen’s sugar daddy in these years was Ahmet Ertegun, an adorable rogue in his own right, with a taste for luxury and elaborate schemes. The fascination was mutual. Observing Geffen working his magic over the telephone one afternoon in the Beverly Hills Hotel, Ertegun whispered to a journalist friend, “He must be talking to an artist. He’s got his soulful look on. He’s trying to purge at this moment all traces of his eager greed.” Sure enough, it was Joni Mitchell at the other end.

Partly grooming, partly showing off, Ahmet Ertegun berated the young man’s manners and introduced him to collecting art. Ertegun even brought Geffen on a junket to the South of France, where the Rolling Stones were recording
Exile on Main St
. However, Geffen’s transformation from manager to record mogul began in Clive Davis’s office while shopping around his latest discovery, Jackson Browne.

“I’m sorry, but I have to interrupt,” Davis apologized as his secretary made signals from the door. “There’s only one person on earth that could make me interrupt your singing, and that’s Goddard Lieberson, and he’s on the line.”

“Pack up your guitar,” snapped Geffen, standing up. “Pack up your guitar, we’re leaving!”

“We don’t have to leave, Dave,” pleaded the baby-faced musician.

“Just do what I tell you,” barked Geffen.

As manager escorted artist to the exit, Davis bleated, “Wait!” He’d put the man Columbia employees still called God on hold.

Despite his bluster, Geffen skulked back to Atlantic. “Ahmet, look, I’m trying to do you a favor by giving you Jackson Browne.”

“You know what, David, don’t do me any favors,” quipped Ertegun.

“You’ll make millions with him,” drooled Geffen.

“You know what? I got millions.” sassed Ertegun. “Why don’t you start a record company and then we’ll
all
have millions.”

From that fateful repartee, Geffen’s rejection rose into revenge. “Fuck it!” he thought. “If I really believe in these artists I
should
start a record company.” Financed and distributed by Atlantic, he found the perfect name for his very own artist sanctuary, Asylum. The company was loosely modeled on A&M—at the time, the most artist-friendly label in Los Angeles. The controversial David Geffen had gained access to the WEA banquet, albeit, for the time being, on Ahmet Ertegun’s knee.

Within a year, Geffen had lined up a small but impressive release schedule including Joni Mitchell, Tom Waits, the Byrds, Jackson Browne, Jo Jo Gunne, David Blue, and Linda Ronstadt. Thanks in large part to Jackson Browne’s advice, Geffen tapped into an emerging country-rock scene at a Los Angeles club called the Troubadour. From that connection, various musicians at a loose end began jamming with the help of Browne and another capable songwriter, J. D. Souther. They called themselves the Eagles. Geffen signed them up and paid for Glenn Frey and Don Henley to get their teeth redone.

As their management agency expanded into a record company and publishing arm, David Geffen and Elliot Roberts were forced to delegate. Geffen moved his attentions to the label; Elliot Roberts continued handling the musicians with his humorous but deceptively shrewd techniques. “He would smoke a copious amount of fantastically great dope and then make these deals,” recalled J. D. Souther, who likened Roberts to a cross between Woody Allen and Fat Freddy. “You’d see guys stagger out of his office as though they just did not know what happened.”

Picking up the waxy scent of money on the California breeze, in late 1972 Steve Ross asked Geffen to name his price for the barely operational label. In a fateful meeting, Geffen pulled out a cigarette, and quick as a flash, Steve Ross extended a light. “Seven million,” ventured the unprepared debutante. Without batting an eye, Ross agreed and offered Geffen an employment contract for $150,000 per year. Walking out of the meeting on a cloud, Geffen was now among the top fifteen shareholders of Warner Communications, with a personal estate worth $10 million. Or so he thought.

“Asylum was an artist-oriented label for about a minute,” noted Don Henley, who, like his fellow Eagles, took a few years to realize their publishing and record contract had been sold, effectively by their manager, without due consultation. Geffen had played his hand far too soon. He was about to pick up a game-changing joker—Bob Dylan, whose contract with Columbia had run out and ended in conflict. He was still a big name but artistically at a low ebb. “It’s like as if I had amnesia all of a sudden,” said Dylan of those fallow years in the early seventies when he was raising a large family while struggling to fulfil his contractual obligations. Jerry Wexler felt he was close to poaching Dylan for Atlantic when he was spectacularly outmaneuvered by none other than Ahmet’s wonder boy.

In an elaborate game of seduction, Geffen had treated Joni Mitchell and Dylan’s guitarist Robbie Robertson to a dandy sojourn in Paris, rooming at the Ritz and swanning down the tree-lined boulevards. Geffen began quizzing Robertson. “Why don’t you, Bob, and the Band do a tour together?” When Robertson argued that Dylan fans were expecting such an obvious move, Geffen delivered a short, sharp reality check. “It’s not expected
anymore.
It’s been a long time. It would be amazing, and I’ll help put the whole thing together.”

Hesitant but hungry, Robbie Robertson eventually introduced Geffen to the man himself. Strolling down the beach at Malibu, where Geffen had just moved in near Dylan’s house, Geffen’s decisive brainwave was to suggest selling the tickets directly to the public by mail order. With Dylan excited, Geffen then brought in Bill Graham as tour manager to organize forty shows in twenty-one cities throughout January and February 1974. Geffen, of course, had been providing his professional assistance as a friendly favor, but as the tour approached he made his next move. “What about a live album?”

Knowing that Jerry Wexler was offering Dylan a conventional deal on Atlantic, Geffen convinced Dylan to set up his own label, Ashes and Sand Records, promoted and distributed through Asylum/Atlantic. Promising 1 million units per album, Geffen exclaimed, “You’ll sell records you never dreamed you could sell.” Dylan altered the plan slightly; he felt a studio album, released just before the tour, would give his comeback added punch. So an unusually loose deal was concluded for one album only.

Then came a legendary corporate lunch held in Joe Smith’s Beverly Hills home. It was the record industry’s equivalent of a Mafia gathering. All of the WEA top brass were present: Steve Ross, Ahmet Ertegun, Mo Ostin, Jac Holzman, Stan Cornyn, Jerry Wexler, and David Geffen. Grinning from the corner of his couch, Geffen began teasing Wexler.

“Okay, David, you’ve got Dylan,” conceded Wexler. “Now let’s just forget the whole thing.”

Geffen continued to poke away at Wexler for his “old style.” The stocky army veteran began berating Geffen’s artist-pampering methods as “ridiculous,” and once Wexler’s notorious anger was aroused, the afternoon’s agenda cartwheeled straight off the highway.

“Well, if we’re going to follow some kind of rules, let’s talk about who’s fucking up the rules here!” barked Wexler. “You stole an artist that we had!”

“You’re an old washed-up record man!” groused Geffen. “What the fuck do you know?”

With veins bulging in his reddening face, Wexler thundered, “David, why don’t you just shut up! You don’t know a thing about music. You’re nothing but an
agent
! You’d stick your head in a pool of pus to come up with a nickel in your teeth.”