Sid Sheinberg, the entertainment industry titan, died on March 7 at age 84. The obituaries focus on his nearly four decades working with Lew Wasserman to build MCA and Universal Pictures into a global entertainment power. They highlight his discovery of Steven Spielberg, his expansion of the Universal theme parks, his stint running Universal’s TV division and his charitable work.
What isn’t mentioned at all was his passion for the music side of MCA/Universal. I had the privilege of working with Sid at MCA/Universal’s music company for over a decade — and I saw that passion first hand.
I was part of the Irving Azoff team that came to run MCA Records in the ’80s. The company was then the smallest of the industry’s six majors. In reality, it was a “major” in name only. It owned no record companies outside North America and the UK. Some joked that its initials, MCA, stood for Music Cemetery of America: the company where bands went to die. Irving had even sued the company to get out of an album delivery commitment utilizing a novel claim. He said that MCA Records was in breach of the agreement because it was too inept to be considered a real record company. He lost. But his point wasn’t.
Although Irving was a successful artist manager at the time he was brought in to run MCA Records, he was a highly unconventional and radical choice for his new role. He had no experience running a record company. He was not “corporate.” But he was bold, entrepreneurial and disruptive. And that’s exactly what Sid Sheinberg wanted.
Make no mistake, Irving was Sid’s choice. As was the desire to spend MCA/Universal’s resources to build MCA Records into a competitive force in the industry.
For Lew Wasserman, Sid’s boss and business partner in running MCA Inc., the record company had never been a priority. Yes, he was the one who first got MCA into the record business in the first place. In 1962 he bought Decca Records, a label that featured stars of the time like Bing Crosby, Count Basie, Louis Jordan, Judy Garland and Bill Haley. But Lew wasn’t interested in Decca for its record company. Decca owned Universal Pictures and that’s what Lew viewed as the real prize.
Lew was always skeptical about the business side of the record business. He thought it was ridiculous that the industry “sold” albums to retailers on consignment, giving them the right to return the product whenever they liked, even years later. It was so different than the movie business or the theme parks, where once someone bought a ticket or walked through the turnstiles, Lew could book the money.
He used to ask me repeatedly, “What kind of business is this where you never know if a sale is actually a sale?” In fact, after buying Decca he tried to change the industry practice, sending a letter to all the retail accounts announcing a new policy that the stores would have a short period to return an album and then lose that right. Decca was immediately inundated with returns of albums from the ’30s, ’40s and ’50s. Lew quickly had to reverse the new policy and it left a lasting impression on him. This was not a business that was going to be his focus.
But Sid was different. He cared. His choice of Irving was an indication of that.
Irving completely changed the culture at MCA Records — and achieved real success. Under his leadership, MCA Records became the market leader in country music, the market leader in R&B and had massive hits with soundtrack albums. Multi-platinum albums poured through the system by New Edition, Tom Petty, George Strait, Reba McEntire, Fine Young Cannibals and others.
By 1990 it was clear that, despite MCA’s success, organic growth was not going to be enough to make the company truly competitive. So, in one of the most expensive deals to acquire a record label in the history of the music business, Sid orchestrated the purchase of Geffen Records for $550 million in MCA stock. The purchase was transformative for MCA’s music division. It showed the industry that there was in fact a real commitment at MCA to the music business. It brought to the company superstars with massive global appeal like Guns N’ Roses, Nirvana, and Aerosmith. And, of course, it brought David Geffen as well. It provided the critical mass for MCA to open its own record companies around the world. David gave us seven days to complete the deal.
But the tougher challenge was for Sid to convince Lew that he should give David more stock in MCA than Lew owned himself.
When I became chief operating officer of the music group in 1994, I wanted to make a big push into Latin music. It was a genre we had never invested in before. One of my strongest supporters was Sid. His first foray into the entertainment business — when he was still in his teens in Corpus Christi, Texas — was as a DJ and English/Spanish newscaster at a local radio station. He never forgot the power of Latin music.
There were so many other things that Sid authorized that helped us to build the music group; companies he agreed we could purchase, catalogs he allowed us to acquire. Many of those deals are still contributing to Universal Music’s bottom line today.
Sid was tough, demanding and combative, even with his own people. He had strong opinions and wasn’t shy about expressing them — often loudly. If you weren’t completely prepared, he took it personally and there would be hell to pay. You could challenge him and he would respect that, if you knew your stuff. But you had to be ready to battle. He made us all better executives as a result.
He could be stubborn, particularly when he felt someone had taken advantage of the company. I remember spending over a year trying to convince him to allow us to settle a lawsuit that I thought was too time consuming and distracting for our executives. I was ready to settle even if meant forgoing a bigger payday by waiting. Sid refused. He felt the other party in the lawsuit had wronged us and, on principle, believed they needed to learn their lesson so “justice could prevail.” We finally settled on the eve of the trial. And, yes, we got more money as a result of waiting.
Sid was the most honorable and ethical business executive I ever met. As tough as he could be in a negotiator, once he gave his word, it was his bond. Whether there was a signed contract or not, if Sid told you he was going to do something, you could count on it. Behind all the gruffness, was a man of deep conviction and compassion.
Sid was always a towering presence. When I last saw him a few months ago for lunch, his body was failing him. It frustrated him. His roving intellect was still in full force that day. He reminisced about how much the record company had meant to him. He took great pride in the fact that little MCA Records had become Universal Music Group, the biggest music company in the world. He knew he had paved the way.
Zach Horowitz is the former chairman and CEO of Universal Music Publishing Group and the former president and COO of Universal Music Group.