CHAPTER 7
The Rhino Label Part Two
The Capitol Years
Harold and Richard had the audacity to create a significant record label and a large catalog of products, all of which were the creations and dreams of other people and other record companies.
—Dan Davis, Capitol Records executive, in jest, 1989
I was in a meeting room in an industrial park in Norcross, a suburb of Atlanta. “How many of you have seen the new issue of Newsweek?” Nobody raised a hand. This was not a good sign. There was a photo of Richard and me accompanying a full-page article on Rhino. I didn’t ask the question because I was craving the recognition or attention, although one might have thought differently had they seen me saunter around the terminal at JFK Airport the previous afternoon with a copy in my left hand or noticed, hours later, how many times I glanced at the priest at the end of my row on the flight to Atlanta, until the moment he flipped past the page bearing my picture in the copy he was reading. I arrived in New York on October 2, 1985, from London, and it was the first time I was able to see the new issue.
We had recently completed our distribution deal with Capitol Records, and a number of us were visiting the branch sales offices to introduce ourselves and make short presentations. That the southern branch salesmen weren’t readers of Newsweek, and that none of their cronies alerted them to the article about the music biz, was a reflection of their lack of worldliness. After my presentation, Jerry Brackenridge, the head of the branch, invited me to stay for lunch, which meant reaching my hand into a paper bucket to pull out pieces of fried chicken. As I chomped away, I would have felt more welcomed if someone had approached me with a comment like, “I really like your label,” but no one did.
Stephen Powers, who had done some consulting for us, owned a small folk music label, Mountain Railroad Records. He got a job in the A&R department of Capitol Records and recommended us to his superiors for distribution. Record companies were still rebuilding after the recession in the early 1980s. As a result, Capitol was looking to bolster its profits and market share. The company would benefit from us in a number of ways: by taking a distribution fee on every record, by earning licensing fees, and from a markup on those records manufactured for us.
Unlike the other major labels, there were few Jews working at Capitol, and we had heard that the executives might have been anti-Semitic. Capitol had a good ol’ boy culture, heavy on sports viewing. There was also a dearth of women executives. Despite our reservations, we had no alternative if we wanted to improve our distribution, so we proceeded to make a deal. It was later reported in Billboard that marketing vice president Walter Lee was named in a suit by a promotion exec who claimed that Lee “abused him” with a three-foot-long cattle prod, poking him repeatedly in the forearm, telling him “You’re dog meat. Go back to your stall.”
I contacted Bob Gibson, one of rock’s most respected publicists, whom I had known in my rock writing days. Bob always impressed me as being smart and having an understanding of the business. He recommended we hire lawyer Jay Cooper to represent us as he had negotiated Tina Turner’s recent signing to Capitol, and was familiar with their contracts and manner of negotiating. Jay did a decent job, and it didn’t seem like it took him that long to make changes to Capitol’s contract.
We didn’t hire outside lawyers much. I negotiated most of the contracts myself, but I had no experience with a distribution agreement. In order to avoid the shock of receiving Cooper’s legal bill, Richard and I calculated what we thought was the most he would charge us. Richard put the bill on my desk and wrote at the top, “Read it and Weep.” The bill was for two and a half times the amount we had calculated: it totaled $27,000. There was no hourly computation. We asked Jay about it. He said he made his calculation based on the deal, as that’s the way he did business. It was our first experience with the ethics of music business lawyers, and not our last. Jay did not divulge, up front, that he did not charge on an hourly basis, as most lawyers do, and he did not reveal how he calculated what to charge, and therefore his estimate of what our bill would be. He further justified his charge by saying that it included any work that was needed if there were problems with the agreement. He agreed to shave four thousand off, so Richard felt we should pay it because we didn’t want to alienate him if we needed him in the future.
The change took effect in October 1985. Capitol’s distribution was nation-wide, and they were contracted to pay us at the end of every month. It took well over a year following the change for us to receive the majority of the money due from our prior distributors, and some money was never collected.
For our first meeting with Don Zimmermann, the president of Capitol Records, Richard and I presented ourselves at the Capitol Tower in Hollywood wearing suits and ties. Don was unshaven and dressed casually: jeans, a loose-fitting pull-over shirt, and tennis shoes with no socks. We felt like country bumpkins dressed in out-of-place, ill-fitting suits. Next we saw the manager in charge of manufacturing. His small office looked more like a hunting club: wood paneling, green carpet, and wooden ducks. Welcome to the record business.
Despite our reservations that the Capitol guys seemed conservative, we got to know them and like them, especially national sales director Joe McFadden, president of sales Joe Mansfield, and vice presidents Dan Davis, Dennis White, and David Kronemyer. Similar to the Warner Music Group’s sales division WEA, their distribution wing was named CEMA, from the first letters of the primary owned labels: Capitol, EMI, Manhattan (jazz), and Angel (classical).
Bob Cahill was a real find. Sharon Foster, our head of human resources, had worked with Bob at Integrity Entertainment Corp. (the Wherehouse Records chain) and thought he would be a good head of sales even though he had no direct experience dealing with accounts. Because we couldn’t compete with the salaries the major labels were paying, our goal was to identify those who had potential, even if they lacked experience. Cahill was a man of many quirks who gave off a frenetic energy. He looked like the younger, goofy brother of movie villain Richard Widmark (Kiss of Death) when he played psychotic characters: the same manic grin, the same blond hair, and the same high forehead. Bob tried to look hip, with a shark’s tooth dangling from his left ear, but the black plastic rims of his spectacles seemed out of place, and his thinning hair pulled back into a ponytail only made him look like he had had a cheap facelift. When he was excited, he bobbed and weaved in his office chair like a Jack-in-the-box on a spring.
After Cahill got to know Capitol’s regional sales staff, we had him provide an assessment for us. As in any organization, some people were more effective than others. The South was an underperforming area for us, so he provided this overview of branch manager Jerry Brackenridge:
This is a man very paranoid about keeping his job, whose main focus is meeting his monthly quotas as dictated by the Capitol Tower. He will respond only to positive feedback, and views any negatives presented as personal attacks directed at himself and his staff. Classic big fish in a small pond syndrome; he thinks he deserves a lot of respect for being where he is for so long. He’s an absolute dictator of Capitol staff in the southeast who motivates by intimidation. Acts only as administrator of branch activities, and has as little contact as possible with his account base. Doesn’t work catalog product at all, ours or his. In short, an overly sensitive good ’ol boy suffering from job burnout.
