January 19, 1996-From the Los Angeles Times:
"MCA Offers $200 Million to Acquire a 50% Stake in Interscope Records," by Chuck Philips
MCA Inc. entered into high-level talks Thursday to purchase a 50% stake in Interscope Records, the controversial Westwood-based label that Time Warner Inc. dumped four months ago following a national controversy over rap music lyrics.
Although no contract has been signed and several elements of the deal are still to be resolved, key sources predicted that an agreement will be consummated before Monday.
Risking a storm of controversy, MCA has offered Interscope about $200 million to purchase a half-stake of the label, with an option to acquire the remainder after five years, sources said.
MCA apparently is willing to risk the criticism because adding Interscope would bolster MCA’s penetration in the all-important rock market, as well as move the firm from the sixth-largest to No. 4 in the domestic music industry. Interscope is widely regarded as the top new firm in the business, consistently breaking new acts in the rock, rap and rhythm and blues genres.
Since its acquisition by Seagram Co. in June, Universal City-based MCA has moved aggressively to capitalize on the chaos at Warner Music Group, courting five ousted Warner executives and now Interscope.
Interscope triggered a political uproar last year after critics accused the Time Warner-affiliated company of profiting from offensive pop albums. Interscope distributes explicit rap and rock music on the cutting-edge Death Row and Nothing/TVT labels, whose rosters include Dr. Dre and Nine Inch Nails.
C. DeLores Tucker, chair of the National Political Congress of Black Women, who launched last year’s anti-rap campaign, said she has already sent letters to Time Warner’s competitors--including MCA--warning them to stay clear of Interscope.
“Whoever picks up Interscope is going to be our next target,” Tucker said Thursday. “As long as Interscope continues to sell porno gangsta rap to our children, we’re going after them."
Representatives for MCA declined to comment Thursday.
Under the MCA proposal, Interscope would retain complete creative control over the label’s recordings. But sources said that MCA, unlike Time Warner, would not be required to distribute products that it deemed “too controversial.” An oral agreement has been reached that would allow Interscope to distribute potentially offensive material elsewhere, sources said.
Industry analysts doubt that Tucker or other rap critics will have much luck attacking MCA, because, unlike Time Warner, it is owned by Seagram, a Canadian-based liquor company. Some executives question the effectiveness of Tucker’s crusade as streams of potentially offensive rock and rap albums continue to be released on labels owned by Time Warner and other record companies.
Although Interscope has often been painted in the news media as a “gangsta rap” company because of its association with Dr. Dre and Snoop Doggy Dogg, the bulk of its artist roster consists of top-selling rock acts such as Bush, Primus, Deep Blue Something and the Toadies.
Pushing the boundaries of mainstream pop by transforming underground acts into MTV stars, Interscope has sold more than $380 million in albums in the United States in the last three years--cornering more than 2% of the total U.S market.
Founded five years ago by record producer Jimmy Iovine and media entrepreneur Ted Field, Interscope is widely regarded as the most successful new label to arrive on the scene since Geffen Records in the early ‘80s. Geffen, which releases music by such acts as Nirvana, Hole and Guns N’ Roses, is already owned by MCA. With Interscope, MCA would immediately bolster its credibility as a leading force in the crucial rock market.
The Interscope deal marks the first big move by new MCA Music Entertainment Chairman Doug Morris, who flew into town Monday to convince Interscope to join MCA instead of Thorn-EMI and PolyGram, both of which made competing bids.
Some of the key details of the deal were hammered out Thursday by Morris and Seagram Chairman Edgar Bronfman Jr. as they flew back to New York on the corporate jet.
Sources said MCA’s offer includes an option to buy the remaining half of Interscope in 2001. The value of the remaining 50% will be determined by a formula that takes into account the firm’s performance over the next five years; it is likely to exceed $100 million.
MCA’s New Tune
MCA executives, in a move that would transform the Seagram entertainment conglomerate into a rock powerhouse, said Thursday that they want to buy a 50% interest in controversial Interscope Records. The move is yet another example of an effort by MCA to capitalize on the chaos at Warner Music, which dumped Westwood-based Interscope four months ago after complaints about the explicit lyrics of its rap and rock music. MCA has also courted five ousted Warner executives and hired its former music group executive, Doug Morris.
MCA
Although MCA has the nation’s strongest country music division, it never got a foothold in the crucial rock market, and its once-booming black music division has sagged. By adding Interscope’s roster of alternative groups to those it has at its Geffen Records division, MCA hopes to be an immediate player in rock.
INTERSCOPE
Interscope has become one of the most successful start-up record companies ever. Although its roster is the envy of the record business, it has elicited sharp criticism from some--most notably GOP presidential front-runner Bob Dole (R-Kan.)--who say some of its groups’ lyrics are offensive.
PROJECTED MARKET SHARE
Market share projected for the spring, when Warner stops distributing Interscope Records and if MCA acquires Interscope.
Warner Music (without Interscope): 20%
Sony: 14%
PolyGram: 13%
UNI (MCA) (including Interscope): 12%
BMG: 11%
CEMA: 10%
Other: 20%
February 10, 1996-Theron is approached to star alongside Keanu Reeves and Al Pacino in Taylor Hackford's film, The Devil's Advocate. Cobain and the members of Nirvana are also approached to consider collaborating with James Newton Howard on the soundtrack. Nirvana is also approached to consider collaborating with The Fountains Of Wayne as they work on the soundtrack to Tom Hanks' directorial debut, That Thing You Do!, in which Theron has a small role alongside the likes of Steven Tyler's daughter Liv.
February 15, 1996-Eric Erlandson is reported to have engaged in a knockdown dragout fight with Love over her infidelities. He reportedly shouts "You made me a liar, Courtney! I stood up for you, said that there was no way that you'd even sleep with Trent, and you didn't stop me! How could you fucking do this to us?!" Regardless of the reports, Erlandson is still officially the lead guitarist of Hole, and Love still the lead vocalist.
February 20, 1996-Billy Corgan of The Smashing Pumpkins is interviewed concerning his past with Love and what he thinks of what has occurred with Cobain. "Well, Kurt still can't stand me, and I doubt that's going to change. We're both very much competitive. That's why I did a double album, after all. I do think that Courtney is really talented, and that she's quite lovely when she wants to be. I did consider wanting to write with her and see what we could come up with, but I doubt that's going to happen."
February 24, 1996-Nirvana turns down the offer work on The Devil's Advocate, so Alice in Chains accepts in their place. However, the rumors of Cobain and Theron's romance continue to bloom when she heads to Gainesville, Florida for research for her character, Mary Ann Lomax, and Cobain, with Frances and Patrick in tow, accompanies Theron and Keanu Reeves for a few days.
March 1, 1996-Revitalized by his trip to Gainesville, Cobain settles into Michael Stipe's home in Athens, Georgia to begin writing for their planned acoustic album. The two consider doing reworking a known Nirvana song and a known REM song with new arrangements as either B-sides or bonus tracks. However, Cobain has to work out paperwork with Geffen Records over proprietary matters.