Interscope Music Group

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Interscope Music Group

10900 Wilshire Boulevard
Los Angeles, California 90024
U.S.A.
Telephone: (310) 208-6547
Fax: (310) 208-7817
Web site: http://www.interscoperecords.com

Division of Universal Music Group
Incorporated: 1990 as Interscope Records
Employees: 150
Sales: $260 million (1999)
NAIC: 51222 Integrated Record Production/Distribution

Interscope Music Group, with its Interscope Records label, is one of the most successful and controversial record companies in the music industry. Founded in 1990 by veteran music producer Jimmy lovine and Ted Field, one of the heirs to the Marshall Field fortune, Interscope produces and distributes such musical stars as Primus, the Wallflowers, Dr. Dre, Marilyn Manson, and Nine Inch Nails. In addition to producing its own artists, Interscope has also been involved with the distribution of other, smaller industry labels, most notoriously that of Death Row Records, a high-profile West Coast rap label. After being initially funded by Time Warner, Interscope is now owned in part by Universal Music Group (previously MCA Records), which is a part of the Seagram Company. Interscope specializes in producing the sort of music of which other, more traditional companies are wary; hard-core, gangsta’ rap, alternative fringe rock, and the sub-genre known as Goth are all a part of the company’s roster.

Interscope’s Beginnings: 1990–96

In an industry famous for its eccentric, iconoclastic characters, Interscope co-founder Ted Field upon first glance might seem an anomaly. Born into the Chicago area Marshall Field family, Field was slated from childhood to follow in the family’s footsteps, first attending prestigious private schools, then running the family fortune, which included the Marshall Fields department stores and the Chicago Sun Times. From his childhood, however, Field proved himself to be a rebel and risk-taker. After spending much of his adolescence in Alaska, Field moved from school to school, finally becoming involved in race car driving and, later, fund-raising for the Democratic Party. In 1984, after a less than harmonious period of negotiation with his brother, Field inherited over $200 million from the family fortune and within a couple of years had settled permanently in California, where he developed an interest in film production.

It was during this time that Field met music producer Jimmy lovine, and, using $15 million of Field’s own inheritance, the two together founded Interscope Records in 1990. At the same time he started his record company, Field also founded Interscope Communications, a film production company which eventually produced such film hits as “Three Men and a Baby,” and the thriller “The Hand that Rocked the Cradle.”

Besides Field’s abundance of financial resources, Interscope had another advantage from its inception: the expertise and reputation of Jimmy lovine. lovine had been involved in the music industry for several years and had been a producer for acts as various as the New York-based singer Patti Smith to the phenomenally successful pop band U2. Between lovine’s inside influence and Field’s high-profile financing, it wasn’t difficult for Interscope to find further backing, both in the form of monetary support and publicity, in Time Warner, a huge company which was involved in all aspects of the entertainment and communications industries. Time Warner’s music production division saw in Interscope an opportunity to share in profits from music which the publicly owned company could not otherwise overtly touch.

Shortly after the establishment of Interscope, a small rap label called Death Row Records was started by former professional football player Marion “Suge” Knight. In 1992, Death Row produced Dr. Dre’s “The Chronic,” a rap album filled with explicit, violent lyrics, the nature of which were to set the standard for gangsta’ rap for years to come. Although Death Row had successfully produced “The Chronic,” the company could not find a distributor for the album, as most well-established labels found the contents too controversial. Seeing profit in controversy, however, Interscope stepped in and agreed to distribute the album, thus establishing an intimate partnership with Death Row. Interscope’s gamble proved a success; “The Chronic” was one of the biggest albums of the decade, selling almost four million copies, and helped to make the company a real contender in the music industry.

“The Chronic” helped establish a new genre of music, and gangsta’ rap in the early 1990s became one of the most popular forms of hip-hop, its appeal crossing cultural, economic, and racial barriers. Death Row’s Dr. Dre pioneered gangsta’ rap, and other Death Row artists, all of whom were distributed by Interscope, were not far behind: the rap artists Snoop Doggy Dogg, Tha’ Dogg Pound, and Tupac Shakur were all part of the label’s roster during the 1990s, and they all sold millions of albums.

