1. There are significant historical precedents for occupying grounds by way of protest, particularly by consensus-mediated, populist movements.  The Bonus Expeditionary Force encamped for a period post-WWI in Washington, D.C.  Several decades later the Poor People’s Campaign encamped in Resurrection City on the Capitol Mall; I vividly remember visiting Washington in 1968 and witnessing this first-hand.  In 1969 the Indians of All Tribes movement occupied Alcatraz Island, and Berkeley students/hangers-on/homeless occupied People’s Park.  I vividly recall both incidents, seeing as how I was a student at Berkeley at the time.  Egyptians now occupy Tahrir Square.  When a labor union goes on strike it in effect establishes a cordon around a territory, thereby occupying it.  In the news recently, a woman was so defensive of her occupied space at a Wal-Mart store that she pepper-sprayed rivals for it, all the better to acquire desirable bargains when the store opened on so-called “Black Friday.”

That being so, the occupy movement fundamentally is unlike its counterpart, the “tea party” movement, which is ideological, not territorial.  Concededly, participants in the original Boston Tea Party temporarily occupied a ship with tea on it.  Rather than off-loading it from the ship, the better to enjoy its delicious flavor, they (apocryphally) pried opened the boxes containing it with hatchets and poured it into the Boston harbor.  This is a minor caveat; persons who now identify with the tea party movement can carry on their activities anywhere they happen to be situated, and are not confined to a specific geographical location.

2. As Robert Ardrey wrote in his now ancient 1966 book The Territorial Imperative, an intrinsic feature of human nature is attachment to a certain territory, preferably on an exclusive basis.  Territorial disputes have defined human existence since the dawn of civilization.  Often these disputes are rooted in competition for scarce economic resources.  Parties frequently cite historical precedents, such as “we were here before you were.”  Sometimes (maybe often, perhaps always) they simply are the product of naked aggression, such as “we want what you have.”  The archaic Israelites were told by their God that it was their destiny to destroy Jericho and occupy Canaan.  Early in its history, the U.S. established the “Monroe Doctrine,” proclaiming much of North America as falling within its “sphere of influence,” thereby occupying it.  Germany occupied territories during WWII, such as Vichy France, with disastrous outcomes.  Germany’s pretense was that certain territories belonged to it historically; it was part of their lebensraum.  Ordinary persons living within their curtilage, however, were unable to exercise previously enjoyed rights, and frequently were deported to concentration camps, thereby losing all of them (and perishing in the process).  By contrast, the occupiers (the Germans) could (and did) do whatever they desired in the occupied land.

The only concept of ownership, which has endured throughout history, is “you own something if you can defend it.”  Legitimating ownership by virtue of “being there first” doesn’t guarantee a territorial claim, unless one can protect it in the present as belonging to one’s tribe.  Means of protection include diplomacy, economics, religion, and all of the other forms of cultural persuasion that have evolved over time.  Clausewitz stated, “war is the continuation of policy by other means.”  Hence the disruptive, physical confrontations between occupiers and the state, broadly defined.  These conflicts are inexorable, here and everywhere.

At a deeper level, occupying space is a consequence of being a person.  The human body takes up space.  It projects itself into space (and vacates it) as it moves about.  Its artifacts (dwellings, tools, objects, works of art) all require space within which to situate themselves.  Space, and ecological forces acting within it, in turn defines the outer parameters of the human body and the limits within which it is constrained.  Gravity, tidal motion, barometric pressure all transmit through space.  The universe is expanding into space.  The Afro-cosmologist Sun Ra sang, “Space Is the Place.”  In this sense, persons associated with the occupy movement simply want to transfer the quadrant of space they already occupy, into another adjacent zone of space.  Once a person is dispossessed from a space – this might happen to an occupier as a consequence, say, of getting arrested – then it once again is vacant.

3. This tension between spatiality and ideology perfuse the occupy movement.  Taking over a public park is not likely to effect significant social change, and just creates a nuisance.  Similarly, occupying a university lecture hall makes no sense; as the Berkeley philosopher John Searle has observed, it is a peculiarly nihilistic demonstration that protests an economic good (that is, an education) for which one already has paid (via tuition).  Occupiers are inherently disruptive towards productive enterprise as it traditionally takes place in their zone of occupation.  A strong argument can be made that, regardless of ideology, these types of occupations are self-defeating and contra to the movement’s stated objectives to improve the lot of the disfavored 99%.  The occupiers are “thinking locally and acting locally,” as opposed to Bill Clinton’s admonition to “think globally and act locally.”

