Rhino Facing Extinction Under Warner
By ANDY FIXMER
Staff Reporter
With the clock ticking on the five-year deal that let the once idiosyncratic Rhino Records operate autonomously, its parent company, Warner Music Group, has started siphoning off senior management.
In the past two months, six Rhino executives have been promoted out of the label and into another Warner Music Group division called Warner Strategic Marketing. No replacements have been named.
The spate of transfers comes as an agreement between Rhino and Warner allowing L.A.’s homegrown alternative label to operate independently is set to expire next month. The deal was struck when Time Warner, now AOL Time Warner Inc., bought the 50 percent of Rhino it did not already own in May 1998.
Both company founder Richard Foos and his longtime partner, Harold Bronson both given five-year employment contracts in 1998 left within four years of the deal.
Except for a steady stream of press releases from Warner Strategic Marketing’s human resources department, the company isn’t commenting.
“I’ve discussed this with the people here,” said Kevin Kennedy, Warner Music Group’s media relations director, “and we don’t feel it’s a story that’s in our best interest to cooperate on.”
Former Rhino executives, through intermediaries, declined to comment, citing confidentiality clauses they signed before leaving the company.
Foos, who recently launched a label based on Rhino’s founding principle of buying up and repackaging older catalogs, declined through a spokesman to comment about the changes underway at Rhino.
Rhino began in the early-1970s when Foos sold stacks of old blues records from the trunk of his car to UCLA students, opening his first Rhino Records store in 1973 on Westwood Boulevard.
Foos and Bronson branched out into buying older catalogs from music labels and reissuing them independently as collections.
Among its quirky compilations were “Nuggets: Original Artyfacts From the First Psychedelic Era, 1965-1968,” “Have a Nice Decade: The ’70s Pop Culture Box,” and “Golden Throats: The Great Celebrity Sing-Off.” Rhino also reissued the Elvis Costello catalog and box-set compilations of artists as diverse as Aretha Franklin, Ray Charles, the Cars, Average White Band and America.
After two decades of independence, Rhino struck a deal with Time Warner’s Atlantic Records in which, in exchange for a 50 percent interest in their company, Foos and Bronson were given access to Atlantic’s library and Atlantic became Rhino’s distributor.
The partnership worked well, and six years later, in 1998, Warner purchased the remaining 50 percent stake in the company and opened Rhino’s access to all of Warner’s artists.
As part of that deal, according to published reports at the time, Rhino was to be given a performance-based fee for a period of five years. At the end of the contract, the label would be folded into the Warner Music Group.
Rhino’s announcement last week that it would be reissuing long-time Warner icon the Grateful Dead on vinyl is the most recent example of what has become routine.
Instead of buying up old jazz, blues and folk catalogs and reissuing them in collector’s editions or box sets the core of what made Rhino a name in the music industry the company has settled into a routine of re-packaging Warner artists.
It’s a role assigned to the label since Warner Music Group executives created Warner Strategic Marketing a year ago and combined Rhino and all of its other marketing operations under one roof.
Days before Warner announced that change, Foos resigned as the label’s president, despite having another year and a half remaining on his employment contract.
Scott Pascucci, president of Warner Strategic Marketing, said in a press release at the time that Rhino would be used for creating reissues and specialty packages for its other labels, which didn’t have the infrastructure or dedicated staff needed to do the job.
“Rhino will expand its activities in using Warner, Elektra and Atlantic masters and working with more and more of the major catalog artists on those labels,” he told Billboard magazine. “The licensing between labels within the industry has gotten a bit more difficult than it was when Rhino first started in the business. That forces everyone to turn a little bit more toward their own catalog.”
Change of identity
Along with its operations, Rhino’s identity has been altered as well.
The company was relocated last year from its quirky Westwood offices where the floors were covered in recycled vinyl from broken records to Warner’s offices in Burbank.
Also within the last year, Rhino’s support of a number of liberal business and social organizations has dropped off significantly, according to officials at the Social Venture Network and Businesses for Social Responsibility, two groups that had been beneficiaries of its largesse over the years.
“We haven’t had contact from anyone at Rhino for over a year,” said Pamela Chaloult, co-executive director of the Social Venture Network. “We’ve tried to recruit them, but so far there hasn’t been a response.”
The drop-off in its social activism appears to coincide with Foos’ departure.
Foos has since teamed up with former Rhino Vice President Bob Emmer to launch Shout Factory. Following the same formula that made Rhino a success, the new label quickly bought up the catalogs of Somerville, Mass.-based Biograph records, which consists primarily of old jazz, blues and folk artists.
Competing with his former label doesn’t seem to faze Foos, who told Jazz Times “It forces us to be even more creative to come up with really interesting compilations that we haven’t already done.”