Soon after the distribution of “The Chronic,” Interscope began producing other artists as well, focusing particularly on hard-core alternative music, such as that of the bands Nine Inch Nails and Primus. The popularity of Nine Inch Nails allowed the band to create in conjunction with Interscope a small, alternative rock label called Nothing Records, which Interscope distributed. Interscope not only focused on fringe sub-genres, however. The company also produced the mainstream pop band No Doubt, which Interscope distributed in partnership with Trauma Records, and which brought in millions in revenue for the company.

The Politics of Music: Interscope in the Mid-1990s

By 1995 Interscope had well established itself as a renegade company willing to take on artists, no matter how outrageous or controversial, that other labels would not touch. While its reputation had garnered a great deal of profit for the company—well into the hundreds of millions by 1995—it had also in turn put Interscope in a high-profile position which, given the political climate of the time, came at a cost to the company’s stability.

Indeed, almost from the company’s inception it had been subject to political upbraiding of the most public sort. In 1992, after Interscope produced and distributed Tupac Shakur’s “2Pacalypse Now,” an album which would later be blamed in part, by some, for police shootings in Texas. At the time, Vice-President Dan Quayle announced to the press that “There is absolutely no reason for a record like this to be published by a responsible corporation. Today I am suggesting that the Time Warner subsidiary Interscope Records withdraw this record. It has no place in our society.” The album, which brought Interscope millions of dollars, however, continued to help the company garner stature and financial gain.

Had Interscope not been half-owned by the corporate giant Time Warner, a company which had to answer to both the financial and moral concerns of its shareholders, it might not have found itself in the middle of an increasingly mercurial and divided public debate in the middle of the decade. However, that is exactly what happened to the company in 1995, when a political activist named C. Delores Tucker, head of the National Political Congress of Black Women, bought a few shares of Time Warner stock. In September of that year, Tucker attended a shareholder’s meeting in New York, and there, with several members of the press in front of her and conservative leader William Bennett by her side, she made a 15-minute speech denouncing Time Warner’s involvement in the production of gangsta’ rap, taking pains to point out the corporation’s ownership of the notorious Interscope.

Tucker placed Time Warner’s part-ownership of Interscope at the heart of an increasingly heated battle, the climax of which occurred later that same year when Interscope announced its intentions to release the much-hyped album by Tha’ Dogg Pound called “Dogg Food.” The album was rumored to be filled with lyrics of extreme violence and misogyny, and Tucker made it her personal—and political—mission to prevent the album’s release. Time Warner grew increasingly uncomfortable under such highly-publicized negative limelight, particularly when the prominent conservative politician Bob Dole became involved, calling the music Time Warner was producing “nightmares of depravity.”

Time Warner could not censor what Interscope chose to produce without breaking a legal contract signed by the two companies. If Interscope opted to release “Dogg Food,” it could do so with or without Time Warner’s blessing. Interscope did release “Dogg Food,” and in doing so forced Time Warner’s hand; the latter bowed out of its 50 percent stake in Interscope at the end of the year, despite the fact that the company was bringing in tremendous amounts of revenue. Time Warner sold its part in Interscope back to the company for a little over $100 million, a price considered by many in the industry to be well below what the growing company was worth.

Tucker declared a political and moral triumph upon hearing of the sale, claiming that “It’s a great victory for our children and America’s future, and it does show me that Time Warner does have a corporate soul.” Some of the artists at Interscope, however, were just as happy to be free of the mainstream influences of Time Warner. Dr. Dre, speaking to U.S. News & World Report, said that Interscope’s new independence was “going to be a great coup for Interscope because they can make more money. And I won’t have to deal with Papa Warner.”

Key Dates:

1990:: Interscope founded by Ted Field and Jimmy lovine.
1992:: Company has its first breakthrough with Dr. Dre’s “The Chronic.”
1995:: Time Warner sells its 50 percent of Interscope back to the company.
1996:: Edgar Bronfman’s Seagram Co. buys that percentage at a great profit to Interscope.
1998:: Interscope breaks its ties with Death Row Records.
1999:: Geffen and A&M record labels are folded into Interscope operations, following Seagram’s purchase of Poly Gram Records.