It would make far more sense to occupy the lobby of a bank, a courtroom, a legislative session, or other space of cultural productivity, which creates more of a polemical statement directly related to the movement’s ostensible purposes.  Or, at Berkeley, students might protest prospective tuition increases and the way in which the U.C. admissions process now has become incentivised to accept out-of-state students, who pay higher tuition.  On margin, these entrepreneurial rents are mainlined straight into the U.C. system’s budget, rather than being diffused through an increasingly convoluted state allocation process.

4. Another unfortunate consequence of this confusion is that the energy and efforts of the occupy movement are amorphous.  The protest movements of the late-1960s and the early 1970s coalesced around the draft and the insidious, intimidating nature of the military-industrial complex.  In contrast, this new generation of protestors can’t even decide exactly what it is they’re protesting about.  There is no spokesperson; there is no consensus as to what causes are espoused; there isn’t even agreement on what happens next.  This is not mere happenstance.  Rather, it’s a fundamental consequence of the decidedly agrarian, barter-oriented, hunter-gatherer, subsistence-based organization of the movement itself.  The Los Angeles city government even attempted to co-opt the Occupy LA movement by trading its present encampment for a plot of farmland, far away from any center of urban activity.

It per se is impossible for an autochthonic spokesperson to emerge in such a milieu; one might say, each participant occupies his or her own respective space, which typically is a flat, horizontal piece of ground.  Unlike industries with organizational structures, there are no hierarchies, vertical architectures, superstructures or infrastructures.  While this might be conceptually apropos, particularly for a fundamentally anarchist agenda, it fatally handicaps the movement from achieving any sort of critical mass towards a real-world objective.  To the extent one is articulated, it is practically unrealizable, either because it is poorly defined or impossible to achieve.  For example, “free all political prisoners” is devoid of any operational content.  Even if it could be assigned a functional meaning, there is no scenario under which it is likely to occur.  This incoherence facilitates turning the movement into a gigantic party, with all sorts of homeless people, protest tourism, hangers-on, etc. who are there simply for the spectacle, without endorsing any genuine grievances.  This is a fundamental difference between 1960s protesters versus the occupy movement; they are so different they probably wouldn’t even be recognizable to each other.

5. As a student at Berkeley during the late 1960s – early 1970s, I believe I have standing to say that the current round of Berkeley protests particularly are disturbing.  I still remember the sweet smell of tear gas wafting over the campus.  Berkeley has a long and honorable history of social protest, going as far back as the Free Speech Movement of the late 1960s.  As naïve as that was, at least it articulated an ethos, whereas now there is a dearth of critical thinking.  Freshly scrubbed students, who typically have lived sheltered lives surrounded by books, are surprised to see something vital and alive occurring right in front of them.  It is ready-made, off-the-shelf.  It facilitates social interaction, promotes a sense of in-group identification, attracts attention and differentiates the impressionable student from his or her previous family environment. They become mesmerized by these real-world enactments, featuring colorful metaphysicians such as Zachary Running Wolf.  It can’t be a coincidence that the occupy movement, at least on campuses, has coincided with their influx.  Protests like the occupy movement are fashionable and even sexy – unlike genuinely substantive legislative work, which is hard and thankless.

In the meanwhile, defenders of the status quo never have been better organized to confront protest.  Cross-jurisdictional agreements between the Berkeley campus police and neighboring police forces facilitate the arrival of law enforcement personnel, who are not adequately trained in the nuances and dynamics of dealing with protests and disturbances in an academic setting; witness the viral video of policemen beating demonstrators with clubs outside of Wheeler Hall.  And of course the shocking video of policemen casually dousing peaceful seated protesters with pepper spray from U.C. Davis.  I am reminded of the way the U.S. military now uses private contractors, not only for logistics and infrastructure, but also for security and actual fighting activity.  I also am reminded of the concept of “shock and awe,” popularized by our country’s on-going wars in the Middle East.  The theory being that with a huge (and sometimes secretly-arriving) police presence, one can overwhelmingly intimidate demonstrators before they have any kind of opportunity to organize a response, assuming they could do so, to begin with.  This presence also facilitates surveillance and sousveillance, both inimical to principled exercise by the citizenry of their legally sanctioned rights.

For these reasons, I am concerned that, despite its laudable concept, the occupy movement is destined to be short-lived and will amount only to an historical curiosity.  Or, perhaps, it is destined to be long-lived; as ineffective ideas never seem to go away.

The show was “good enough.”  Their stage set was hokey with a big Buffalo Springfield logo hoisted over the backdrop, together with large cut-outs of the eponymous tractors that gave the band its name.  It also was cluttered with pointless artifacts, e.g. a cigar store wooden Indian.  It definitely was not like Lady GaGa’s recent HBO special.

