Al Teller has stepped down as prexy and CEO of Alliance Entertainment and will be replaced by Eric Weisman, the company’s chief operating officer, who picks up president and CEO titles as part of the shift. The move had been expected, but Teller’s tenure at the helm of Alliance — and its subsequent filing for Chapter 11 bankruptcy protection — is clearly a black eye for the diskery vet who was considered one of the industry’s smartest execs.
The ankling also puts an end to Teller’s goal of building a record company and a distribution outfit that would compete with the majors.
Alliance has become strictly a music distribution outfit, which sources said is not the business Teller wanted to be in when he bowed Red Ant Entertainment, the startup label formed after he was ousted as chairman and CEO of the then-dubbed MCA Music Entertainment Group.
Teller will remain as a non-executive chairman of the board of Alliance and be removed from the day-to-day running of Alliance; those duties now will fall to Weisman.
Sources said that among the reasons Teller stepped down were objections by the creditors committee concerning Teller’s hefty compensation package. The company’s core business also has changed.
Teller’s exit follows the ankling of Alliance chairman and CEO Joseph Bianco, who stepped down in October, also because of compensation during bankruptcy issues.
Since filing for bankruptcy protection July 14, Alliance has been aggressively paring down overhead. It has prepared a business plan reflecting the new structure and long-term goals, but the plan has not yet been approved by the bankruptcy court.
As part of the restructuring, Alliance shuttered its Independent National Distribution network (INDI), closed all its warehouses, except in Dallas, and jettisoned numerous labels it had deals with, including Red Ant Entertainment. The label was sold in August to investment firm Wasserstein-Perella at what some observers suggest was a fire sale price.
Teller bowed Red Ant with backing from Wasserstein Perella. He segued out of Red Ant to Alliance in the wake of Alliance’s bankruptcy filing and in response to creditors raising conflict-of-interest issues. Red Ant was not part of the bankruptcy package, though it was an Alliance subsid.
Alliance also has actively been shopping its Castle Communications and Concord Jazz subsids.
But sources said the north-of-$50 million asking price for Castle and the $15 million price for Concord are widely considered steep and have kept suitors at a distance.
“My decision to step down as (prexy and CEO) of Alliance reflects the fact that, with the board’s recent approval of a business plan, the stage is now set for Alliance’s successful emergence from Chapter 11,” Teller said. “That has been my overriding goal since July, and now that the job is nearing completion, I feel my work here is — for the most part — complete.”
The post-bankruptcy goal, according to Teller, “is to build a one-stop, budget and special products distribution company” to be based in Florida.
Weisman joined Alliance from his chief operating officer post at Premier Artists Services, an artists representation firm that boasted such names as Frank Sinatra, Liza Minnelli and Steve Lawrence & Eydie Gorme on its roster.
David Hawthorne has been named chief financial officer for Alliance, filling the void created by Weisman’s ascension. Hawthorne, as chairman and CEO of Servico Hotels & Resorts, reorganized the company and guided its emergence from bankruptcy.