In the latest round of musical chairs in the exec suites at EMI, Gary Gersh, prexy/CEO of Capitol Records, is leaving the label. Sources said Gersh told staffers during a morning gathering that he felt that after five years at the Capitol helm it was time for a change. He will exit today.
Gersh, who spent Monday calling artists and their managers to inform them of his exit, will be replaced by Roy Lott, deputy prexy of EMI Recorded Music, who will add the duties of label prexy to his role overseeing the conglom’s Stateside operation.
Sources said Gersh, who inked a one-year contract extension earlier this year, had been expected to leave the label before his pact expired (Daily Variety, June 18).
His exit comes a week before EMI label chiefs head to Spain for a round of international meetings.
“Gary has made excellent contributions to Capitol during his tenure …,” EMI Recorded Music CEO Ken Berry said in a statement. “We wish him well in his future endeavors.” Berry said Gersh was “leaving to pursue other interests.”
Gersh’s ankling, according to sources, was precipitated by the recent change in the organizational structure that had him reporting to Lott, rather than directly to Berry, as he previously had done.
Previously, none of the label chiefs in the EMI conglom, such as Virgin and Capitol, reported to Lott, when the former exec veep at Arista Records joined EMI. Lott said he would “revitalize the label.”
EMI is set to establish a Capitol Music Group, where execs running the labels under the new umbrella, such as Capitol Nashville, will report to Lott.
“It is the fifth president that we have been involved with and it is always disturbing to see a change,” Jeff Hersh, Bonnie Raitt’s manager told Daily Varety. “It is especially disturbing when it comes early in the course of the release of an album. We are disturbed for Gary and our artist as well.”
Raitt recently released her latest Capitol Records disc, “Fundamental,” and is touring to support the album.
Lou Mann, senior veep and g.m. of Capitol, is expected to be given a wider role and serve as Lott’s second-in-command in a move designed to send a message of stability and continuity to Capitol’s artists and managers.
Mann has been the go-to guy at the label for several management regimes and has been instrumental in keeping the back-office efforts of the label, such as marketing and promotion, running smoothly and efficiently.
But those same managers are concerned that Mann, whose presence offers a comfort zone to longtime acts on the roster and whose skills are well-respected, will be cast aside if a new chief is installed.
The exit of Gersh ends the sometimes rocky tenure of the former Geffen Records A&R whiz.
Gersh was brought into Capitol in 1993 by former EMI-Capitol Music Group CEO Charles Koppelman to make the label a player in the alternative rock marketplace.
Industry insiders note that hitting the 500,000 to 1 million units sales plateau on alternative acts, such as Radiohead, Foo Fighters and Everclear, as Gersh did, is quite a feat. EMI execs, though, felt Gersh should have had more mainstream successes in the five years and several 3 million- or 4 million-unit selling acts. He was often criticized by EMI execs for not diversifying his roster.
EMI execs asserted that while Gersh’s Capitol is on a hot streak with the soundtrack to “Hope Floats” and discs from Marcy Playground and Everclear, the label’s fortunes during Gersh’s run have not been consistently impressive.
While Gersh “made his numbers” — industry parlance for meeting sales projections — in the early years of his run, aided by catalog discs, such as the Beatles Anthology series and Frank Sinatra’s “Duets,” with newer signings, sources said the cutbacks mandated by EMI brass made it difficult to successfully promote and market albums after winning acts in heated industry bidding wars.