The rhythm section was pedestrian with some session musician dutifully whacking his drums and a bass player thumping out root and fundamental notes.  Neither were particularly dextrous and they were mixed way too loud.  Bass in particular can sound loose and flabby if it is not compressed between the guitar and the amp.  It overwhelmed the rest of the band and the low end of the mix pretty much was undifferentiated noise.  It literally was unendurable on some of the louder numbers, which dissolved into a sea of sonic sludge.  I’m surprised the band could put up with it on stage.

The big drawing card of course was the interplay between Steven Stills, Richie Furay and Neil Young.  Messrs. Furay and Young were fully engaged.  Stills on the other hand was strangely distant and detached from the other two.  At many points during the show he did not appear to be playing his instrument.  He stood apart from the other band members.  Once he tripped over a front stage monitor.  His vocals on his songs, e.g. “For What It’s Worth,” were ragged, and once he forgot the words.

While it is a specialized point, I also must note my disapproval of his choice of guitars.  He played, variously, a Stratocaster; a Flying V; and a White Falcon.  The first two were inappropriate.  The thin, single-coil output of the Strat particularly was obnoxious and did not blend well with the other instruments.  It even looks funny in the context of the other players.  Guitarists in bands like the Buffalo Springfield should play electric archtop guitars made by Gibson, Gretsch, Guild; or, for acoustic numbers, Martin.  They’re the only ones that work with the material; please save the Strat for Hendrix.

Even when playing a White Falcon, the guitar with which he most is associated, Stills looked uncomfortable.  He continuously was fiddling with the controls in a manner that suggested he did not know which pickup to use.  The ones he ended up selecting were too dark, relegating the legendary White Falcon, with its wonderful Filtertrons, to the low- frequency muddle of the house mix.  The notes he ended up playing were slow and uninspired, showing no particular dexterity.

Young, on the other hand, was the band’s driver.  His playing was first-rate.  Amazing to report, his singing was well intonated.  Furay’s performance too was excellent (although on some of the louder numbers there was no point in him continuing to strum his acoustic guitar).  He sings lead on several of the band’s best-known songs and his voice was wistful, achingly beautiful.  There were several transcendent moments when all three singers harmonized perfectly, the mix was in balance, the instruments well-blended.  These were the highlights of the performance.

It’s hard to discern exactly why the band reunited for this tour.  Stills and Young are rich as Croesus and do not need the money.  Furay’s circumstances most likely are less optimal, and on margin he probably will be the most-benefitted member of the group.  Although bands like Buffalo Springfield have a catalog of well-recognized songs, their royalties from selling records (downloads) probably are miniscule and bogged down with commissions payable to former managers, recoupment issues and other financial commitments.  Publishing should be more lucrative, but even then it depends on the extent of radio (internet) airplay, record (download) sales (which, as noted, are miniscule) and use in television or movies.  In this latter category, I cannot recall any recent featured uses of Buffalo Springfield songs.

It’s also probable that Young simply felt like reuniting the band and playing again; he was the instigator of the band’s recent comprehensive box set, and this is a fitting coda to that initiative.

In conclusion, we have been privileged to see recent reunions of the Doors (most of them, except for Krieger); Love (when Arthur Lee still was alive); and now, Buffalo Springfield.  The only band left of consequence would be the Byrds.  McGuinn, Hillman and Crosby still are alive, and it would be wonderful if they could find a way to bury the hatchet for a few shows.  Given their still-gurgling-right-below-the-surface animosity, though, this seems unlikely!

First, the movie is mis-titled. One of Herzog’s main points is the continuity of existence and dream-like memories that persist over time. The inhabitants of the valley where the cave was found, Herzog argues, are not that much different from you and I. In particular, they share a need to express themselves, to think symbolically, and (in the case of certain talented individuals) to act creatively. This is a universal theme – one of identity, not difference, to borrow a phrase from Heidegger. The dreams have not been forgotten, rather, they have been remembered. The movie should be called “Cave of Remembered Dreams,” or some such.

Second, the movie feels disjointed. It comprises segments of interviews with scientists; a history of Herzog’s expedition into the cave; pictures of the cave art; and a chilling allegory at the end of the movie about nuclear waste and albino crocodiles. Herzog jumbles these all up. It would have made for better continuity had he arranged them into discrete segments. The best pictures of the cave art come at the end. These should have come at the beginning, possibly with a coda or a reprise. This would tend to draw one in more to the underlying theme of the film, and expose the amazing art for what it is, thereby attracting the viewer’s attention. As it is, one is introduced to the cave art in a haphazard fashion, using jerky camera technique, which Herzog even admits was filmed using amateur equipment and is deficient. I am not objecting to the interviews with the scientists and other personnel charged with safeguarding the cave, or demonstrating various techniques such as primitive spear throwing and how to play musical instruments made out of bones. They comprise an important part of the overall story. It’s just that it would have been better to assemble these into separate informational segments, somewhere in the middle of the film.

