Steve Gottlieb on Fostering Nine Inch Nails & What 'The Defiant Ones' Got Wrong

Steve Gottlieb
Antoine Verglas

Steve Gottlieb

One of the central segments of The Defiant Ones, HBO's recent documentary about the legendary music and business acumen of Jimmy Iovine and Dr. Dre, revolves around Nine Inch Nails.

Much of the four-part series is about convincing viewers that once Iovine sets sights on something, he makes it happen, regardless of who or what stands before him, and his play for Nine Inch Nails is treated like a prime example of that. Here's the scene in The Defiant Ones: In the early 1990s, Trent Reznor is unhappy with its label -- TVT Records, founded by Steve Gottlieb -- which Reznor describes as "a collection of shit." Iovine has just started his own label, Interscope, and he is smitten by Reznor's scorching, abrasive debut, Pretty Hate Machine. Despite stiff competition from other labels and distrust from Reznor, Iovine manages to convince Nine Inch Nails to join Interscope.

Tom Whalley, former A&R at Interscope, sums up the year-long negotiation process: "Jimmy would not give up, and when Steve realized that he was not going to win the battle, he agreed to sign over the contract to Interscope." 

Except according to Gottlieb, that's not the way it actually went down: TVT set up a 50/50 partnership with Interscope that lasted until 1998 and included not only Nine Inch Nails but acts that Reznor signed to his own label, notably Marilyn Manson. (This was affirmed by Dennis Dennehy, Interscope's current EVP of marketing and communications.) In addition, Gottlieb disputes several things Reznor remembers about their interactions -- in The Defiant Ones, the Nine Inch Nails' frontman alleges that Gottlieb called his first album "an abortion" and tells him "you fucked up what could have been a good career."

Apple did not respond to requests for comment.

"All I want is that the facts are straight," Gottlieb tells Billboard, sitting down for an interview in his office in downtown Manhattan, where he now runs Shindig, a technology company that focuses on video conferencing. These are excerpts from the conversation.

Where would you like to start?

I was very happy when Jimmy asked me to be a part of the documentary. I think the show was ambiguous. The show quotes Jimmy as saying, "I had to think differently and go for a partnership, and then I had to call Trent, his management, Steve every day for a long period of time." But that was under the guise of having already established a partnership. So all those conversations were conversations between partners.

What happened was, lots of people were approaching me -- the reality was, if I wanted to, I could have done a deal with any of them. I thought if I'd done a deal with Doug Morris [at Atlantic Records], who had invited me for lunch maybe five months before Jimmy contact me, or Seymour Stein, or any of the others who had tried to suggest that they would do better with Nine Inch Nails -- [but] I didn't think that was the case.

I met Jimmy and I thought differently: Here was someone starting a label, and I saw Trent as a marquee artist. I knew if Trent delivered "I Wanna Fuck You Like an Animal" [the song "Closer"] to Atlantic Records, they wouldn't know what to do with it. Sony might have offered whatever amount of money, but Don Ienner was not gonna go to bat for "I Wanna Fuck You Like an Animal."

You're not that old: back then, alternative music was a small sub-genre of radio, and certainly anything as aggressive as Nine Inch Nails -- we didn't even win in alternative music, I think we peaked at ten because of the climate back then, which was not friendly to what Trent was doing. The magic that I perceived with Jimmy was that he was starting something new, and he was creating an opportunity where Trent could flourish, not only as an artist, but as the kind of marquee, cornerstone artist around which someone like Jimmy could build a label. It was very calculated that Jimmy's appeal, when it came, resounded with me totally differently than all the pitches I got from 50 other labels. Anybody would've been happy to do a deal with Nine Inch Nails -- he was the hottest thing going at that point in time.

Our negotiation took 72, maybe 96 hours. Jimmy flew in on a Thursday. The deal was done Sunday. I actually signed my piece of it after meeting with Bob Morgado, who was the head of Warner Music Group, that Monday morning on one final issue. That was the period of time it took us to negotiate.

What happened then was: we all thought we were going to fly first-class to Germany and tell Trent the good news. He was getting a mega new deal. Unfortunately, someone else within the Warner Music Group caught wind of the deal and badmouthed Jimmy, the deal -- he didn't need to badmouth me -- to Trent. So we got the message, "don't come, we're not going along with this deal."