Quality was one of the hallmarks by which we defined our company. We put more money and time into our reissues than other labels, resulting in records that were more satisfying to our consumers. Because cassette tapes were mass-produced at a high copying speed, they didn’t sound as good as vinyl records. It took some convincing on Capitol’s part to encourage us to manufacture in this format. Their reasoning was that some customers preferred the portability of cassettes, and some retailers wanted to sell them. They were right. Our vinyl always sold much more than our cassettes, but the cassettes added to our sales.
There was an important point that Jay Cooper overlooked in our contract. In most wholesale businesses, goods are sold to retailers one-way, which means they can’t be returned. But returns are routine in the record business. It’s often hard to predict if a new record will become a hit. Often, in anticipation of success, a label will ship a large number of records so a store won’t run out if it becomes a hit and sells. If it flops, the records will be sent back to the label. Sometimes product is shipped because the label hopes that retailers will get excited and want to promote an album that appears to be a success. Sometimes this can backfire. The soundtrack from the 1978 film Sgt. Pepper’s Lonely Hearts Club Band experienced hundreds of thousands of returns, as did a compilation of comedic moments from The Tonight Show.
Even though we were not in the hits business, and not subject to those kinds of returns, the Capitol contract put their company in first position regarding a lean on our assets in case they had so many returns on our product that we ended up owing them money. The stigma that 100 percent of the records we ship could be returned to us also made it difficult to obtain a bank loan. A bank loaning us money would want to be in a first position if Rhino experienced financial difficulty, so it would be paid back before any other creditor. But as Capitol was in the first position to be paid back, it made any loan to us riskier for the bank, so they were reluctant unless we got that point amended. Jay Cooper had overlooked this in the security agreement. It took some time, but we got Capitol to agree to put their company in a secondary position to any bank loan.
As much as people liked our logo character, which we named Rocky Rhino, we received complaints about the pimples and threatening expression. Our art director, Don Brown, thought that Rocky should move past his teen look and elected to clean up his rough skin. I had Scott Shaw, an artist Bill Stout recommended, create an alternative standing Rocky logo in a position copied from sixties label Parrot (which released records by Them and the Zombies). Don devised a new typeface for the company name inspired by another of my favorite sixties labels, Immediate Records. Immediate was an independent company cofounded by the Rolling Stones manager, Andrew Loog Oldham. It had noteworthy artists—Small Faces, the Nice, Amen Corner—hip graphics, and clever slogans such as “Happy to be a part of the industry of human happiness.”
Billy Vera and the Beaters generated Rhino’s only US hit. With a recording career stretching back to the 1960s, Billy Vera (born William McCord) made some headway as a songwriter and artist, but had failed to break into the Top 30. Richard regularly saw his band play around town, so Billy felt comfortable approaching him about reissuing the album he had released in 1981 that was now out of print. Because so many of his fans had requested it, Billy told Richard that he wouldn’t lose money. Richard turned the project over to Rhino’s head of A&R, Gary Stewart, to work with Billy on creating By Request, a new compilation from the two Alfa Records albums, featuring live recordings at the Roxy Theatre in West Hollywood. Billy rerecorded one of those songs, “At This Moment,” at the request of the producers of the top-rated TV show Family Ties.
It was a song that almost didn’t survive being dropped into the wastebasket. When Billy was thirty-three, he met a beautiful, twenty-year-old woman. On their first date she told him about breaking up with her boyfriend. Billy wrote a song from her boyfriend’s perspective, but he couldn’t figure out a way to finish it. In most cases he would have thrown it away, but this time he didn’t. He dated that girl, but it wasn’t until she dumped him a year later that he knew how the song should end. Alfa had originally released Billy’s recording as a single, but it only got up to number 79 on the Billboard chart.
Our reissue was selling moderately, certainly in line with Billy’s projections. The producers used the song again on Family Ties, this time on back-to-back episodes when the main characters Alex (Michael J. Fox) and Ellen (Tracy Pollan) were having difficulties with their romance. Fans referred to it as Alex and Ellen’s theme song, and that exposure made the record a hit. Rhino’s young marketing and sales force rose to the occasion and the record hit the top of the charts in January 1987—all without having to spend any money paying independent promoters, a questionable and very costly practice that the labels felt they had to support. We could have sold more, but one of Brackenridge’s sales guys, one of the two who covered Florida, didn’t know that Vera’s hit was one his company distributed.
In early 1987, as “At This Moment” ascended the charts, I placed a call to Seymour Stein—with whom I hadn’t spoken since that encounter at MIDEM—to see if he had any suggestions on which companies would be good to license the record to in foreign territories. Seymour was known for his knowledge of the international market. When his secretary told him I was on the line, I could hear him ask her, “Is he calling about the money I owe him?” He took the call. I told him that’s not why I phoned, but he wasn’t much help.
At the end of January I attended MIDEM again, since I was in charge of licensing the album to other countries. Unlike my previous time at the convention, I could set up as many meetings as I wanted, as it was rare for somebody to have a record that was currently number one in America available for licensing. The biggest advance I was offered was from Fanfare Records in England, whose head of A&R, Simon Cowell—later of American Idol and X Factor—loved the record.
Prior to his hit rejuvenating his recording career, the forty-two-year-old Vera was scraping together a living: a trickle of songwriting royalties, infrequent acting jobs, and club dates with his band. He said, “I don’t know what I would have done if it weren’t for Rhino.” Fox and Pollan married in real life, after which Fox said they couldn’t get on a dance floor anywhere in the world without the song being played by a DJ or band. The album sold well enough for the RIAA to certify it a gold album. Customarily, a framed award would be sent to the artist and to the record company. In gratitude for our company-wide success, Richard and I bought gold records for all of our employees.