Third, the 3D effect is dispensable, except towards the end of the film when Herzog finally focuses on the paintings themselves, and the stalactites and stalagmites surrounding them. Then, they blend and meld astonishingly into the rocky contours of the interior of the cave. Before then, all you really see are talking heads in the foreground with dusty cave walls in the background, which made me dizzy. Herzog also could have made better use of 3D. For example, I expected some kind of effect where the paintings lift off the walls of the cave and literally become alive, or somehow become animated. Given the current state of 3D technology, this would not have been hard to achieve.

Finally, a word about caves and the astonishing art this one contains. There is something interesting about humanity’s relationship with caves. Pharaohs were buried in caves (albeit man-made ones) in the Valley of the Kings in Egypt. The Dead Sea Scrolls were discovered in caves around Qumran in Palestine. Caves are enclosures, places of isolation and containment. It is surprising that, given his philosophical musings, Herzog did not mention this primordial, archetypal (ala Jung) aspect.

Aside from its great antiquity, one of the most interesting aspects of the art is how contemporary it is. Art from ancient peoples sometimes is criticized for its lack of perspective and dimensionality, or at least it is juxtaposed against Renaissance-era art that employs perspective and dimensionality with greater facility. It is “flat” and opaque. It is alleged that, because of this, it does not draw one into the work. The work is an object to be regarded, most likely at a distance; it does not absorb one, or in effect become an extension of the viewer. Commentators sometimes observe that “primitive” people were incapable of thinking in terms of spatial metaphors.

This simply isn’t so. The Chauvet paintings reach across the years and are compelling. Even without the contours of the cave walls, they are layered and show differential-phase movement, in the manner of an impressionist painting. Herzog briefly makes the connection between this attribute and more modern painters, such as Picasso, but could have dwelt on it further.

The highlights of NARM are large-group meetings, where all of the attendees get together in a large auditorium to watch presentations from the record labels. These presentations are elaborate, frequently involving not only montages of music videos but also artist performances. Labels try to one-up each other by staging the most elaborate spectacles – the better, I suppose, to cultivate impressions in the fragile minds of the wholesalers and retailers.

Needless to say, this whole concept is absurd. I used to go to NARM conventions consistently throughout the mid 1980s to the late 1990s. They were an expensive waste of time. Record labels spent hundreds of thousands of dollars preparing videos to show to the retailers, bringing in bands, hosting parties, hiring hookers, etc. There are a dozen other variables that affect the amount of records sold, which retailers have nothing to do with. These include radio airplay; the record company’s marketing, promotional and advertising commitment; and other silly factors such as whether people actually like the record. Few things are more ludicrous than a thousand grown men and women sitting in an auditorium watching music videos and artist performances presented by record companies.

In fairness, record labels used NARM to focus activity on their own operations. For example, there typically were small group meetings between key retailers and record company sales executives. And, it was an excuse for them to bring their key sales executives in from the field for group meetings. Both of these activities yielded some economic utility. Other than this, NARM simply was a giant boondoggle.

To counteract the problem, I developed what I now think of as my “NARM meeting strategy.” It goes something like this. You show up at one of the large group meetings. You walk around the room, greeting everyone you see – all of your colleagues and acquaintances, who have shown up for the presentations. After you work the room, then you leave. If somebody later asks you where you were, you simply tell them you were on the other side of the room. And if somebody on that other side of the room asks you where you were, you simply relate the inversion of the same story. There are enough people, and there is enough confusion, that you remain perfectly credible. There’s absolutely no point in hanging around, because you’d get bored to death. This frees you up to do something more worthwhile, like staring at the wall. I since have been able to expand this strategy to all kinds of group meetings and conventions in other contexts. Try it, it works!

February 17, 1981 – Chronological Listing of Claims

February 19, 1981 – List of Claims, Promotion Issues

February 24, 1981 – Apple Claim for Rate Differential

February 27, 1981 – Apple Claim for Scrapped Inventory

February 27, 1981 – Beatles and Apple Road Map

April 1, 1981 – Beatle Product Label and Series Numbers

April 1, 1981 – History of Publisher Licenses Computations

April 9, 1981 – Apple Audit Claim for AFM Fees

April 16, 1981 – Apple Audit Claim for Excess Package Deduction

May 12, 1981 – Default Penalty against Apple

May 12, 1981 – Sometime in New York City

CEMA P&D deal format late 1980s

Bust It Records – Joint Venture Agreement with Capitol

Capitol Artist Agreement – basic contract

Capitol Production Agreement – basic contract

Record company P&L

Rhino Records materials

Kenny Rogers contract

Neil Diamond contract

These are, of course, my personal reflections. As set forth in various books and articles about their history, the activities and operations of publicly-traded record companies, such as EMI Music, are a matter of public interest – not only to the artists under contract to those companies, the people employed by them, and the consumers who buy their records – but also to their shareholders. That being so, the matters set forth herein are my personal opinion and interpretation of the facts on the ground.