Dr. Dre was right. Interscope continued to not only survive, but thrive. In 1996 the company had songs at the top four spots on Billboard’s charts, an unmatched record established in 1976, 20 years earlier, by Columbia records. The company was flourishing in genres spanning the gamut of popular music and was successfully involved in the distribution of such lucrative labels as Death Row and Nothing Records. While Tucker may have felt Time Warner’s capitulation to public pressure was a moral victory, the sale did nothing to slow or censor the proliferation of music from Interscope’s controversial artists. Other companies, too, saw more profit than risk in Interscope, and four months after the company bought back Time Warner’s 50 percent interest in Interscope, it sold that same stake to MCA Records for just over $200 million, netting a $100 million profit for the company.

MCA had recently been bought out by Edgar Bronfman’s Seagram empire, and the CEO was eager to turn MCA into a powerful force in the pop music industry. With the 50 percent acquisition of Interscope, MCA became the fourth largest record company in the business, helping the aging company become up-to-date on current musical trends. Bronfman, however, was wary of the furor created over Interscope’s involvement with Death Row and maintained a right to refrain from supporting the release of material deemed too controversial or subversive by MCA standards, a clause Time Warner had lacked with Interscope.

Severing Ties and Expanding Appeal: Interscope in the Late 1990s

In 1997, Newsweek claimed that “In a business where finding a successful act is about as easy as spotting a necktie at the Grammy Awards, Interscope has assembled an unmatched array of alternative-rock and urban-music hit makers.” However, in that same article, founder Ted Field confessed that, due to the scandal surrounding Interscope’s distribution of Death Row and the controversial lyrics of some of its other stars, particularly Marilyn Manson, he could no longer even donate money to the Democratic Party, of which he had been a longtime supporter and fund-raiser. His company had simply become too hot, both socially and politically.

Field’s new partner was quick to notice this, especially when Death Row’s head, Marion Knight, was sent to jail for nine years on assault charges. MCA—renamed Universal Records—pressured Interscope to drop its contracts with the besieged Death Row. Not only had Knight been jailed, but Tupac Shakur, Death Row’s most lucrative star, had been gunned down in a gang-land style shooting the year before, and there were questions over ownership of the prolific star’s estate. Finally, in 1998, Interscope acquiesced to Universal’s request, and the company cut its ties with one of its most profitable labels, a move which earned Interscope not a little bad press in the rap community.

Interscope had also come to loggerheads with Trauma Records, which was involved in the production of the popular band No Doubt. In 1997, the two companies settled out of court, with Trauma Records receiving recording rights to the band as well as an additional $3 to $5 million from Interscope. Thus, the late 1990s brought even more challenging times to Interscope, with sales dipping and the company losing some of its more bankable artists. However, with sales still well over $200 million in 1998, the company could hardly have been said to be in dire straits.

After cutting ties with Death Row, Interscope continued to expand its roster, most notably developing a focus on the increasingly popular Christian bands which appealed to a crossover secular audience. In 1999 the same company that had delivered “The Chronic” to gansta’ rap enthusiasts produced an album from the Christian children’s choir “God’s Property,” with impressive financial results. As Interscope moved toward a new millennium, it was joined by popular record labels Geffen and A&M, when Bronfman and the Seagram Co. acquired the holdings of PolyGram Records early in 1999. Under the auspices of the newly created Universal Music Group (UMG), Interscope management expected that the remaining 50 percent stake in Interscope would be acquired by UMG. Despite its new corporate structure, the company continued to attract the kind of controversy and publicity on which it was founded. In the spring of 1999, for example, Interscope executive Steve Stoute was involved in a melee in Interscope’s New York offices which landed him in the hospital and his alleged attacker, Sean “Puffy” Combs from rival Bad Boy Entertainment, in jail on charges of second degree assault and criminal mischief. In July of that year, the company named a new senior vice-president: Fred Durst, lead singer from the band “Limp Bizkit.”