Dennis White, who made our distribution deal and was a supporter of our label, told us about imminent changes at Capitol. They were bringing in Joe Smith to head the label. Smith had built his reputation growing Warner Brothers Records with Mo Ostin. He was a legendary figure to me. I became familiar with the Warner execs from reading the label’s clever in-house Circular magazine (with contributions from John Mendelsohn and Jim Bickhart). Joe was affable, a raconteur. He introduced himself to me backstage when the Faces played the Long Beach Arena in July 1971. I don’t know if he thought I was a member of the band, or merely responded to the Jethro Tull English-styled t-shirt I wore that Warner had given away as part of a promotion.
Joe fared less well when he next ran Elektra/Asylum. The label lost $27 million in his last two years as chairman. Dennis said the decision to bring in Joe was based on his relations with successful acts, which he could then lure over to Capitol.
Joe’s office at Capitol was more befitting a basketball executive than a record company president. There were framed photos of Lakers players displayed around the room, but nothing that showed any interest in music. Joe was a courtside season ticket holder to the Lakers’ games. We had a meeting during which I was expecting Joe to congratulate us on having had our biggest sales month, but it never came. As we were leaving, I mentioned it to him, and he responded that he had known, but I don’t think he’d been aware. Despite White’s expectation, the only big name signing Joe made was ex-Warner act the Doobie Brothers. Capitol revived their flagging career, but only had one big-selling album with them.
We didn’t get off to a good start with Joe. Not long after he became president he signed Billy Vera. Neither Joe nor the other execs at Capitol had the courtesy to discuss this with us or to consider that we might have wanted to sign Billy to a new deal ourselves. Billy didn’t tell us, either. Even though we didn’t have Billy signed as an artist to Rhino, it felt as though Capitol, our distributor, had stolen Billy away from us. They even provided some icing on the cake by getting Billy a star on the Hollywood Walk of Fame, right in front of the Capitol Tower. Joe claimed that he hadn’t been at the label long enough to have been aware of our relationship.
There were other problems. Rhino had, potentially, two new albums that could compete with Vera’s Capitol debut. One was a soundtrack for the Blake Edward’s film Blind Date, which featured three of Billy’s songs, and we also could have released the other Alfa Records tracks. We worked things out, but neither side prospered. Blind Date, despite starring Bruce Willis and Kim Basinger, fared only modestly at the box office. Our soundtrack made Billboard’s album chart for one week; Capitol’s album didn’t even chart. We felt marginalized by the incident.
That ruffling of our feathers notwithstanding, we were doing well. In 1986, our first full year distributed by CEMA, our sales doubled. Our reissues sold consistently, and we had a significant number of sales as Billy and the Beaters went up the charts. Most of all we benefitted from the Monkees revival, charting with six of our Monkees albums. Along with Arista’s Greatest Hits, the Monkees matched Led Zeppelin and U2 in having had seven albums charting concurrently on Billboard’s Top Pop Albums chart in the 1980s. We sold 150,000 copies each of the Monkees’ first two albums.
In 1987 our sales nearly doubled again, to over $14 million. Billy and the Beaters and a newly recorded album by the Monkees were our best sellers. We also benefitted from a licensing deal I made for the Bearsville catalogue, of which Todd Rundgren and Foghat were the biggest selling artists. In October we were able to hire our first in-house attorney, my friend Bob Emmer. We now had a staff of fifty.
Richard and I went to an antique advertising fair at the Pasadena Civic Center. We were surprised to see a couple of vendors selling newly made 78 rpm records of older hits. It was clear these were unlicensed bootlegs copied from records. Richard had a vintage jukebox and explained that these machines only played 78s. A collector could retool his machine to play 45s—which were available to purchase—but then the value of his jukebox would decrease. We decided to produce a proper set that sounded good, unlike these bootleg recordings, or the worn 78s a collector found at swap meets and thrift stores. Jukebox Classics included fifty hits on twenty-five discs in a box. Although we only sold a little more than a thousand, it was profitable because the list price was high at $125. This odd item befuddled the CEMA salesmen. It sold well enough that we followed it up two years later, and then a third box in 1993 of masters from the Atlantic catalogue.
Richard encouraged inclusiveness, which resulted in employees feeling more connected to the company. He had employees who would otherwise not be credited on an album added in the thank you sections even if their contributions were nil. The fallout was too many meetings and, at times, a too-many-cooks-spoil-the-broth lack of effectiveness.
I had a number of ideas for our tenth anniversary, but many were stalled by the committee process. Jeff Gold, now working at A&M Records, produced a twenty-fifth anniversary book for them, and I was looking to make one for us. It never happened. Our anniversary party was held at the Santa Monica Pier on November 12, 1987. It was a good one, complete with a roving doo-wop group and rides on the Ferris wheel. I was able to entice enough celebrities to have attracted a multipage feature in Mojo magazine, had it existed at the time: Arthur Lee and Bryan MacLean (Love), Howard Kaylan and Mark Volman (the Turtles), Ron and Russell Mael (Sparks), Spencer Davis, Greg Kihn, Walter Egan, Billy Vera, Gloria Jones and her son Rolan Bolan, and the Firesign Theatre. The primary reason for putting effort and expense into an anniversary is to benefit from the press and media exposure, while the celebration is secondary. I was disappointed that we got no TV coverage or notable print articles.
In late December we moved to a much larger building in Santa Monica, formerly a machine shop, with depressions in the concrete floor where equipment had been extracted. There was lots of room to build offices, and parking spaces for seventy cars. Unlike our previous location, there were two restaurants we could walk to, and in an example of being decades ahead of a trend, there was a semi-gourmet food truck that stopped in front of our loading dock across the alley from where architect Frank Gehry had his offices.
In recognition of our tenth anniversary we asked the city of Los Angeles to proclaim a Rhino Records Day, which they designated on February 29, 1988. We rented a bus, and Richard and I, Flo & Eddie, Billy Vera, Dr. Demento, and a number of our employees made it to the mayor’s office for the ceremony. Even though Mayor Tom Bradley signed the proclamation, he wasn’t there, nor was the deputy mayor. In the presentation room the wind quickly dissipated from our sails. The sole newsman anchoring the area, an old-time photographer with an inch of ash oozing from the end of his cigarette, took note of our arrival. With sagging eyelids and an overall defeated look that recalled the cartoon dog Droopy, he halfway rose from the bench where he was sitting before he decided that we weren’t worthy enough to merit a few snaps for the Los Angeles Times. A lower member of the mayor’s staff made the presentation.
