On the heels of losing its only superstar, DreamWorks Records Nashville is being shuttered by its parent company, Universal Music Group.

On the heels of losing its only superstar, DreamWorks Records Nashville is being shuttered by its parent company, Universal Music Group.

As Billboard.biz reported last week, Toby Keith has departed the label where he scored his greatest successes to launch his own company, Show Dog Records.

With the shutdown, most of the DreamWorks staff and artists will be absorbed into sister labels MCA Nashville, Mercury and Lost Highway Records. Three staffers are being let go. A source says they are all at the assistant level.

Another factor in the closure is the looming termination of UMG's right to use the DreamWorks name, according to a source. As a term of the deal when UMG purchased DreamWorks SKG for $100 million in 2003 -- separating the latter from its film division -- UMG had to give up use of the DreamWorks name by the end of this year.

With the exception of a dedicated promotion team, most of the DreamWorks staff already had additional duties at the sister labels ever since DreamWorks merged with Universal Music Group Nashville (UMGN) in May 2004. VP of promotion Bruce Shindler and VP of field promotion George Briner will be reassigned to similar duties. The remaining UMGN labels are expected to expand their promotion staffs in the coming months, absorbing some of the former DreamWorks team.

Two members of that team, regional promoters Lisa Owen and Suzanne Durham, have already joined the Show Dog staff. DreamWorks artist Scotty Emerick has also followed Keith to his new label.

With Keith and Emerick gone, the DreamWorks roster comprises just six artists: Darryl Worley, Tracy Lawrence, Jessica Andrews, Jimmy Wayne, Hot Apple Pie and newcomer Tori Baxley.

None came close to equaling Keith's multi-platinum sales. Lawrence's most recent album, 2004's "Strong," sold 371,000 copies according to Nielsen SoundScan. Wayne's self-titled 2003 debut sold 422,000. Andrews' last album, 2003's "Now," has sold 197,000. Worley's fourth album, last year's self-titled effort, has sold 134,000. And the July debut of new group Hot Apple Pie has scanned 73,000 copies to date.

DreamWorks' Nashville division opened in 1998 under the direction of producer James Stroud, who is now co-chairman of UMGN with Luke Lewis. It had early success with Randy Travis, and later successfully launched Andrews, Worley, Wayne and Emerson Drive.

In its brief history, artists signed to the DreamWorks also included Linda Davis, Asleep at the Wheel, the Nitty Gritty Dirt Band, Tony Stampley, JoAnna Janet, Eric Heatherly, Chalee Tennison, Mike Walker, Michelle Poe, Redmond, Day & Vale (later Redmond & Vale), Shane Sellers, Bill Luther and Lisa Angelle.

At its peak as a standalone label, DreamWorks had nearly 25 employees and its promotion department won Billboard's promotion team of the year award in 2002.

That all changed when UMG bought DreamWorks. At first, Stroud pledged that the Nashville division would remain a standalone operation as the rest of DreamWorks became an imprint of Interscope Geffen A&M. But Stroud reversed that position just five months later and the merger happened quickly after that, resulting in about eight layoffs last year.

"We went from being an independent to one of the biggest and best labels in town, and in the merger we lost all identity," Keith says of DreamWorks. "We were the little dog that barked loud [and] grew up to be a big dog, and when we merged we were powerless."