With his stocky build, spread-collar shirts and locker-room charm, Walter Yetnikoff fit right in among the sharp-elbowed power brokers in the music business. He was tone-deaf as well, yet for 15 years the colorful and fiery Yetnikoff steered CBS Records (major labels: Columbia, Epic) to world prominence. He boosted its revenues from $485 million in 1975 to well over $2 billion last year, when it ranked second only to the Warner Music Group. In the process, Yetnikoff managed to foster some of the most profitable talent ever to reach the music industry, from Michael Jackson and Billy Joel to the Rolling Stones and the pop phenom New Kids on the Block.
Yet in the late 1980s his reputation for platinum alchemy began to tarnish abruptly. Associates say Yetnikoff became consumed by personal vendettas against a growing number of enemies — real or imagined — in the $20 billion global music industry. His combative style seemed increasingly to grate his employer, Sony, which had bought the record giant in 1988 for $2 billion. Last week a frustrated Yetnikoff, 57, suddenly bowed out as chief executive. He explained only that he planned to take a sabbatical of several months and then work on unspecified long-term projects with the company.
His departure may have been the result of a coup staged by his handpicked No. 2 man, Tommy Mottola, according to industry speculation, though no successor has been named. Another possible catalyst for Yetnikoff’s resignation is his depiction in Fredric Dannen’s new best seller, Hit Men, a graphic portrayal of the music industry’s seamy underside. In the book, Yetnikoff comes off as a crude, tantrum-throwing and philandering egomaniac. “He’s a brilliant man with a strong self-destructive streak,” contends Dannen. Says David Braun, a top music lawyer in Los Angeles: “Walter got lost in the fantasy of his job, his power and his ability to control a huge part of the pop culture.”
The son of a Brooklyn house painter, Yetnikoff joined CBS Records as a lawyer in 1961 and rose to the president’s job by 1975. He proved to be a superb negotiator, a world-class schmoozer and a self-described “rabbi, priest, marriage counselor, banker and shrink” to the leading rock stars. As the years wore on, however, Yetnikoff seemed to relish waging wars on those he felt were disloyal.
Yetnikoff’s devilish humor, irreverence for authority and barbed tongue were legendary. At a CBS Inc. shareholders meeting in 1986, he fell asleep at the dais — or pretended to. He liked to refer to former CBS chief Thomas Wyman as “the goy upstairs” and to Wyman’s successor, the frugal Laurence Tisch, with whom he feuded openly, as “the kike upstairs.” When Tisch sold the record company to Sony, Yetnikoff, who engineered the deal, walked away with a $20 million bonus.
He soon cost his new bosses a bundle. As Sony planned its $3.4 billion takeover of Columbia Pictures last year, Yetnikoff tried to help out by orchestrating what turned into a costly $500 million deal to hire Jon Peters and Peter Guber, the producers of Batman, to run the movie studio. But rival Warner Bros. contended it had a contract with the producers and sued Sony. In a settlement, Warner won valuable properties, including half-ownership of the CBS record club.
Since the Sony takeover, Yetnikoff’s relationships with his superstar artists have deteriorated. Bruce Springsteen felt so ignored by Yetnikoff, music insiders claim, that the Boss was considering leaving CBS for rival Geffen Records. Michael Jackson, a CBS gold mine since 1975, has also been increasingly courted by Geffen.
Yetnikoff has been dogged by his associations with the industry’s leading roughneck, Joseph Isgro, who reputedly has ties to the Gambino crime family. Isgro is a boss of the “Network,” an alliance of independent record promoters. He was indicted last year and charged with distributing payola, payments of cash or cocaine, on behalf of the major record labels to radio stations to get certain Top 40 records played. But last week a Los Angeles federal judge threw out the case against Isgro, accusing the prosecutors of “outrageous government misconduct” for withholding evidence. Yetnikoff has never been directly linked to payola, but he failed to use his position to fight the practice. “Without a doubt, Yetnikoff was the closest record executive to Isgro,” claims Hit Men author Dannen. “Isgro perceived him as an ally.”
In the end, perhaps three decades in the bumping, grinding music industry are more than any mogul can stand. During the Guber-Peters deal last year, Yetnikoff began rehabilitation for substance abuse. “I think Walter is just fed up,” says music-industry veteran Lynda (“Boom-Boom”) Emon, a former mistress of Yetnikoff’s who is writing a kiss-and-tell book. “He came to the end of his rope and said, ‘What do I need this for? I’m rich.’ ”
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Top albums under Yetnikoff in worldwide sales:
Read more: http://www.time.com/time/magazine/article/0,9171,155493,00.html#ixzz0uSEqAimG
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