At a party at director Bill Fishman’s house, I met Catherine Hardwicke, who impressed me with her intelligence and creativity. She is best known as the director of Twilight and Thirteen, but she was then a production designer, most recently on the short-lived New Monkees TV show. Rhino owned a small truck that we took to the set in Valencia and came away with a few abandoned items: a couple of plastic cacti and a chair covered in plastic leaves. The fish-tank coffee table had already been taken. I had Catherine redesign our lobby into a (Rhino) safari motif. A year later, after Richard and I bought back into the Rhino store, I had her design the expansion.
Because we were growing as a company, Richard and I needed to learn more about managing our employees. Neither of us were natural or charismatic leaders. We were more like introverted scientists tinkering on projects in the lab. We loved music, we loved putting together the records we put out, we had a feel for business, but we had no experience and no training to manage a rapidly growing staff. We had both read How to Win Friends and Influence People by Dale Carnegie when we were in our teens. Rereading that book helped us. Carnegie recommends refraining from criticizing and to express appreciation for others’ efforts. Richard turned me on to Tom Peters’ In Search of Excellence (cowritten with Robert Waterman, Jr.). Some of the ideas we had already adopted, like getting feedback from our customers, which we had done even in the store days. Some we were in the process of finding out, like emphasizing our strengths, our reissues. Others we embraced, like considering employees as assets of the company and not micromanaging them.
I had heard about the culture of employment in Japan, where employees were considered part of a family, where they had their jobs until they retired. I liked that concept. While I wanted to cut good deals for Rhino, and wanted us to make a good profit, profit wasn’t my main goal. I thought the product—with support from the organization—would naturally drive profits. I wanted anyone who had a job to be productive and contribute, and I liked the idea of having motivated employees. I thought it benefitted the company in the long run.
Compared to other businesses—even ones in the desired entertainment industry—working at Rhino was like floating through the good-vibes atmosphere in a Donovan song. Even though we had a lot of motivated employees, Richard and I were surprised at how many seemed to be angry or bitter. For many, it was their first real job, and they didn’t have anything to compare their good fortune to. Those who had worked for other record companies valued their experience at Rhino, feeling that they were part of the company, not merely employees. We both would have preferred a more intimate work force of thirty or so, but we couldn’t stand in the way of progress.
Richard, more easily than I, grasped the structural and human resources needs of the company. We both were open to contributions from other employees. Marc Bolan (Rolan’s father) had expressed to me that he didn’t care where an idea came from. He gave an example of a taxi driver who happened to be in the recording studio making a suggestion. He said that if it were a good one, he would adopt it. It made sense to me. As most of our employees would presumably be into music, we wanted them to feel that they could express themselves. If they felt they could participate, they would be more motivated. A case in point was our Golden Throats series, a cousin to film’s Golden Turkey, the so-bad-it’s-good concept. Two guys in our warehouse, Gary Petersen and Pat Serchio, amused themselves by challenging each other to find the worst recordings by celebrities, the best-known example being William Shatner’s overly dramatic reading of the Beatles’ “Lucy in the Sky with Diamonds.” They brought the idea to us and we allowed them to compile an album. The first one was released in May 1988 and sold 57,000.
In April 1987 Gene Simmons (of the band Kiss) made a presentation at our marketing meeting. He and I had become friendly. He was one of three people to contact me after our article appeared in Newsweek, in response to my comment that we wanted to produce movies. We developed a project together. He was at Rhino to pitch us on backing him in a heavy metal label. The genre had been sweeping the nation, to the point where even the most mediocre of bands were selling. It seemed like a good idea, but, as we found out later, we were behind the curve.
In our discussion after Gene’s departure, Bob Cahill expressed that he didn’t think his name added much value. He reasoned that since Gene had shown no exercise of taste in his professional life, why did we need him when we could do it ourselves? Richard and I weren’t into the music, but we felt that we needed to acknowledge our younger employees’ desires to participate in the careers of living, breathing artists, instead of old codgers who might still be on the revival circuit. We liked Cahill, and felt like rewarding both him and the project’s other main proponent, Dave Darus, who did a stellar job working the Billy Vera record even though it was his first job in radio promotion.
Starting a heavy metal label wasn’t that original of an idea, and while it was questionable that our tight purses would have been able to accommodate Gene, I felt compromised because we had appropriated his idea. To his betterment, he made a deal with RCA Records for Simmons Records—the logo, tellingly, depicted a bag of money. Our label, Rampage, made good use of an alternate—not Rocky—rhinoceros logo. The first of our six newly recorded albums came out in March 1988. Overall the venture lost money for us. We only had one successful release, the first album by Nitro. The image that represents the whole affair to me was when Richard and Bob Emmer were corralled by the group into hearing a preview of their second album played at ear-splitting volume in their van with marijuana smoke spilling out, just like in a Cheech and Chong movie. The group’s first album sold 50,000; the second, 11,000.
Back in the store days, Richard would occasionally play a record by the Village People although we weren’t disco fans. Their songs were melodic and fun, even though the group—other than lead Victor Willis—didn’t sing on their records. In the ensuing years, their hit “Y.M.C.A.” had become de rigueur at teen parties. Never mind that the kids are oblivious that the song celebrates a pickup place for young gay men. The vocal group only had three Top 30 hits, and had been off the charts for nine years when PolyGram agreed to license us a greatest hits album. We thought it would sell well, but were surprised at how much. Another of Richard’s (sort-of) jokes had turned into a big seller.
While companies tend to flaunt—or even inflate—their success, we purposely tried to downplay ours. We thought it would be best to be below the radar, or else the major labels would take more notice of what we were doing, to our detriment. As royalty payments rolled into our licensors, our impressive sales became apparent. When PolyGram noticed that our Village People Greatest Hits had sold so well—ultimately 188,000 copies—they denied our request to extend our three-year license and put out their own hits album. The same thing happened with Stephen Bishop’s Best of Bish. Also released in 1988, it sold 54,000 and was still selling when MCA Records turned down our renewal so they could issue their own version.