Do you know who that person was?

Seymour Stein.

The reason?

He wanted to sign [Reznor]. That's why the joint venture was important for Jimmy. If it was just [that] I was selling off the contract to make money, then Time Warner would have said, hey, great, we've got the contract, let's move it to Rick Rubin's label [Def American Recordings, which later became American Recordings], or to Seymour's label [Sire Records]. Or let's move it to Mo Ostin's label. In fact, what was going on at that time was there was this major battle between Mo Ostin and Doug, East Coast versus West Coast. And the reason why Bob Morgado, who was head of the group, was involved, was that he was under pressure to see that the deal got moved to the West Coast. All of the West Coast labels who had been talking with Trent and already had a relationship with Trent were going crazy that the Warner Music Group was going to support a deal that was helping the East Coast. There was a lot of drama.

As an entrepreneur, I invested a lot in Trent. He was the hottest thing in the world -- not for no reason. I was very proud of the marketing campaign we did for him. It was, in my mind, revolutionary. I built my company having developed an expertise in grassroots marketing that was completely different from the major labels' approach to marketing. In 1989, record labels did not do two-year campaigns for alternative artists. They didn't go three singles deep for an artist who was at 400,000 units. Not back then.

We were in a genre where people had very capped expectations about what was possible and about how much money and effort to put behind something. Our campaign with Nine Inch Nails broke the rules. From the beginning, the commitment was exceptionally high: from doing a pre-release single -- with a video, not waiting until it was a successful single 'til we did the video -- to all the pre-release promotion and hype we did. That whole summer we did late-night TV ads, 15-second spots that were just the video. To our use of getting mixtape of Nine Inch Nails out to every hip clothing store, every fashion store, to models, designers, our whole branding of the Nine Inch Nails logo and making it everywhere, distributing hundreds of thousands of stickers -- those didn't end up on kids' skateboards by accident. That all had to be fostered and cultivated.

I haven't said the key thing in breaking a band: it's in finding and helping a band establish their first fans. The nature of grassroots marketing was to make sure that everyone who hears about the band hears about it from the cool kids. You gotta choose to reach the cool kids first and make them evangelists by super-serving them. That's a very specific kind of marketing concept -- I don't think they have it now, but they didn't have it then -- that we were very sensitive too.

The tours that Nine Inch Nails was on didn't happen by accident. They happened because of my effort knowing the management of the two bands and my campaigning to get those tours. And the label giving him substantial tour support.

So when it came about that it looked like there was difficulty and we felt like we need to find a creative solution, we felt like we had done a great job, and we wanted a solution that would make us winners as well as the artist. The deal reflected the fact that we did a great job for Trent. That we believed in him and wanted him to enjoy the fruits of his success in the future. Most importantly, we found a home for him and a circumstance where he would be unfettered, where he could really blossom. We went to a label different from one of the corporate, Top 40 labels that might have given us the biggest check.

You can imagine the struggle within Time Warner. "Why would you let a joint venture have it when we could compete with this offer and own it entirely?" Well they couldn't do that, because I wasn't interested in giving it to them entirely. I wanted Trent in a smaller company that was more empathetic with his goals and was going to give him the freedom that he wanted. That was as much, I think, our agency as Jimmy's. And what should be celebrated in the deal is the fact that we did a win-win-win: something that was great for Jimmy and for Interscope, something that was great for us, and something that was fundamentally great for Trent. That's why I wanted to correct it.

And it's also the facts. To the extent that this was a quintessential example of the importance of independent labels to break new ground. I think it's important the story get told to continue to make clear that independent labels have a fundamentally important role to play. They're not some silly farm system that should not be taken seriously. We broke Nine Inch Nails before Interscope got involved. Pretty Hate Machine is within a couple hundred thousands units of being his biggest album ever. "Head Like a Hole" is one of his top three songs ever. This was not a pit stop on his career: this defined him. That record defined him. The marketing defined him. We found that first cadre -- the people that saw him on that first tour saw a tour that they can talk about thirty years later. This should be an inspiration for independent labels.

