How UMG's New Troika Brings Peace (For Now)

Lucian Grainge evens the playing field for three ambitious lieutenants as Barry Weiss moves aside

Unbundling is the word buzzing  around the hallways of Universal Music Group these days following the April 1 announcement by chairman/CEO  Lucian Grainge that the company was splitting Island, Def Jam and Motown into three stand-alone labels. But behind the decision was a  dash to the top by a trio of UMG veterans.

Industry observers postulate that the democratic split, naming Steve Bartels president of Def Jam, David Massey president of Island and Ethiopia Habtemariam president of Motown (in addition to her duties as head of urban at Universal Music Publishing Group), is meant to assuage the trifecta of execs, all of whom were gunning for a bigger role within UMG, by providing each with a fiefdom of his or her own. "Everybody gets what they want," says a source. "Bartels gets to be the big cheese; Massey, who's very sharp, gets more bonafide sources of A&R and promotion; and Ethiopia answers Capitol's need for an urban department, while [Capitol Music Group chairman/CEO] Steve Barnett gets the most talented African-American woman in the business." Another bonus for going along with the grand Grainge plan? Sources say Republic will inherit Island's market share, while Capitol will absorb Motown, with the company moving into the Hollywood tower.

Also getting a boost is Republic Records chairman/CEO Monte Lipman, who, with Island/Mercury's 2 percent share, will head the No. 1 label in the country, pushing ahead of Interscope with a 10.2 percent market share in total combined U.S. album and track sales (as of March 30). Some speculate that a larger role is on the horizon for the seasoned executive. "With Monte, it's slow and steady wins the race," offers an observer. "You have to think: 'In three to four years, what does it look like?' "

Indeed, plenty of questions remain, like why now? "Island Def Jam was not running effectively," offers another insider privy to the behind-the-scenes talks. "Nothing was getting done and leadership was sending mixed messages." This was especially true of Barry Weiss, who steps down from his role as chairman/CEO of East Coast Labels in the wake of the restructuring. Although he was "very well-liked," says a company insider, and helped restore IDJ to profitability, he was also seen as "an air traffic controller -- everyone just went around him" and couldn't make his A&R mark. Still, "Barry has plenty of options" within UMG, insists one colleague, who says a joint venture is a possibility. It would appear Grainge agrees, noting in a memo to staff, "We'd love to keep him in the family."