The first time this happened was when Capitol declined our request to extend the rights to our 1984 Best of the Spencer Davis Group for the CD format. We had sold almost 40,000 copies on vinyl and cassette. Capitol, instead, produced their own CD. It wasn’t a matter of Capitol considering which company would best serve the music, it was pure economics: Capitol thought they would make more money by releasing their own CD rather than extending the rights to Rhino. There were reasons why our reissues were usually better than any other label’s: we grew up with the music and understood its impact, and it was a priority to do a great job and to get it right. As an example, Capitol’s The Best of the Spencer Davis Group CD (issued in 1987 on the EMI American label) featured a photo on the front that didn’t include Stevie Winwood, the lead singer on such hits as “I’m a Man” and “Gimme Some Lovin’.” Stevie and his brother Muff left the group in 1967. The photo depicted the subsequent lineup, with only two members of the original band who played on the tracks. For our package I tracked down rare photos, including an impressive shot for the cover. I had Spencer Davis write the liner notes. Actually I assembled them, from an interview I had conducted with him in 1971. I used only his comments, and attributed the notes to him. Our packages always included composer credits, which theirs lacked. Aside from our loss of revenue, as record fans, the displays of incompetence were infuriating.
As a consequence of the major labels being more proprietary, we had to be more creative in general, and in coming up with ideas for compilations featuring many artists. If a label wanted to hold onto their artists for a best of album, they still might license us a hit for one of our compilations. Richard came up with the idea to package hits CDs endorsed by the Billboard name, as in Billboard magazine, the record industry’s main trade publication. While the majors and other labels usually offered their oldies product at budget and midline prices, Rhino’s were mostly at full list price. The mass marketing rack jobbers had a problem with that. (Rack jobbers typically provided product to retailers that didn’t have their own music buyers, one example being a section in a discount department store.) Despite our quality, they were reluctant to pay more for oldies available at lesser price points. As the racks were responsible for a large number of sales, Richard came up with a lower-priced series we could feel comfortable releasing.
It was also a move to legitimize “the hits” concept. Companies whose brands were familiar from TV advertising, like K-tel, often used versions of hits that had been rerecorded and didn’t come close to approximating the original records. In contrast, we were dedicated to using the original hits and making them sound good. We released our first four volumes of Billboard Top Rock ’n’ Roll Hits in June 1988. It proved to be extremely profitable and became Rhino’s best-selling series. Six of our albums qualified for gold records, all of them hits from the ’80s.
When I first listened to my import copy of Five Live Yardbirds—the only full album the group recorded when Eric Clapton was a member—the playing sounded too fast. I attributed it to the excitement of London’s Marquee Club audience or the amphetamines rock groups routinely consumed in 1964, when the live recording was made. But the reason was a simpler one: it was sped up in the mastering. Bill Inglot proved his value once again when he corrected the speed for our May 1988 rerelease.
Also that month Cahill met with representatives from Author Services Incorporated (ASI), the company that licensed L. Ron Hubbard’s works. Although best known as the founder of Scientology, Hubbard had started out as a writer of pulp fiction. He had written lyrics for a number of songs based on his best-selling science fiction book series Mission Earth. They had Edgar Winter compose the music and produce an album from Hubbard’s lyrics. We invited the ASI reps to attend our next marketing meeting, at which point they explained that from their research, they determined that Rhino was the most creative at marketing among all the record companies, and that’s why they called us. We couldn’t help being flattered and responsive to their proposal. Hubbard’s publisher was marketing Dianetics, his guide to Scientology, as having sold eight million copies. Cahill thought there could be easily one in ten readers who were so devoted to Hubbard that they would buy our album. One in ten didn’t seem unreasonable. If so, that would mean 800,000 albums sold.
Mark Volman was a fan of the books, and assured me that they had nothing to do with Scientology. Despite our high regard for Edgar Winter’s musical ability, we were not impressed by the finished product and should have declined, but we were eager for the sales we anticipated, and we liked the people we met with. Richard came up with a great idea, which was to make the first 3-D promotional video. Elvira had performed a low-budget representation that aired on her local TV show, Elvira’s Movie Macabre. We hired the people she used, and spent $35,000 making it, by far the most we had ever spent on a rock video. Much to our disappointment, the 3-D effect didn’t work very well and neither did the video. After consulting with ASI, we didn’t circulate the video. As a company we were good about not wasting money, and I felt sick that we received no benefit from that expense. We did market the record, but radio stations weren’t interested in playing it. It was released in June 1989 and sales only managed a little more than 15,000, far short of our expectations.
At the video shoot I met Edgar and his wife, and was impressed at how nice they were. Edgar made it a point to tell me that he was no longer a member of the church of Scientology. I thought that as long as we were promoting this new album, we should try to license a “best of.” Gary Petersen, a big fan of Winter’s who we promoted to assist in the A&R department, compiled the album. Whatever money we lost on Mission Earth we more than made up for on The Edgar Winter Collection, which sold 80,000.
All of a sudden, independent film companies were contacting us about buying our company. Over the course of a year, we met with the heads of New Line Cinema (Nightmare on Elm Street), Carolco (Rambo, Terminator), and Atlantic Releasing (Valley Girl, Teen Wolf ). Independently of each other, they thought that it would be a good idea to own a record company with a consistent revenue stream during periods in which they didn’t have any new movies in the theaters. Maybe they all used the same consultant.
In the spring of 1989 we met with Bob Shaye and members of his New Line staff on two occasions. We liked Bob, and saw a similarity to Rhino in how his business developed: from distributor of underground films to success with producing low budget ones. Ultimately, Shaye had second thoughts, owing to his unfamiliarity with the record business. Atlantic Releasing (not affiliated with Atlantic Records) and Carolco soon went bankrupt. New Line was bought by Turner Broadcasting Systems, and later became absorbed by Warner Brothers Pictures.
