Mottola now CEO at Sony

He's raised Sony's market share

Sony Music Entertainment has upped Thomas D. Mottola to CEO, a promotion that recognizes Mottola’s successful efforts to elevate Sony from the middle of the pack, with single-digit market shares, to the industry’s top dog, with market-share tallies outpacing industry titan WEA.

The nod comes as Sony is enjoying its highest market-share and sales-chart berths in years, fueled by the soundtrack success “Titanic” but backed by a wide variety of albums.

The ascension comes on the 10th anniversary of Mottola’s taking the helm of the company, which was CBS Records when Sony bought it in 1988.

The CEO moniker — which is added to Mottola’s long-held prexy title — is fairly rare in the Japanese management structure and sends a public signal of support from Japan-based Sony brass.

Mottola, who also gets a new contract that will keep him in charge of Sony Music for many years, will continue to direct the music arm’s worldwide activities, as well as expanding its entry into new markets and businesses.

A challenge to WEA

But Sony’s market-share growth from 14.75% several years ago to 21% for the period ended April 26, has industry tongues wagging, with some suggesting Sony could close the year toppling distribution giant WEA as the leading music supplier. Sony’s label portfolio includes Epic Records, Columbia Records, 550 Music, the Work Group, Murmur, Dance Pool, Sony Music Soundtrax, Sony Classical and Relativity Entertainment.

“I am pleased to acknowledge Tommy’s and Sony Music Entertainment’s success with this well-earned promotion,” Sony Corp. prexy Nobuyuki Idei said in a statement. “Sony Music is one of Sony’s strongest assets, and its impact on our long term strategic plans grows each year. The company’s value has increased substantially since its acquisition in 1988, and its annual results have surpassed our expectations.”

Mottola will continue to report to Idei and Sony Corp. chairman Norio Ohga.

Record $3.8 bil revenue

Under Mottola’s aegis, Sony Music has claimed consistently growing revenues. The company posted a record $3.8 billion in revenues for the nine-month period from April 1 to Dec. 31, an 11.5% increase from the same period the year before. The company is expected next week to announce record revenues and earnings for the fiscal year.

Mottola has also managed and developed the expansion of Sony Music’s worldwide operations, which have included the opening of new outposts in Asia, the Far East and Eastern Europe, and has diligently expanded the company’s reach into urban music over the past 18 months by forming a number of talent alliances and restructuring its black music arm.

Mottola also oversaw the formation of Sony/ATV Music Publishing and the development of Sony Wonder, which is charged with building Sony Music’s stature in family entertainment.

“Tommy has done a great job. He always makes the artists feel like a priority, and that feeling transcends to his management team and throughout the company,” said Ken Hertz, a partner at Hansen, Jacobson, Teller & Hoberman, whose firm represents Sony family acts Will Smith and Destiny’s Child, among others. “As a person who is often asked by artists to level criticisms at a record label, you can’t level any of those usual criticisms at Sony.”

Mottola led Sony Music into the independent distribution field through its acquisition of RED Distribution, which is designed to reach specialized retail outlets. He was also responsible for the creation of Sony Music Studios, a state-of-the-art recording and visual arts complex in New York City, which filled a much-needed production facility void in the city.

“We feel very, very good over the things we have accomplished so far,” Mottola told Daily Variety. “The thing I’m most proud of here is that this (promotion) is not really just a recognition of me and my accomplishments, but it recognizes the accomplishments of this entire management team.”

‘Titanic’ towers

Wags suggest Mottola’s Sony is currently riding high primarily because of the charttopping success of Celine Dion and the soundtrack to “Titanic” — which is widely viewed in the industry as an aberration. They say that the company overspends on marketing and got ahead by paying lavishly for talent.

“So what if ‘Titanic’ is an aberration. Thank God. Everyone should have one,” Mottola said. “But if you look at the rest of the year with what is coming up with (the soundtracks to) ‘Ally McBeal’ and ‘Godzilla’ and all the other things, ‘Titanic’ is just one of those things that we had in addition to all of these other artists. It’s the breadth and the diversity of the music that has made this company successful.”

Dealmakers surveyed suggest that Sony often raises the ante for a new artist or soundtrack — it paid more than $3 million for the rights to the “Ally McBeal” album, which topped other offers significantly — but they also noted execs at the labels often spend as much non-recoupable money as they do on recoupable funds (money artists must repay the label out of royalties) in an effort to break or market an act.

Mottola has also championed new artists such as Fiona Apple, Fugees, Jamiroquai, Maxwell, Oasis, Pearl Jam and Savage Garden and has been known for hiring some of the industry’s best and brightest, including former Virgin Records chiefs Jeff Ayeroff and Jordan Harris.

He’s has helped shepherd the recording careers of superstars Michael Bolton, Mariah Carey, Celine Dion, and Gloria Estefan, among others, and has made the long-term career development of music industry legends Tony Bennett, Bruce Springsteen, Billy Joel, Bob Dylan, and Barbra Streisand a priority.

Prior to joining CBS Records, Mottola was an influential personal manager. He founded and was president of Champion Entertainment, where he managed the careers of such stars as Hall & Oates, John Mellencamp and Carly Simon.