A. Screen Entertainment Ltd.

When I joined Capitol, EMI Music just had been taken over by Thorn Electrical Industries in December 1979 for a reported £165 million. Richard Cave was Thorn-EMI’s chairman, having been inherited from Thorn. In the 1960s and 1970s EMI had accumulated a number of diverse unrelated companies. In retrospect this model of business organization is dubious, because it traps shareholder value. The laggards drag down the prospects of the leaders. Nonetheless, at the time, this strategy was in vogue, and in fairness to EMI had been adopted by many other companies with entertainment divisions, such as Gulf & Western, which owned Paramount Pictures. For a recent economic analysis of this issue, see this article.

Justifying its merger with Thorn, EMI stated: “The main aims for the business areas in which the Company is involved are: to play a leading role in meeting the requirements of the widening and expanding home entertainment industry; to have a strong engineering group with interests in high technology, electronics, defence and other special areas of interest; to support our established mature businesses and to increase our influence in international markets.” Thorn and EMI later demerged in August 1996. The tortuous explanations for why that supposedly made sense, particularly in light of the rosy statements about the desirability of the original merger, are set forth in Brian Southall’s book, The Rise & Fall of EMI Records (2009, Omnibus Press).

In its conglomeratized state, Thorn-EMI copiously acquired and divested itself of dozens of firms. One of its assets was Screen Entertainment Ltd., a major UK movie producer and film studio. It owned, among other properties, the famous Elstree film production facility, a cinema chain, and a library of approximately 2,000 titles. I had a background in independent film, and also was working with a Capitol-EMI subsidiary called Picture Music International, a producer of music videos, which just then were starting to emerge. Taking a straightforward approach, I introduced myself to various persons of interest at Screen Entertainment, and gradually insinuated myself at its corporate level. I already was spending some time in London at EMI Record’s office at Manchester Square and at EMI Music’s office at Gloucester Place, so it was a simple matter to get up to Hertfordshire, which is where Elstree was located. I got busy trying to discern, for example, if there were any “synergies” between Screen Entertainment and EMI Music.

I was surprised when Thorn-EMI’s senior management decided that film was not one of its core businesses. Typically, Thorn-EMI was in serious financial trouble at the time. In 1985, its stock price had declined by 44% over the previous 18 months. According to one analyst, its stock was trading at a “diversification discount” – a value less than that of the individual companies comprising it – of 68%. After shopping it around, in May 1986, Thorn-EMI sold Screen Entertainment to the Australian company Bond Corporation Holdings Ltd., owned by Alan Bond, for $190 million.

I thought the price was low, not only to book value, but also in relationship to the potential future value of the assets. As with CDs, which just then were starting to come on to the market, who knew what new technologies awaited film? I wrote an internal memorandum on the issue, arguing for an alternative valuation approach (it was roundly ignored). I stated that a portfolio of intellectual property assets was worth the present discount value (using a set of interest rate assumptions) of a projected revenue stream (taking into account possible future uses) potentially to be generated by their commercial exploitation over some period of time (say, 10 years). By no stretch of the imagination was this formulation novel, but it seemed so to the people on Thorn-EMI’s corporate staff with whom I dealt. The transfer of classic British assets out of the country provoked debate in the British Parliament; see this amusing exchange. The UK Monopolies and Mergers Commission permitted the deal to go, through, without protest.

I was astonished when, three days later, Bond sold Screen Entertainment to Cannon Group, Inc., for $266 million – a profit of $79 million, after owning it for less than a week. Cannon was owned by Menahem Golan and Yoram Globus. Others shared my amazement – not only on the Thorn-EMI corporate staff, but also by the entertainment industry, the financial media, and the world at large.

This is where Marriott comes in. I asked him what went wrong, and what had happened to my valuation analysis. He muttered something (in the way British people are liable to do in such instances) about different valuation philosophies, which I did not regard as a credible answer. The Screen Entertainment sale and its aftermath lead me to conclude EMI had no real corporate strategy. More seriously, it corrupted my view as to the competence (or lack thereof) of Thorn-EMI’s senior management and, by analogy, my perspective on the corporate world at large.