Although I had met the other three Beatles, briefly—George Harrison told me, “I quite liked your Carl Perkins album”—I had two meetings with Ringo Starr. His best of, Blast From Your Past, was one of Capitol’s most consistent sellers. After leaving the label, Ringo made five subsequent albums, but the quality didn’t approach that of his earlier work. Still, I thought enough fans would want to own a best of volume two, and thought we could compile a decent album from the better tracks of those five. When Ringo expert Risty Alexander and I arrived at Ringo’s hotel room at L’Ermitage in Beverly Hills at 5 p.m. on September 2, 1988, Ringo and his wife, Barbara, were preparing to eat their breakfast of cold cereal. While Risty and I waited on the sofa fifteen feet away, I was struck by Ringo’s inhospitality. He failed to offer us something to eat, or even a glass of water.
When we conferred, he was congenial but low-key. He showed us the bootlegged Sgt. Pepper’s t-shirt he wore under a long-sleeve shirt. Barbara, seemingly dissatisfied with the luxury hotel, asked me about the Four Seasons, as if I had stayed there and could offer an assessment. Our second meeting, four months later, was at the Four Seasons. Ringo approved of our track listing, said he would help with the promotion, and suggested a photo for our cover that had been an unused shot for a previous album.
Starr Struck: Best of Ringo Starr Vol. 2 was released in February 1989. Early the following month, I received a letter from Ringo telling us how pleased he was with the finished product. Six months later I heard from Risty, who bumped into Ringo’s manager, Hilary Gerrard, at one of Ringo’s concerts. Gerrard told him that he was “angry” at Rhino because of our lack of promotion. Irked, I fired off a letter in which I told him what we did, and pointed out that Ringo had done nothing to promote it. He did no interviews and didn’t play a single song from the compilation on that summer’s inaugural Ringo and His All-Starr Band tour. We did what we could, and in the first nine months of release had moved more copies than Blast From Your Past, which sold at a cheaper, midline price. His Capitol album boasted seven top ten hits. Ours had none. We sold 24,000 over the life of the project.
We re-signed with Capitol for another three-year period, and we were able to improve our deal. There were some additional points: one identified specific Capitol artists that we could release compilations on, and another stipulated that Capitol’s promotion department had to work a minimum number of our new artists to radio.
One of the reasons we re-signed was that the new head of EMI Music, Joe Smith’s boss, was Jim Fifield. He had come from General Mills (breakfast cereals) and CBS/Fox Video, and didn’t have any previous record business experience. When he told us that Rhino was one of his two favorite labels—along with blues label Alligator—we thought we now had influence at the top. But his presence didn’t really improve our relationship with the company. The only advice we got from him was to abandon signing new artists. Of course he was right, in that they usually lost money.
Fifield was hired with a mandate to increase market share for EMI worldwide: that is, to increase EMI’s and Capitol’s sales compared to all the other companies in the industry. After a few years Fifield received enormous bonuses—over $10 million in one year—not linked to profitability, but to an increase in market share. As a business owner, I thought any bonus payment not linked to a company’s profit was short sighted. More egregiously, in our modern era, top executives often get stock options that they can exercise regardless of a company’s profitability. A stock can increase rapidly, an executive can cash in, and then the stock can go down.
Capitol became our partners in purchasing a few catalogues of master recordings, most importantly, Roulette Records. We couldn’t fund the entire purchase price, and since we were based in the United States, we made the deal for the rights in North America with Capitol kicking in for the rest of the world. As we were joint venturing on catalogues, and with our sales exceeding our projections, Capitol could have been eyeing us for a larger role. They could have bought Rhino and made our company their reissue division.
Adrian Harewood in our finance department showed me printouts of our inventory indicating that Joe Smith had requisitioned over two hundred of our albums to send to his friends. From my time as a rock writer in my twenties, I saw the liberal disbursements of promotional copies of albums to writers, radio programmers and DJs, and to buyers. Joe, no doubt, was used to allocating whatever he wanted, even if it wasn’t for business purposes. But, as the president of the label, when he sent out Capitol product, Capitol paid for it. When he sent out Rhino product, we paid for it. I didn’t think promotional copies were an effective marketing expense, and I tried to limit how many we allocated. I also looked upon our line as having value, and the more promotional copies out there devalued it. Promotional records tended to end up in the used bargain bins of record stores. Having run the Rhino store, Richard and I were all too familiar with the practice. Through an intermediary, we brought our concerns to Joe’s attention. He promised not to do it again, but he never reimbursed us for the expense.
In July 1989 we released a double album anthology by the Righteous Brothers, a white soul duo who were best known for the hits “You’ve Lost That Lovin’ Feelin’” and “(You’re My) Soul and Inspiration.” The album was selling nicely when, a year later, the haunting strains of their version of “Unchained Melody” were featured in the hit movie Ghost. It rekindled interest in them and our release flew off the shelves, garnering us a gold record and sales of 335,000.
As Gary Stewart was younger than Richard and me, he brought an added perspective and an appreciation for newer music. He noticed that a lot of hits that he enjoyed listening to on the radio as a teen were not easily available, songs like “Billy, Don’t Be a Hero” by Bo Donaldson and the Heywoods, “Na Na Hey Hey Kiss Him Goodbye” by Steam, “In the Summertime” by Mungo Jerry, “Reflections of My Life” by the Marmalade, and “Julie, Do Ya Love Me” by Bobby Sherman. Realizing that these artists were not considered critical favorites and wanting a fun series, Gary, with Garson’s input, titled it Have a Nice Day: Super Hits of the ’70s. The initial four volumes were released in April 1990, with four more a month later. We thought it would be a success but were surprised by how much. The series grew to twenty-five volumes, with half moving over 100,000 copies.
As it relates to the concept of so-bad-it’s-good, or so-bad-let’s-make-fun-of-it, I launched The Rhino Awards. It was inspired by The Golden Raspberry Awards, which “awarded” the worst films, filmmakers, and actors of the previous year. The underlying reason was that quite often in the Grammys, as voted on by the recording professionals who are members of the organization NARAS (National Academy of Recording Arts & Sciences), artists of substance are often ignored in favor of those who are ephemeral. This was particularly true in the first ten years or so, when rock artists got the short shrift. A case in point was the disco vocal act A Taste of Honey, who was awarded a Grammy Award for Best New Artist of 1978—over Elvis Costello, the Cars, and Toto—largely on the strength of their fatuous number one hit “Boogie Oogie Oogie.” I named our award for worst new artist after them.