And the truth of what Jimmy did is the brilliance that he created that circumstance -- not what ended up being told in The Defiant Ones. We were partners for eight years. He was a great partner. Probably unlike many other partnerships between indie labels and major partners, he made good on it. Lots of these end badly. I think we got a very fair valuation when the time came that he wanted to buy us out of our joint venture. That came in 1998.

Did the initial deal you set up with Jimmy, the one that was rejected after backchannel sabotage, end up the same as the deal Trent got after the year-long negotiation that takes place in The Defiant Ones?

No. Trent made additional demands. Jimmy and I both had no problem agreeing to them and obviously ultimately making him happy.

Was his label, Nothing Records, already a part of the joint venture?

I think that was one of the things he added on. He wanted a label. Those were much less common in that time. But Jimmy had no problem with it, and I had no problem with it.

Why do you think The Defiant Ones presents the story the way it does?

I think the director [Allen Hughes] wanted drama. I think what Jimmy says is accurate. We spoke intensely during that period when Trent wouldn't talk to Jimmy and there was a challenge of: how do we strategize to get him to cooperate when all these people are in his ear telling him not to cooperate? But then Allen's editing put things all out of order. It was during that period that we were talking that [Jimmy] ended up finally flying to New Orleans and meeting with Trent. As I recall, that first meeting was at the airport. But maybe that was the first meeting with the manager. It was so crazy that even getting a meeting with the manager took months. It was difficult. And there was tremendous suspicion. And there was hope, I think, on their part, initially, that they were just gonna not go along with it. They never wanted to give Jimmy a chance to hear him out. Likewise they were suspicious to the extent that I thought it was a great deal and great for them. It took that year to win them over.

What was the source of Trent's dislike of TVT if you supported his vision around this record? He says some pretty unkind things.

All I can say is what he describes is clearly a fabrication. The album was produced in five studios on two continents over a period of six months. It was not that he went away and delivered me an album and I said, oh, what a surprise! Every mix, every song was reviewed. The public now has all those mixes. The reality was, Trent never chose to reissue the album differently than it was. The album as released was what he wanted apparently. And we were supportive of it from day 1.

The story he says that he delivered the album and I made a comment -- clearly not true because I was involved in every step of the album production. I went to Boston for the sessions with Flood. I intervened when he felt John Fryer wasn't taking enough of his input. I was at the sessions in New York. Trent said, my dream list of producers would be Flood, Adrian Sherwood, Keith LeBlanc and John Fryer, and I got him those people. Those who were who he wanted. I helped manage those relationships to make sure they listened and gave Trent his due respect. He was a first-time artist -- sometimes, first-time artists [are people] producers don't want to take direction from. They feel hey, I'm a successful producer, I made tons of records. I was Trent's advocate in this process and certainly recognized his talent.

So whether Trent needed an excuse what is not an unnatural desire for an artist -- to make a lot of money and get on a major label -- and felt that this was the best way of portraying it, I don't know. But at this point his story is clearly not true. And I think our record of commitment to him is pretty demonstrable.

Was there a time where you two were getting along and then at some point the relationship turned fractious?

In my mind there's a real question to what extent this was scripted from the beginning. To a certain extent, Trent is a performance artist. He wrote me a ten-page letter early in the relationship which he signed, "your paycheck." Most of my dealings with Trent were through a manager that he ultimate sued. I don't know how it was resolved but the accusations were that the manager who stole from him and lied to him and all the rest. So I don't know what to extent it was an impression created by management when there wasn't a lot of contact directly between Trent and I. I can only speculate.

I can tell you what he described didn't happen. And in all these 27, 28 years, he's never really specified -- this was the first time he specified that I said something. Years ago, it was I didn't get paid. Then it was other things. But there's never been anything really specific. Look, I feel terrible. I'm not happy about it. It's something I wish I could talk to him about.

Have you tried reaching out to him?

Yes. Most especially while it [the negotiation process] was happening. One thing I would say: I never let if affect our commitment to Trent. There were vague comments [from Reznor] in the very early days in the press that were difficult to understand. I just assumed that ultimately our hard work on his behalf would be appreciated and understood.

Did you reach out to Allen or Jimmy about what you feel is a factual inaccuracy in the series?

I would welcome you to contact them. I'm not looking to take away from anyone else's shine. But I do want the facts to speak for themselves to the extent they do.