Update on some of the parties involved: Bond Holdings filed for bankruptcy in mid-1991. In May 1992 Alan Bond was convicted of securities fraud. In 1987, Pathé Communications, an Italian company owned by Giancarlo Parretti, acquired Cannon for assumption of a reported $250 million of indebtedness. Pathé also acquired MGM/UA in 1990 for a reported $1.36 billion. The French bank Crédit Lyonnais financed the acquisition. Pathé became insolvent and Crédit Lyonnais took control of it in April 1991. It invested approximately $2 billion in trying to keep Cannon/MGM/UA afloat. In May 1994 Crédit Lyonnais itself became insolvent after losing some $1.2 billion in 1993, and, amid allegations of fraud, was bailed out by the French government. In October 1996, Parretti was convicted of bank fraud. Golam and Globus went on to form various independent film production companies.

B. Rent-A-Center

A second debacle concerned Rent-A-Center, which was another company Thorn-EMI owned in the U.S. Thorn-EMI had acquired it in 1987 for a reported $594 million – an astonishing 42 times earnings. Rent-A-Center’s business was leasing appliances to persons with low incomes, who could not afford to buy them outright. This turns out to be a lucrative business, and Rent-A-Center quickly became a disproportionate contributor to Thorn-EMI’s pre-tax operating income (PTOI) and return on sales (ROS). In fact, its turnover, and profitability were several times that of EMI Music. Yet, surprisingly, only a few people in the company knew anything about it, particularly in the U.S., even though (arguably) Rent-A-Center pulled away funds Thorn-EMI otherwise might invest in its music division.

All of that changed as evidence of Rent-A-Center’s allegedly unscrupulous business practices gradually came to light. Being the closest person on point in the U.S., I led a (then-confidential) investigation into Rent-A-Center’s operations, together with various members of Thorn-EMI’s internal audit group. The problem continued to fester until it later became public; as summarized in a later expose, Rent-A-Center (allegedly) used high-pressure, predatory sales methods in dealing with its clientele, bordering on the coercive and abusive. One manager is quoted as stating that Rent-A-Center ultimately collected more than $5,000 on a VCR that retailed for $119. Employees encouraged unsophisticated customers to rent more goods than they could afford. When they fell behind in payments, Rent-A-Center repossessed the goods, then re-rented them. Another tactic some employees used was the “couch payment” – sexual favors exacted in lieu of cash.

Not surprisingly, nothing came of the earlier report I had made to Thorn-EMI. I asked Marriott what happened. As with Screen Entertainment, Marriott was unable to give me a credible answer. It wasn’t hard to figure out, though, that it had gotten swept under the proverbial rug, particularly in light of Rent-A-Center’s disproportionate contributions to Thorn-EMI’s turnover and profitability.

C. The Stresa Conference

In June 1988 I attended a management conference Marriott organized in Stresa, Italy, which overlooks Lake Maggiore. We stayed at the famous Hotel des Iles Borromées – the same one where Ernest Hemingway set part of his famous novel, “Farewell to Arms.”

It was a beautiful location and I spent more time lolling about than I probably should have. Marriott had devised a preposterous new-age exercise in corporate decision-making. We were instructed to anticipate a counterpart party’s responses to certain hypothetical deal scenarios, and devise appropriate measures. I naturally couldn’t resist using what had happened with the Bond sale as an example. By using simple principles from game theory, I was able to devise several alternative (and far more remunerative) outcomes. Marriott later came to call this the “Kronemyer strategy,” which caused me chagrin, as there was nothing particularly novel or unique about it. If you’re interested, here is a copy of an amusing piece Marriott wrote called the “EMI Business Affairs Mission Statement.”

EMI Music Business Affairs Mission Statement

D. 10% Royalties and Debit Balances

Many of Capitol’s early artist contracts were an embarrassment. Its 1943 agreement with Nat Cole, for example, called for a one-and-one-half cent royalty (specified in pennies, and not as a percentage). If you want to download it, here’s a copy of the Nat Cole agreement (which appears in various legal actions as a matter of public record):

Nat King Cole Contract – November 10, 1943

[In fairness to Capitol, this same situation also pertained at every other record company.]

Cole of course was one of Capitol’s most famous artists. If this is what it did to Cole, think for a moment of what it was doing to other artists of less renown. In the late 1980s and early 1990s I found myself regularly called upon to testify about various irregularities in Capitol’s royalties calculation practices and gaps in its contracts. There were a myriad number of ways in which the financial calculations called for by Capitol’s contracts disadvantaged its artists. Beyond that, they variously were characterized as unfair, unconscionable, unilateral and adhesive. Artists sought to have them declared void, or invalid, or to have them unilaterally amended by a judge. And, even though they purported to be exclusive, Capitol’s contracts did not appear to cover acetate recordings of live performances on radio, made during an odd lacuna of time in the mid-1940s when members of the American Federation of Musicians (“AFM”) were on strike. [Hard to believe, but this issue was not resolved from a legal standpoint until 2010 in a case involving Hank Williams].