I invited the media to attend the presentation on February 19, 1991, a day before the Grammy Awards ceremony, at Canter’s Delicatessen. I tabulated the votes submitted by members of the music press, some of whom were presenters at the breakfast event. The winners didn’t show, but we had awards made: a wooden rhino painted gold on a wood base with a brass nameplate. Other awards were The Leroy Neiman Award for worst artist (not picked up by Vanilla Ice) and The Carl “Kung Fu Fighting” Douglas Award for most inferior single.
We got good coverage in the local media, TV news, as well as print. As our visibility was rising in the industry, Richard didn’t feel we should risk offending a winning executive, so we discontinued it after that first year, point made. Still, there was a direct link between the attitude we expressed in sending up a successful act like Led Zeppelin on our 1978 kazoo record and the Rhino Awards.
In similar spirit I wrote a letter to the RIAA concerning our Billy Vera gold record. The RIAA audits a distributor’s sales to determine that, in this case, at least 500,000 albums have been shipped out. But what happens when, as with our album, so many unsold records were returned that net sales dipped below that amount? After a number of weeks without a response, I called the RIAA. The woman I spoke with seemed flummoxed, as no one had ever asked them that before. She said they only certified on records shipped—not sold—and we didn’t have to relinquish our gold record awards. The point I made was that just because a record had received gold or platinum status didn’t necessarily mean that it truly sold at those levels; tens of thousands—if not hundreds of thousands—of records could have remained unsold. Subsequent sales of Vera’s By Request were slow, but steady, eventually recouping those deficient sales, and netting at 510,000.
Our sales in 1990 were $32 million, and we were hopeful of hitting $35 million in 1991, at which point we got a reduction in the distribution fee we paid Capitol. We were to vastly exceed that, with $42 million in sales. One of the records that helped to get us there was a reissue of soul singer Betty Wright’s 1978 live album. Wright was only seventeen when she recorded her best-known hit, 1971’s “Clean Up Woman.” Betty Wright Live was so well considered by her fans that it sold over 300,000 copies for us.
Another successful release in 1991 came from an uncommon source, the artist himself. Johnny Rivers had a slew of hits, including “Memphis,” “Secret Agent Man,” and “The Poor Side of Town.” He lobbied Richard for a more extensive collection of his work than what was available from Capitol Records. (Most of his hits had been on Imperial, which Capitol owned.) We had our reservations because we didn’t see how our double album anthology could compete effectively with Capitol’s album. Theirs was available at a midline price (a tier below front line product); ours would cost twice as much. Johnny assured us that it would do well despite the price difference. Because we were distributed by Capitol, and because of Johnny’s support, Capitol licensed us the tracks we needed. Johnny was right. The Johnny Rivers Anthology 1964-1977 sold 155,000 for Rhino.
A stigma we faced was employees who wanted more action, who craved the excitement of working a contemporary artist, rather than being satisfied by Rhino’s commitment to preserving and presenting the great music of the past. Cahill excelled at Rhino and was now socialized enough to attract an offer from SBK Records at two and a half times his Rhino salary—even though it was more expensive to live in Manhattan. As a company, we lost something when Cahill departed.
Even more of a disappointment was Toby Mamis. I met him in October 1972 when he was the publicist for the Hollies, whom I interviewed for a feature in Rolling Stone. We hit it off immediately. As I got to know Toby, I thought he was the smartest person I had met in the music business. Toby worked for us for four months as a full-time consultant, but his heart wasn’t in it. Despite our friendship, his work was uninspired. He left to take a position in management working for Shep Gordon, whose main client was Alice Cooper. Toby was given an opportunity to sign acts to manage and commission. He had a long run in Shep’s employ, but never found a hit act to manage. Had Bob and a motivated Toby both stayed at Rhino, presumably the company would have benefitted, as well as their careers and bank accounts. For Richard, Gary, Brian, Garson, myself, and others, we felt as though we were on a mission. Other employees didn’t feel the same way and had no qualms about taking jobs with larger companies. Despite the fine work we were doing, and our impressive increases in sales, many thought of us as belonging to the minor leagues.
In the spring of 1991, with a year remaining on our contract, we weren’t feeling appreciated by our distributor. Around the time we made our deal with Capitol in 1985, they had signed Heart, a rock band from Seattle fronted by a pair of beautiful sisters. Heart had been very successful, but their sales had declined by the time they signed with Capitol. The company did a great job, not only reviving them, but also selling more albums than they had previously. With their albums averaging three million each, Capitol made a lot of money from the act. Typically a label in that situation would be responsive to a big moneymaker like Heart. Capitol’s profits from Rhino’s sales were comparable—over six million in 1991. (The money Capitol made from Rhino was all without risk. For a new artist, Capitol furnished recording costs, an advance of royalties that might not be earned back, tour support, and costly allocations for marketing and radio promotion.)
By comparison, we felt slighted. Capitol’s radio department failed to promote the two projects we gave them, breaching that provision in the agreement. We were supposed to have been able to reissue a small number of Capitol’s artists. These were not big selling ones, like the Beach Boys—but the Classics IV, the Raspberries, Canned Heat, and others. Capitol knowingly breached this provision, so they could reissue them on their own label. We hadn’t known it at the time, but Smith and Fifield had their eyes on bigger game. With a mandate to increase market share, within the year Capitol/EMI bought Virgin Records for $957 million and the other half of Chrysalis Records they didn’t already own. Smith didn’t give Rhino much consideration. Nobody thought we would leave.
