NO DOUBTING THOMAS

Prior to joining CBS Records, Mottola was one of the most influential artist managers in the music industry as President of Champion Entertainment, where he built the careers of such major stars as Hall & Oates, Carly Simon and John Mellencamp. He is also on the Board of Directors for the National Center for Missing and Exploited Children, the Police Athletic League, the T.J. Martell Foundation, the Rock and Roll Hall of Fame Foundation and the Federal Law Enforcement Foundation. He was honored in 1990 with the Spirit of Life award from the City of Hope, in ’98 received Sony Corp.’s CEO Special Recognition award, in October 2000, was honored as a Corporate Leader by the Thurgood Marshall Scholarship Fund, and this October was presented the Visionary Award from D.A.R.E. With all those accomplishments, you’d think he’d have managed to avoid this tete-a-tete with HITS’ most unworthy "On Your" Marc Pollack.

How would you describe the general state of the industry right now?
It would be safe to say, overall, business is erratic. Everyone knows that, but you still have genres of music that are doing well, and, of course, the hits still sell pretty much as if nothing has happened.

Do you believe the business is still about hit singles and hit albums?
No question. Some of our tribute albums and records that deal with the tragedy are doing well, but the hits always sell. Industry-wide, we’re off just a little bit, but, overall, our business is pretty healthy. It’s those records that haven’t quite made it yet or are sitting in limbo that are feeling the effects of the current environment most. The people who are going out to buy music are buying the hits.

When, if ever, will things get back to normal?
If I had that answer, I’d be worth $400 billion. Seriously, though, I’m not sure things will ever really be the same as they were—and that’s both good and bad. It puts us in a position of change. It makes us think more about how we market, merchandise and advertise our product as we move forward. It’s going to make everybody in this business even more selective. We have to try to be more accurate in how we accomplish our ultimate goals. So, even though we have some negatives surrounding us, I’m one of those people who look at this as an opportunity to really re-center and refocus our whole business. Out of this unfortunate horrible tragedy, change will emerge.

How will that change affect the music industry?
In addition to the artists’ response, merchandising, marketing and advertising will evolve. We’ll be analyzing which releases we’re going to launch with independent promotion and how we will use television as an additional tool—maybe more so than we have in the past. We’re looking for any new avenues that can more efficiently sell our music.

That brings us to the Internet and the digital distribution of music. Where do you think that fits in the overall revenue stream of a major music label?
Right now, it’s negligible. Down the road, 10 years from now, it will certainly play a much larger part in the revenue stream. There are still tremendous avenues to be developed and legal aspects to be worked out with legislation and figuring out how to properly pay the artists and the record labels involved. As that evolves and develops, this will still be a hit-driven business, with the main configurations being CD and DVD.

One of your main strengths is your management team, which has remained stable over time.
I came here in 1988. The team that I put in place back then is still here. We’re going on 12, 13 years with Mel Ilberman, Michele Anthony, Don Ienner, Dave Glew, Polly Anthony, Bob Bowlin, Kevin Kelleher... They are the same executives who have been through the rebuilding and restructuring of what was then CBS Records and is now Sony Music, which was the #1 music company in the world until the purchase of PolyGram by Universal three years ago. Now we’re #2 globally. Before that merger, we took a company that was a great monolith, redesigned it and changed the architecture creatively. We streamlined and were able to make the company the #1 music operation in the world. This management team has carried us through the good times as well as the bad times. Having these people in place enables us to speak to each other in shorthand. It allows for continuity. We can accomplish things here in a week that take most other companies months to do.

For instance, we had an idea to put together a bunch of patriotic songs in conjunction with the nationally televised telethon. Celine Dion was going to perform "God Bless America" on the telethon. Well, Donnie and Columbia had an idea to put out a patriotic album and entitle it God Bless America. They got music from Bob Dylan and Bruce Springsteen and others, for a total of 15-20 songs. We turned it around— artwork, manufacturing, in stores worldwide—within three weeks! That’s something pretty much nobody can do anymore. That’s because of the ability of this team. They’re just the best people at their jobs in the whole industry. No matter what happens over the next 18-24 months—and believe me, there will be plenty more change and upheaval—these people are warriors, and they will be able to get us through all of this while remaining on top.

How do you keep your executives happy?
I give them a lot of money! [Laughs] We all have a sense of camaraderie and loyalty towards each other. If one of the cylinders is down, the other one helps, so the car is [effectively] operating on all cylinders at once. It’s that kind of team and has been right from the get-go. What I try to do is provide every opportunity and care for them in every way that they need. I watch over this family on an hourly and daily basis worldwide. Don’t forget, it’s not just this team. We have 66 companies throughout the world that all report to one place, not to mention our global manufacturing and distribution facilities. All of it has to be coordinated like a ballet. It’s a very sensitive, delicate job, but it’s something that I enjoy doing. And I think all of the people here appreciate it and give their best as a result.

Is the desire to win an important asset?
Each one is highly competitive in their own way, and I value that tremendously. The good thing about us is that we can go out to dinner, sit down on a Monday night and talk about general overall strategies—how we can use the power of the team to our advantage. On Tuesday morning, they’re all on the playing field and fighting against each other for competitive position in the marketplace as individual labels. That’s the beauty of it. We can come together again and ask, how do we use this strategy to our advantage? How do we use all of our combined talents and skills and powers to get the edge over our competitors?

The fourth quarter is usually crunch time. What are your big releases?
We have strategically set up our release schedule so that not everything is coming out at this time. First, it’s our third fiscal quarter, which means we are in a different situation from everybody else. Christmas is obviously the prime selling season. Some of our biggest releases for the quarter include Michael Jackson, Mariah Carey [greatest hits], Ozzy Osbourne, Destiny’s Child’s Christmas album, Charlotte Church, Barbra Streisand’s Christmas, Marc Anthony—we have both his Spanish salsa album and his English album coming within a month of each other.

We also have Shakira, who I think is going to be the biggest new star in the business. Also, we have Jill Scott, Nas and Lil’ Bow Wow, just to name a few.

Which of your competitors do you most admire?
One of my main competitors is also one of my closest friends in the music industry for the last 25 years and that’s Doug Morris. I love him as a friend, I respect him as a businessman and as a competitor, and I believe he’s one of the few gentlemen left in the record business who is still what he started out as—a music man.

What do you see yourself doing five years from now?
Probably the same thing. Don’t forget, I started at 4 years old as a musician and then evolved from a singer to being a manager for 15 years. I’ve been involved in this business with the creative process first, and then running a global organization after that. I have different motivations and things that inspire me than most people running big companies. So yeah, if I still have the ability to do this, God willing, I would like to do it for the rest of my life.

You were an entrepreneur for years before you joined the corporate world. If you had to do it over again, would you do it the same way?
I wouldn’t change a thing. It seems to have worked for me.

What’s the one deal or hiring you wish you had made?
At the time, it seemed a wise decision for us to allow Def Jam to go to PolyGram. They were doing miserably and, at the time, we received a pile of cash. It was an offer too good to refuse—and you can quote me on that. Anyone in our position would have done the same thing. There was too much uncertainty then about their future, but looking at the wonderful job that [Island Def Jam President] Lyor Cohen has done, I admire the turnaround he has accomplished since they left Sony seven or eight years ago. Things were much different then. I still insist, if I had to do it all over again, I would have done the same thing. But I do admire Lyor for having the tenacity and the stick-to-itiveness to dig in and accomplish what he has.

If you were to start a record company today, who would be your top three executive picks?
I’m not going to answer that. It would put me into too much of a bidding war.