The Cole situation was particularly vexing in that Capitol’s A&R department had the genuinely brilliant idea of creating a faux duet between Nat Cole and his daughter Natalie Cole, singing his signature song “Unforgettable.” Royalties to the Cole estate were an impediment to making this happen. I met with Maria Cole (together with Clark Duval, another Capitol-EMI executive) at the NARM convention in New Orleans, where we laid the groundwork for resolving this issue.

Trying to take a broader view of the situation, in mid-1992, I proposed Capitol unilaterally amend all of the artist contracts it had entered into before 1972, to provide for a minimum 10% royalty rate. I also proposed that all outstanding “debit balances” – the amount an artist’s account must recoup before royalties actually become payable – be forgiven. The reason why we selected 1972 is because that was the year the U.S. Copyright Law was amended to extend copyright protection to master sound recordings. Before then, only the musical composition embodied in the master sound recording could be copyrighted. In retrospect this doesn’t particularly make a lot of sense; there’s no reason why the applicable date couldn’t have been earlier, or later. The best way to think of it now is that the early 1970s were the birth of the modern era in the record business, when artists started to have better representation, and their contracts with record companies actually began to get negotiated, rather than simply propounded as a “take-it-or-leave-it” type of arrangement.

This was not a new idea. Atlantic Records and (surprisingly) MCA Records already had implemented similar reforms. The economic consequences to Capitol would be minimal, as only a handful of artists from that era still were popular and sold any records. Imagematically, though, it would demonstrate a spirit of corporate concern and altruism. Despite these arguments, Marriott opposed this initiative. EMI’s more-senior corporate management, however – all the way up to Jim Fifield, then Chairman of the company – were for it, so it was adopted. Sony later followed suit, although PolyGram, BMG and Warner Bros. declined to do so.

E. Rhino Records and other Aborted Acquisitions

Finally, there is a sad tale of corporate incompetence I must share involving Capitol-EMI’s mis-steps with Rhino Records, one of its distributed labels. In 1990 EMI and Rhino bought the Roulette Records catalog, owned by Morris Levy. Capitol-EMI acquired rights for the world ex-U.S.; Rhino acquired U.S. rights. I worked on the U.S. aspects of this transaction with Marriott. I urged him in the strongest possible terms to negotiate for worldwide rights; there was no need to include Rhino in the transaction.

Roulette had a practice of not paying royalties to its artists. Apocryphally, Levy pulled out a gun when Tommy James of the Shondells fame inquired as to the whereabouts of his modest 5% royalty. “I’m concerned about this type of liability,” Marriott told me. “Don’t worry about it,” I said. “Any claims will be minor; we can settle them easily; and take a reserve for them in any event.” “I just won’t do it,” Marriott replied. Shortly after the transaction closed, Marriott approached me, somewhat ruefully. “Can we change things around and get world-wide rights back from Rhino?” he asked. I dutifully presented this request to Richard Foos and Harold Bronson, Rhino’s owners. We all doubled over in spasms of laughter.

I later attempted to acquire Rhino Records on behalf of Capitol-EMI; see this post. I tried to acquire Motown Records from Berry Gordy in 1985, and had the opportunity to do so for $35 million (it later was acquired in July 1988 by the investment banking firm Boston Ventures for a reported $61 million; Boston Ventures sold it to Polygram in August 1993 for a reported $325 million, resulting in notional profit of $264 million.) I tried to acquire the independent label Fantasy Records from Saul Zaentz in 1986, and had the opportunity to do so for $50 million; it later was acquired in 2004 by its present owner, Concord Records, for a reported price in excess of $100 million.

It was while working on the Rhino deal that Marriott definitively revealed his corporate philosophy to me. We were walking around Cologne, Germany, one evening. He said, and I’ll never forget it, that the best thing to do is “absolutely nothing. The single greatest mistake one can make in a corporate environment is to think you were hired to take the initiative and actually do something, which is a false conceit. You might think you have ideas, but they’re idiosyncratic. If you follow your business instinct, it will only get you in trouble. If you make a decision, there is a significant chance it will be the wrong one, or will lose money, in which case you will get fired.” My philosophy being the exact opposite, I didn’t really have anything to say in reply.

Update: In May 1999 Marriott was fired from EMI Music and joined a private law firm. He later became chairman of the International Optical Disc Replicators Association, a trade group concerned with the licensure of patents for manufacturing and formatting of DVDs.

