Seaworthy : Val Azzoli Proves He Can Captain the Ship in Atlantic’s Ocean

They called him the accidental chairman.

When Val Azzoli was promoted last year to run Time Warner’s Atlantic record division, he had so little support that people in his own company were placing bets on how soon he would be fired. Azzoli, critics said, would never have been considered for the job if his boss and six other music executives had not been axed the year before in a corporate blood bath at Time Warner.

Competitors were not kind either.

Many questioned whether the quiet, bushy-haired marketing whiz had the executive acumen to navigate a powerhouse like Atlantic, which for decades had been run by industry veterans Ahmet Ertegun and Doug Morris. Some criticized Azzoli’s laid-back personality, claiming that he lacked the charisma and creative vision to attract, sign and develop new talent--without which Atlantic was doomed to fail.

“It’s true. A lot of people were saying some pretty horrible things,” said Warner Music Group co-chief Bob Daly, who turned over the reigns at Atlantic to Azzoli. “They said Atlantic was a mess and Val didn’t have what it takes to fix it. But you know what? They were wrong.”

After 16 months on the job, Azzoli’s cautious, low-key approach is beginning to pay off. Atlantic is currently the No. 1 label in the United States, garnering nearly 9% of the domestic market so far this year in sales of current albums. Atlantic, which has a rich 50-year history of classic rock and soul recordings, also leads the nation’s conglomerates in sales of catalog albums.

A string of diverse hits from such newcomers as folk singer Jewel, rapper Lil Kim, country star LeAnn Rimes and R&B; diva Aaliyah as well as a blockbuster soundtrack from the “Space Jam” film helped generate an estimated $175 million in worldwide sales for the first quarter, sources said. Global revenue for 1997 at Atlantic Group is projected at more than $700 million.

Had Time Warner Chairman Gerald Levin not caved into pressure from rap music foes and sold off Atlantic’s interest in hot Interscope Records, Azzoli’s company would control a 15% slice of the U.S. market--more than twice the size of its nearest competitor.

(Dumping Interscope, however, didn’t prevent Time Warner from selling rap music with sexually explicit and violent lyrics. Two of Atlantic’s hottest current acts, Lil Kim and Junior M.A.F.I.A., who are signed to the Atlantic affiliated-Undeas/Big Beat label, released albums last year rife with imagery as raunchy as anything ever distributed by Interscope.)

Lil Kim and Junior M.A.F.I.A. are just two of the new cutting-edge artists in Atlantic’s roster who have helped restore credibility to the label in the black music field. Although Azzoli’s black music department has come under fire because it is not run by an African American executive, Atlantic still racked up a string of top 10 albums on the nation’s R&B; chart by such acts as Aaliyah, Brandy and the “Space Jam” soundtrack.

Azzoli has also had success breaking records in the pop and rock genres by such new acts as Jewel, Donna Lewis, Duncan Sheik, Matchbox 20 and Poe. Critics question whether these latest discoveries will turn out to be one-hit wonders or have the punch to continue in the footsteps of previous Atlantic superstars.

But even Azzoli’s critics acknowledge that his company has done a respectable job marketing follow-up releases by such acts as Collective Soul, Seven Mary Three and Hootie & the Blowfish--who sold more than 3 million copies of its new album last year despite a media backlash against the band.

“Atlantic is doing a terrific job,” said MCA Music Entertainment Chairman Doug Morris, the former Atlantic chief who was fired four years after he hired Azzoli in 1990. “I’m proud of them. Val’s team has really pulled together and delivered.”

Singer Jewel echoed Morris’ assessment.

“I am certainly not what the industry would consider to be a commercial artist, but these guys believed in me and never gave up,” said Jewel, whose folksy “Pieces of You” album has spawned two pop radio hits and sold nearly 3 million copies since its release more than a year ago. “Val and Ron [Shapiro] and the rest of their team took a giant business risk on my music--and slowly but surely, it has paid off.”

Azzoli, who shares the co-chairman and co-chief executive title with Ahmet Ertegun, credits Atlantic’s current revival to his new management team of young aggressive executives: R&B; whiz Craig Kallman, promotion ace Andrea Ganis, talent scout Jason Flom and Ron Shapiro--a former publicist whose first artist signing, Duncan Sheik, has already broken into the top 100.

In an interview at his New York office recently, Azzoli acknowledged that his ascension at Atlantic has been a bittersweet struggle, wrought with fear and insecurity--especially in light of the corporate infighting that resulted in the dismissal of his mentor Morris.

“It was hell. Everybody here was terrified for our jobs,” Azzoli said. “You see, Doug is a great music guy and he touched all of our lives. He was like the big papa bear who protected us from all the horrible corporate evil out there. When Doug got blown out, we were like a bunch of innocent cubs huddled around the cave, terrified, looking at each other, saying, ‘Hey, now who is going to go out and get the food?’ And somehow I got appointed as the food gatherer. I had to learn a lot of things very fast.”

Azzoli, 42, broke into the music business working in publishing and artist management before joining Atlantic in 1990 as a special assistant to Morris. Azzoli was elevated by Morris to run Atlantic’s muscular marketing machine, which spit out a series of surprise multimillion-dollar-selling hits during the early ‘90s by such acts as Hootie & the Blowfish and Stone Temple Pilots.

He was promoted to president in 1995 after a corporate battle that ended in the exit of Mo Ostin, Lenny Waronker, Bob Krasnow, Danny Goldberg, Morris and others. Within months after being elevated to co-chairman, Azzoli shook things up at the company, firing dozens of employees and artists as well as cutting ties with several unprofitable joint ventures.

Although the charges for the restructuring cut into profit last year, Azzoli said the move to downsize forced Atlantic to release fewer albums annually and to concentrate its resources on turning those recordings into hits. That formula paid off for Jewel, but did not work for such Atlantic acts as Bad Religion, the Lemonheads, Jordan Hill and the Braxtons.

When asked what he thought about criticism of his style, Azzoli said he thinks that too many people working in the music industry take themselves too seriously.

“I don’t dispute the fact that I’m just a working-class schmuck, but artists these days are not in awe of executives who pretend to be bigger than life,” Azzoli said. “Musicians these days are sophisticated individuals who often understand marketing and sales data. They can’t be razzle-dazzled by that hip music-man pitch. What they want is to sign with a company that has a great team and a proven track record--and that’s us.

“For example, we met with this really talented kid last year who told us a story about how a certain executive tried to sign him over breakfast at this fancy restaurant. Apparently the executive blabbed the whole meal about how amazing he was and how he had basically invented the music business. When the executive got done, the kid said he asked him if he had any questions. And the kid said, ‘Yeah, just one. Is it all right if I leave?’ ”