Had Capitol treated us right, we could have easily re-signed with them. We also felt that given the inconsistencies in their sales department, we could improve our distribution with another company. We had a few meetings with other labels, but there wasn’t much enthusiasm. Randy Friedman set up a lunch for us with Mo Ostin. Mo seemed more interested in asking us about Joe Smith than in learning about Rhino. Richard and I met with a couple of execs from PolyGram. Zach Horowitz was now at MCA Universal, and we met with him and Irving Azoff. The entrance to the wing housing Azoff’s office was like entering a bank vault. Of anybody we met, Azoff was the most interested, but MCA had less stature than Capitol. A couple of months later, Azoff was gone. We took a follow-up meeting with his replacement, Al Teller, who opened the meeting with, “So, why are you here?”
John Branca pitched Rhino to Bob Morgado, the Chairman of the Warner Music Group, but he wasn’t interested. A few months later, Alan Lenard met with Morgado regarding Warner’s interest in buying his client Fantasy Records (whose best-selling artist had been Creedence Clearwater Revival). Morgado asked him that if Warner bought it, what would they do with it, who would they get to run it? Alan knew of our situation and suggested that Morgado could make a deal with Rhino, and then we could manage the Fantasy catalogue. Morgado sent Paul Vidich, his VP of mergers and acquisitions, to meet with Richard and me in July 1991. Branca and his associate, Gary Stiffelman—and much later, Lenard, insinuating himself into the deal—commenced negotiations. (Warner never bought Fantasy.)
The Warner Music Group’s policy was that any new company had to come in through one of the original three labels: Warner, Elektra, or Atlantic. As we were based on the West Coast, it made sense for us to come in through Warner Brothers, which was headquartered in Burbank. But Morgado and Ostin were having a minor feud. Morgado looked to Rhino to bolster a floundering Atlantic Records, benefitting label head Doug Morris, with whom he had a good relationship. It wasn’t as if Doug was a Rhino fan. He was reluctant and only agreed to the deal when Morgado assured him that the Warner Music Group would absorb any losses from the joint venture. Warner Music Group CFO Jerry Gold put it this way: “It was odd that we had to shove it down Doug’s throat.”
We weren’t used to such extensive and detailed negotiations. It seemed like everything was a big deal. As the owners of our company, Richard and I could do whatever we both agreed upon: we had our own video division, we had produced a TV pilot (for NBC), we published books, we wanted to produce movies, we had an idea for a Rhino-themed restaurant, and we had recently bought back into the Rhino store. In our negotiations, all of these areas had to be discussed, and by a group of lawyers whose specialty was the record business.
We wanted to exclude the Rhino store, but they wanted it part of the joint venture, even though they had no understanding of retail. It was a poor move on their part as they had to absorb significant losses from the store years later. They were also proving difficult with respect to Rhino Films. We would have preferred that it would have been part of the joint venture, but as feature film production was very risky, I couldn’t blame them for excluding it. They were fine with Richard and me having those interests in a separate company, but then they balked because of a prior agreement Warner Brothers Pictures had with two Japanese conglomerates, Itochu and Toshiba. If Richard and I, employees of a Time Warner joint-venture company, had a blockbuster hit independently of Warner Brothers, then those companies wouldn’t have benefitted from the small percentages they owned.
The negotiations got me so frustrated that during a break I called Zach from the Warner conference room to see if I could rekindle MCA’s interest. I thought we should be with a West Coast label—MCA was in Universal City—and with people we knew, like Zach. Zach has many fine qualities, but he is not an entrepreneur or a visionary, so what he suggested was not enough to make me want to abandon our current discussions.
It was imperative that the negotiations include a number of titles from Atlantic’s catalogue. Atlantic used that to leverage a 50 percent ownership in Rhino, in addition to a minimal amount of cash, to create a joint venture, as the new Rhino company was referred to. As a result, the catalogues of many of the stellar artists that Atlantic was known for were now under Rhino’s management: artists like Aretha Franklin, Otis Redding, the Rascals, the Coasters, and Iron Butterfly. Atlantic did not hand over their better-selling catalogue artists, like Led Zeppelin and Crosby, Stills and Nash. We thought Bobby Darin should have been included on our list, but Atlantic withheld him as a feature film was being contemplated and they didn’t want to share the revenue with Rhino. The film, Beyond the Sea, wasn’t released until 2004. Richard had our finance department work up some numbers from ones Atlantic had supplied and estimated that those masters were bringing in a profit of $4 million a year to Atlantic, with a shrinking revenue stream.
Henry Droz, the president of WEA, hosted a dinner in the WEA conference room in Burbank. WEA’s senior execs welcomed a handful of our senior staff. It was catered by Val’s, an upscale restaurant, and was the best meal I ever had. It was a warm and classy welcome, beyond any gesture we had received from Capitol.
In 1956 Dickie Goodman and Bill Buchanan introduced a form of novelty record called break-in with their hit “The Flying Saucer.” It consisted of a comedic narrative, such as a radio newsman reporting on an invasion from outer space with snippets of recent hit records punctuating the story. Inspired by that form, Richard concocted our advance release cassettes—circulated to salesmen so they could become familiar with the next month’s releases—to incorporate stories rather than merely a series of songs on a tape. They were quite imaginative.
For our final tape for our September 1991 releases, I came up with an idea based on an obscure doo-wop record we now owned as part of our Roulette Records purchase. Prior to becoming a record executive, Joe Smith was a popular DJ in Boston. Hoping to get a hit, the Valentines vocal group recorded a song about him, “Joe Smith.” Our storyline consisted of Joe (voiced by ex-Conception Corporation member Ira Miller) calling Richard to tell him about a great record he wanted Rhino to put out, only to be interrupted by Richard telling Joe about our new releases and playing segments. After a few phone calls, Richard is ready to listen, at which point Joe plays “Joe Smith.” I thought it was well executed, but we got little feedback from the CEMA salesmen. The only response I got from Joe was when he asked me who impersonated him.
Joe, who never had much time for us, who never invited us to lunch or to sit with him courtside at a Lakers game, who would have swatted us off his shoulder like a bothersome gnat if others were not watching, in early September drove the fourteen miles to Rhino—the only time he had visited us—to attempt to charm us. Unbeknownst to Joe, we had already signed our deal with Atlantic. We reiterated our reasons for leaving. His gesture was too little, too late. Unfortunately, we never had the opportunity to work with Joe when he was at the height of his game, at Warner Brothers.