Dennis White had been Capitol’s head of sales since around 1975, reporting to Don Zimmermann. He became CEMA’s first president. Joe Smith became head of Capitol-EMI in August 1987. Here is a copy of the press release:

Dennis White Press Release

I guess Smith didn’t get along with White, because he fired him shortly thereafter. I thought White was a great, old-school record executive, and I was sorry to see him go. By the same token, I was a big fan of Smith, so I stayed as far away from the controversy as I could.

To replace White, Smith hired Bach. For a number of years Bach had been in the upper management hierarchy at WEA. He recently had lost out to Dave Mount in the succession battle to succeed Henry Droz. Smith knew Bach from his own former tenure at Elektra Records. I once asked Smith about his history with Bach, and he candidly told me he viewed him as a plausible alternative to White, mainly because he came from WEA. “If he’s from WEA, then he must be good.”

My policy always has been to try and make friends fast, so I made a point of hitting it off with Bach as soon as he arrived. Bach tinkered with the organization structure to suit his preferences, firing people here and hiring people there. He redesigned the company’s logo. Bach’s name actually is Brumbach; why he shortened it, we’ll never know (nor will we know why he didn’t pick “Brum” instead of “Bach”). This struck me as evidence of a superficial personality trait. He was proud of an MBA he had received from an evening program at Pepperdine University – a talisman he seemingly believed made him smarter than most other people in the company. Much of his best work, in my view, consisted of doing nothing. Joe Mansfield was VP of Marketing, and Joe McFadden was VP of Sales. Mark Jackson (formerly VP Finance for the EMI Group, based in New York) became CEMA’s CFO in June 1991. True record men, all three of them. Bach wisely left them alone.

Whenever Bach took the initiative, he was prone (again in my personal opinion) to make management errors of varying degrees of culpability. He hired one of his colleagues from the Pepperdine program (who will go nameless) as VP of Human Resources – then, as now, a fancy name for the personnel department. This person specialized primarily in the new-age psycho-babble then fashionable. He embarked on a quixotic crusade against retailers who also sold used CDs, alienating several key customers and precipitating various lawsuits and governmental investigations. He spent several hundred thousand dollars on a research study by a “management consulting” firm (which also shall go nameless), resulting in nothing but a regurgitated version of the information we presented to it. While wasteful, this in and of itself was not particularly disturbing; what made it so was Bach’s belief that the management consultants actually had something useful to say. Behind his avuncular disposition, Bach didn’t have the specialized skills necessary to be a record executive. He wasn’t passionate about music; he just as easily could have been doing the same thing for an insurance or manufacturing company.

Most seriously (again in my personal opinion), Bach never grasped the dynamic of dealing with the various labels comprising the Capitol-EMI group, particularly as the Koppelman regime took over in New York, Virgin Records became ascendant, and the company sank into more-or-less perpetual turmoil. He let the corporate group push him around, rather than taking a stance that was in CEMA’s own best interests. From a corporate standpoint, a division chief has to do more than “watch his back and save his skin,” he(she) actually has to worry about maintaining the operational integrity of the company and looking out for its people, rather than simply bending to the prevailing winds. Bach did not do this, which, in my view, is the worst sin a division head can commit. One might argue this predicament is endemic to the politics of a large corporate organization, and to some extent it is. What distinguishes a great manager from a mediocre one, though, is his (her) ability to navigate these shoals successfully.

Aside from such matters, I segued into an odd role with Bach. For one thing, he looked to me to set policy with him. We would have long meetings, where he would solicit my opinion about various issues, I would express it, and then he would adopt it. I was in the uncomfortable position of having to develop an increasingly refined repertoire of expressions, to agree with Bach that what I proposed really was his idea all along. He also had me do most of his writing for him, particularly corporate presentations, magazine articles, press releases and even speeches. Here are a few examples:

Notes from various CEMA branch meetings

Article about record prices

I left the firm in March 1993. Amazingly, even thereafter, Bach continued to turn to me, having me perform various (uncompensated) tasks relating to CEMA, as well as personal matters. It amused me to play along with Bach’s concept that I actually enjoyed doing these things for him. Bach managed to hang on as CEMA’s President until Ken Berry fired him in March 1999. He then went to work for Disney Records, where he lasted until he was fired in June 2001.

Unfortunately, it appears Bach (evidently) still is refractory to understanding these issues. On September 8, 2010, in response to yet another management shake-up at EMI, he circulated an e-mail regarding the departure of Ronn Were, EMI’s head of North American operations. “I only hope the guy got my kind of package!” Bach wrote, most likely referring to a large severance payment he received after Berry fired him. I would like to suggest that remarks like these demonstrate lack of sensitivity to the dozens of people whose careers Bach was complicit in derailing. It’s not as though Bach deliberately eschewed being sensitive; rather, as his e-mail tends to demonstrate, he simply doesn’t know what this means.

CEMA Sales Policy Handbook – March 1993