The apparent power struggle between new Sony BMG Music Entertainment CEO Rolf Schmidt-Holtz and Sony Music’s two highest ranking creative executives has reached its breaking point. Don Ienner, the S
The apparent power struggle between new Sony BMG Music Entertainment CEO Rolf Schmidt-Holtz and Sony Music’s two highest ranking creative executives has reached its breaking point. Don Ienner, the Sony Music Label Group chairman/CEO, and Michele Anthony, president/COO of the division and executive VP of Sony BMG, abruptly resigned their posts on June 1.
No reason was given for their exits, but company insiders say the moves suggest yet more culture clashes in the turbulent recorded music joint venture between Sony and BMG.
Sony BMG Music U.K. chairman/CEO Rob Stringer—younger brother of Sony Corp. chairman Sir Howard Stringer—will take over for Ienner in the role of president of the Sony Music Label Group on Sept. 1. Sony BMG COO Tim Bowen will serve as interim label head.
The exit of Ienner and Anthony, 18-year Sony veterans, closely follows recent promotions for both executives.
In March, Schmidt-Holtz, a Bertelsmann alum, promoted Ienner to chairman of the label group in one of his first acts as chief executive. And last December Anthony was named president of SMLG.
At the time, Ienner’s promotion seemed steeped in symbolic value to the deeply divided joint venture—both as a vote of confidence in Ienner in the shift to a Bertelsmann-topped Sony BMG, and as an effort to stabilize the company’s upper-management ranks in the wake of former CEO (and Sony alum) Andrew Lack’s move to the nonexecutive chairman slot.
But some sources suggest Schmidt-Holtz was already plotting to oust Ienner by the end of the year, following key second half releases from Beyoncé, DMX and others. Meanwhile, relations between Ienner and Schmidt-Holtz quickly strained. A key sticking point appears to have been Schmidt-Holtz’s decision to merge Sony BMG’s Nashville operations in April. The move effectively stripped Ienner of any control over the company’s country efforts, much to his displeasure, sources say. Schmidt-Holtz handed control of the new combined unit to RCA Label Group Nashville chairman Joe Galante. John Grady, the president of Sony Music Nashville, was fired.
The country music divisions were among the last pieces of the joint venture to be consolidated, and were a particularly thorny political issue. Galante reported directly to the CEO’s office, while Grady, reported to Ienner. Ienner was proud of his efforts to revitalize the company’s Nashville labels, which introduced artists like Gretchen Wilson and Miranda Lambert in recent years.
Sony BMG’s reluctance to combine the country operations illustrated the lingering integration pains the joint venture experienced.
More recently, Ienner and Schmidt-Holtz butted heads over Columbia Records president Steve Greenberg, a Lack recruit. Ienner felt Greenberg—an A&R specialist best-known for discovering Joss Stone while head of his own S-Curve Records, and breaking Hanson while at Mercury—did not fit in at Sony, and pushed for his ouster. Schmidt-Holtz, a Greenberg advocate, wanted to keep him. Greenberg’s future remains unclear. One scenario being considered is Greenberg starting a label through the BMG side.
The shakeup also leaves lingering questions about the future of the group-level artist development team of Michael Caplan, David Massey, Keith Naftaly, Jay Landers and Steve Lillywhite. Ienner created the team to develop projects for both Columbia and Epic. However, Columbia and Epic also continue to staff their own A&R departments, and some label-level A&R execs inside Sony have expressed frustration with the two-tiered system.
SMLG is riding high on strong first-week sales of the Dixie Chicks’ album “Taking the Long Way,” which sits atop The Billboard 200 this issue on sales of 526,000 units. However, the label group’s year-to-date current market share is 10.4%, down substantially from the 13.4% share it had a year ago, according to Nielsen SoundScan.
Reaction from the management community has been mixed.
“I think it’s been planned for awhile,” says Michael Lippman, manager of Sony acts George Michael and Anna Nalick, who was at 550 Madison Thursday morning immediately prior to the resignations being announced. “It’s an end of an era. New blood is a very good thing.”
Beyoncé’s manager (and father) Mathew Knowles sounded less confident in the move. “I have a high level of respect for Michele,” Knowles said. “It’s hard to replace the relationship I had with Donnie.” As for the planned fall release of Beyoncé’s next album, Knowles said he’s “hopeful there’s no impact.”
Additional reporting by Melinda Newman and Gail Mitchell in Los Angeles.