Jimmy Iovine’s gone. But the label he helped build isn’t missing a beat.
A version of this article first appeared in the June 14th issue of Billboard Magazine.
Your company is losing one of the biggest names in the business, a genuine titan who has tight personal ties to scores of top-selling artists and has put out many of the highest-grossing albums of the last quarter-century. So you’re freaking out, right?
Wrong. Jimmy Iovine’s exit from Interscope Geffen A&M as part of the Apple-Beats deal may have robbed the label of its house guru. But the transition to the new chairman/CEO, John Janick, 36, is going about as smoothly as a succession could. That’s due in no small part to Iovine, who saw it coming -- he was in talks with Apple CEO Tim Cook long before word leaked, although the deal ultimately happened "quickly," says a source -- and put a strong plan in place.
In fact, Janick has been “100 percent running” day-to-day operations for at least a year, adds an insider at Universal Music Group (UMG), Interscope’s parent company, and looks to have won the hearts and minds of IGA staffers, while Iovine was crowing that he had set out to accomplish "something that none of his peers had done: find a successor," according to one UMG executive. Indeed, the source credits Janick, who only arrived in the summer of 2012, with propelling Interscope to its first No. 1 ranking among U.S. labels last year. (It tallied a 7.7 percent market share in album and tracks -- albums plus track-equivalent albums, or TEA, according to Nielsen SoundScan.)
That doesn’t mean it’s all smooth sailing ahead. Iovine’s reputation was critical in helping Interscope build its formidable talent base. Will.i.am credits Iovine with convincing The Black Eyed Peas to sign, despite much more lucrative offers from other labels. “Jimmy was like, ‘Look, Will, you can go sign for a million. I’m not going to give you that kind of money — it’s ridiculous. But I promise if you sign with me, no matter how many records you sell, you can always make records with me until you guys get it right.’ ” That kind of personal power may be hard to replace. “When you lose someone of that caliber, it has to have an impact on the company,” says Sony/ATV Music Publishing chairman/CEO Martin Bandier. “It’s like the Yankees losing Robinson Cano.”
And some industry executives question Janick’s hip-hop pedigree, speculating that Interscope could lose traction with rap artists -- one of the label’s strengths through the years. (It has been ranked as the No. 1 or No. 2 rap label in the United States every year since 2009, according to SoundScan.) However, Eminem's manager Paul Rosenberg has faith in Janick's management style, telling Billboard, "[Janick] didn't come in the door telling everybody what they should and shouldn't be doing and imposing his will. Quite the opposite: He's there when you need him and happy to help whenever you ask but he isn't inserting himself just to be present."
Rosenberg is not alone. By seemingly all accounts, Janick, who was unavailable for comment, is drawing rave reviews -- and also is reflecting well on UMG chairman/CEO Lucian Grainge, who wooed him from Warner Music Group, where Janick spent 16 years helming Fueled by Ramen (fun., Fall Out Boy, Paramore).
Warner fought to hang on to Janick, but was outmaneuvered and outspent by Universal, according to multiple sources. “John wanted more and had bigger ambitions,” says a former colleague still lamenting Janick’s exit. “He was smart, detail-oriented and cautious -- he came from indie roots and took his time while wearing multiple hats. He’s someone who’s in the business for the right reasons.”
WMG owner Len Blavatnik and WMG CEO Steve Cooper's initial efforts to rein in executive salaries, which led to Janick walking out the door, could prove more costly in opportunity lost than the salary increase they saved themselves.
In the meantime, the pending acquisition of Beats by Apple and the ascension of Janick with Iovine's blessing heads off a potentially messy problem for Grainge. It means that the UMG chairman and CEO doesn't have to deal with the drama of imposing a timetable on Iovine, nor does he have to contend with what some viewed as Iovine's preoccupation with recently launched Beats streaming business while still under the employ of UMG (no doubt the nearly $500 million payout UMG stands to receive from its investment in Beats Electronics would erase any hint of animosity).
Not all industry successions plans have gone so well. For instance, when Vivendi imposed a succession plan on Doug Morris before he was ready to go, it worked out fine for UMG in the long-run, as it was able to maintain its profitablity and competitiveness, but in the short-term, it proved to be messy as Morris bolted to head up Sony Music Entertainment, which ignited tit-for-tat signing wars for executive and artist talent, all of which escalated the cost of doing business.
Indeed, as IGA faces a future without Iovine, Janick can count on one of the more stable management teams in the business, which includes vice chairman Steve Berman, president of promotion Brenda Romano, head of business affairs David Cohen and senior vp of artist strategy and media Dennis Dennehy, all of whom have been at the company for at least 15 years. Says Rosenberg: “A lot of people we’ve worked with since the beginning are still there. It's bittersweet for us. Jimmy's presence will be missed, of course, but Interscope still feels like home."
And with new albums by Maroon 5, Lana Del Rey and Robin Thicke on the horizon, along with U2 and Kendrick Lamar, both of whom are said to be readying releases for the fall, that should help the new boss ease worries about the post-Iovine era.