Cowboys and Indies: The Epic History of the Record Industry (42 page)

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 record 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.”

Tested and strengthened by the failed boycott, America’s regional independent radio promoters were gradually becoming the official gatekeepers to hitland. They even dared to raise their fees when Warner came back with its tail between its legs. In an industry that admires mischief, most onlookers couldn’t help but smirk. As every veteran knew, payola had been around since the late forties when getting R&B records on air meant slipping $50 into the paw of some underpaid jock. The big difference was that now, influential deejays were expecting as much as $10,000 to spin records all over a key region—a fee unaffordable to small record labels. These so-called promoters couldn’t turn shit to gold, but even in a time of recession, theirs was a proven system, which, by keeping out the poor, made it easier for the big labels to stay on top.

25. SHADOWS

As far as the moguls were concerned, the disco bubble had burst like a septic boil. Still, right under their runny noses, New York nightlife continued to foreshadow the future of pop music.

In Harlem and the Bronx, thanks to a new generation of club deejays, the turntable had become an instrument in its own right. In 1979, Sugar Hill Records was opened by a former soul singer, Sylvia Robinson, with the financial help of the notorious Morris Levy. Her first release was the seminal “Rapper’s Delight” by the Sugarhill Gang. A few months later, Blondie mixed postpunk and rap ingredients into an eerie six-minute groover, “Rapture”—their first No. 1 in America, complete with a video featuring graffiti artists. Although what we retrospectively call
hip-hop
had yet to find its name, the last child of the New Wave was officially born.

“By 1979, disco had a negative connotation, and it took the blame for the recession,” explained Tom Silverman. “So we changed our name from
Disco News
to
Dance Music Report
. We didn’t really like the word
disco
anyway because it was just the place, not the music itself. We trademarked the term ‘DOR,’ dance-oriented rock, and began reporting
any
kind of music that people were dancing to in clubs. That’s when I made my calls to retail and discovered
break beats
.”

Silverman telephoned Downstairs Records, a popular deejay store on 6th Avenue and Forty-third Street, and was informed about their new
Breaks Room
. “I went down. It was a separate room about the size of a closet. There’s just a guy at a desk, and behind him is this strange selection of records: Bob James, the Monkees, Kraftwerk, the Incredible Bongo Band, Cerrone, Billy Squier, a certain record by the Eagles—all these records that seemingly had nothing to do with each other. But there’s this line of seventeen-year-old kids out the door—waiting to buy two copies of each!”

Knowing they were amateur deejays too young to have seen these records come out, Silverman asked, “How do you know which ones to buy?”

“We buy what Afrika Bambaataa plays,” replied a customer.

Bemused but curious, Silverman tracked down the mysterious name to a club in the Bronx.

“It was this crazy mélange of music: James Brown, Sly & the Family Stone, George Clinton—all this funk mixed with rock and disco and other things. But they were only playing four or eight bars and looping them.” Coming in as a reporter, Silverman was equally fascinated by the background story of Afrika Bambaataa, a reformed Black Spades gang member who began Zulu Nation, a community culture movement aiming to pacify and uplift New York’s ghettos. “There was still a lot of segregation back then and kids were getting killed. But break-dancing, graffiti, rapping, deejaying,” noted Silverman, “these were forms of expression available to people without any money.” Wanting to get Afrika Bambaataa’s electrifying performances on record, Silverman borrowed $5,000 from his parents and set up Tommy Boy in 1981. “I looked at Sugar Hill Records and realized you didn’t need to be a major label. You didn’t even need to be smart!”

Meanwhile, in downtown Manhattan, a new dance scene was rapidly evolving from where disco and punk had started. One eyewitness was Craig Kallman, who became the CEO of Atlantic Records in 2005. Kallman was a teenager at the time, sniffing around New York’s record stores, determined to get a deejay residency. “When the disco era died, it all moved downtown,” he explained. “It had been uptown with Studio 54, Xenon, and Copacabana, which were driven by the jet-set, celebrity crowd. But because living in New York City was more affordable back then, you had all these pockets on the Lower East and West Sides.” Multicultural, sociologically diverse, and distinctly seedy at the edges, these new hot spots were “black, white, Hispanic, gay, straight, transvestite. There were musicians, poets, painters, drug dealers, actors, journalists, you name it.”

In addition to clubs like the punky Hurrah on West Sixty-second and the Loft-inspired Paradise Garage downtown, there was a new superclub on West Thirty-seventh Street capturing the very essence of the moment. Opened in 1979 by an adventurous German impresario named Rudolf Pieper, “Danceteria was the ultimate melting pot,” according to Kallman. Mixing European artiness with New York multiculturalism, “it had different deejays and musical themes on four distinct floors. I became a resident deejay on Friday and Saturday, trading nights with my compatriot, the legendary Mark Kamins.”