EMI Music announced a major reorganization of its North American operations yesterday, naming Charles Koppelman chairman/CEO of a revamped EMI Records Group North America effective April 1.
The new corporate flow chart will see Koppelman preside over branches previously under the direction of Capitol/EMI president/CEO Joe Smith, who announced that he will be leaving the company when his contract expires at the end of March, coinciding with the end of the company’s fiscal year.
EMI Music previously operated under a system that saw Smith running most of the West Coast and Koppelman the East, both reporting to EMI Music president Jim Fifield, with Virgin Music Group the newly added wild card in the structure.
Yesterday’s announcement had been widely expected, with rumors heating up last month.
The only question in most observers’ minds was the final reporting structure of the revamped company, with speculation centering on whether Virgin Records or Capitol president/CEO Hale Milgrim would report directly to Koppelman or Fifield.
Koppelman, currently responsible for the operations of the combined SBK, Chrysalis and EMI Records (consolidated in November 1991 as EMI Records Group North America), will now add responsibility for Capitol Records, Liberty Records , Capitol-EMI Canada, Angel Records, Blue Note Records, Capitol-EMI Latin, the CEMA Distribution arm and North American manufacturing. He will direct those operations from his current base in New York.
An announcement is expected by the end of the week concerning who will assume Koppelman’s former duties, with EMI Records Group executive VP Daniel Glass a strong contender. Fifield praised Koppelman as “a winner. He has strong leadership skills and sees the big picture. He has a track record of being able to pick hits as well as artists for international potential.
“He shares my vision about how to make the American operation more successful and make EMI Music more successful. In the end, I am philosophically compatible with Charles. He has been, and now will become, more and more a strong ally of mine.”
Virgin Music Group will remain the lone EMI Music label outside Koppelman’s purview. VMG chairman/CEO Ken Berry will continue to report to Fifield, as will Koppelman, EMI Music Publishing chairman/CEO Martin Bandier, IRS Records chairman/CEO Miles Copeland, EMI Classics president Richard Lyttelton, EMI Music senior VP/general counsel Guy Marriott, EMIRG U.K. and Eire president/CEO Rupert Perry, EMI Music European sector executive VP/CFO Philip Rowley, and International sector president/CEO David Stookley.
Fifield and Koppelman both emphasized that yesterday’s changes were vastly different from the shakeups that followed the merger of SBK/Chrysalis/EMI and the Virgin acquisition last year, both of which saw severe layoffs. Staffers on both coasts were said by sources to be extremely nervous about prospects of a cutback in the wake of the management revamp.
“This is not an organizational change designed to downsize or change the management,” Fifield said. “It’s a transitional change to one leader.”
Koppelman said yesterday that the new structure of the company “gives us more focus, both from the distribution and labels point of view. We can manage our business better.
“It’s as simple as organizing our manufacturing in a more orderly fashion, reorganizing the way we deal with retail, which was somewhat splintered. I was sitting on the East Coast and had my thoughts and ideas, and (management) on the West Coast had their ideas. Though we worked well together, it wasn’t pulled together. That was something (Fifield) had wanted to do.”
Fifield said that the transition from Smith to Koppelman will be orderly, given that most of the label presidents have recently signed new, long-term employment deals.
Smith said yesterday that he was leaving on his own terms. “This is no palace coup,” he said. “I was offered a new contract about six months ago and I began to realize how administrative this job had become, so involved with numbers and logistics. I didn’t want to do that for a long-term future.”
He added that he would continue to be active in the music industry in a more artist-oriented venture after April 1, although wherehe would be doing any projects was open.
“I haven’t spent any time thinking about it,” Smith said. “I’m not in a position where I have to go to work April 1.”