Warner Music to fund payoff for CEO's exit
Maverick Records co-founder and CEO Freddy DeMann has agreed to leave the label for $20 million, ending months of in-fighting at the firm.
DeMann agreed to sell his 20% stake to the label’s other partners, including Madonna with whom he started Maverick seven years ago. Warner Music Group, a joint-venture partner, will fund his payoff. The deal was reached late Friday. DeMann, the former manager of Madonna, will remain a consultant to the conglom.
The resolution earned Maverick partner and A&R chief Guy Oseary, who is credited with signing some of the label’s biggest acts, a new long-term employment deal and an increase in his ownership stake, according to insiders. General manager Ronnie Dashev remains in place.
Oseary had warned conglom execs that he would leave the label if issues surrounding DeMann were not settled. It is a bittersweet victory for Oseary, as he was brought into the Maverick fold by DeMann.
DeMann’s departure clears the way for the label and WMG to extend its joint-venture pact, which had been set to expire at the end of May.
Renewal talks had stalled because of the dispute among the partners.
The conglom and the label have inked what insiders are calling a long-term extension to the joint-venture deal. Maverick releases will continue to be funneled through Warner Bros. or Reprise Records.
Hunt for new acts
Madonna and Oseary, who is credited with signing Alanis Morissette, Maverick’s biggest act, will now be in control of the label and can return to wooing new acts.
Music industry attorneys and managers have been reluctant to ink deals with the label since the summer until it was clear who would be running it.
Maverick has also been on “pause,” as one insider described it, only making soundtrack deals while the talks with DeMann dragged on.
Madonna and DeMann each own about 20% of the label, with WMG holding 50% and other Maverick partners such as Oseary and Dashev previously holding smaller stakes.
“Our relationship with Maverick has been extremely productive, and we couldn’t be happier that we’ve all agreed to move forward together,” said WMG co-chairman/co-CEO Bob Daly.
Deal ends row
DeMann’s deal ends the discord between he and Madonna, which was sparked shortly after the singer replaced him as her manager and put her personal assistant Caresse Norman in charge of her day-to-day schedule. (Daily Variety, July 26, 1996).
In 1997 Madonna started film and TV production company Mad Guy with Oseary, excluding DeMann.
It has a number of projects in the hopper, including several at New Line Cinema.
The record industry is littered with labels started by artists only to be closed by their conglom parents after years of lackluster signings and hemorrhaging red ink.
But Maverick, started with less than $10 million from WMG and currently worth $120 million, is among a handful of successful so-called vanity labels.
It became profitable in its third year of operation, helped by Candelbox’s debut disc — the label’s first home run — and has been profitable every year since.
The success of Morissette’s U.S. debut, “Jagged Little Pill,” proved Maverick was a major player. At nearly 30 million units sold worldwide, the album is the industry’s best selling major-label debut.