By Jeb Wright
Profile Shots (C) 2013 Sword Photography LLC
Tom Lipsky is the King of Classic Rock. No one, from a music business standpoint, has done more for Classic Rock artists than Tom over the last 20 plus years. From his time as the head of CMC International, Sanctuary and his current venture, Loud and Proud, Lipsky has dedicated his career to the music he loves. Tom has recently announced that his newest label, Loud and Proud, has partnered with Red Distribution ending a five year joint-venture relationship with Roadrunner Records. The label is breaking the rules of record company and artist relations, giving the artist the deal that they deserve.
In the past, Lipsky has worked with such artists as Neil Young, Lynyrd Skynyrd, Kiss, The Allman Brothers Band, Widespread Panic, Iron Maiden, Styx, Megadeth, Bad Company and REO Speedwagon, Rush, Rob Zombie, Kiss, Lenny Kravitz, Kenny Wayne Shepherd, The Steve Miller Band, Collective Soul, Meat Loaf and Ratt.
Expectations are high for Loud and Proud as Tom Lipsky is bringing excitement back to the music he loves. In the interview that follows, Tom details how his label will work and how his thinking outside of the box may not only save the Classic Rock industry, it may actually make it thrive once again.
Jeb: The big news is that Loud & Proud is going to take the music industry by storm. Tell me what it is that you’ve decided to do.
Tom: In a nutshell, what I’ve decided to do is partner with a company that gives me total creative autonomy to deal with the artists I choose to deal with in a way that they choose to follow. Instead of joint ventures that I have done in the past with BMG and Warner Music related companies, Loud and Proud, from a business standpoint, will be controlled entirely by Tom Lipsky.
Jeb: Have you ever had this much creative freedom before?
Tom: When I first started CMC International, in the early days, we are talking about the early ‘90’s, I did. We were an independent start up record company and we had no experience with that end of the business before. So, in the beginning, I did have total autonomy with CMC. I had partners, but they were on a total distribution relationship basis with several companies.
We finally landed BMG in 1996 and turned it into a joint venture. From that point forward, with CMC, and later Sanctuary, who purchased CMC, and finally Loud and Proud under the Roadrunner joint venture, in all of those lives, my partner company had approval rights over what artists I signed.
BMG and Warner are both major labels with lots of regulations. There were templates that I had to follow in terms of the contracts I offered to artists. There were terms of how deals needed to be structured and what the company would get and what the company was allowed to give to the artists. I pushed against those parameters as hard as I could to make the best deals for the artists that could humanly be made. I am proud of that and I think artists and managers recognized that within the mold that we had to work in, I was able to offer something other than the standard deals that were being offered. There were limitations as to how far I could bend the rules without having them blow up in my face.
Jeb: How with this venture be different?
Tom: In this case, I create the rules. Red Distribution is a fantastically successful division of Sony, just this year alone they scored #1 Albums in Billboard with Mumford & Sons and Jason Aldean. They are there to provide distribution to everything that my artists and I create including marketing, promotion, advertising and publicity for those creations. They will get the releases as commercially successful and available as humanly possible. They are a business partner, but they have given me total freedom as to what Loud and Proud will be moving forward.
Jeb: Roadrunner didn’t turn out as well as you had hoped.
Tom: Up until the last year, the Roadrunner years, in a completely different way, were really energized. From Cees Wessels, the Chairman, who is no longer there, to Jonas Nachsin, the President who is also no longer there, to Madelyn Scarpulla, who is still there as the Senior VP of Marketing, and also worked with me at Sanctuary, to many others around the company, they were a team that had tremendous energy and love and passion for music and artists.
The heads of Roadrunner and I did not always agree on what artists should be part of the effort that I was leading. Loud and Proud could have done ten times what we did do if they had more understanding of veteran artists. That said I am very proud of what we did do. The things that we did together were done with passion and I loved being partners with them.
In the last year, there was an absolute spiral from the Chairman, Cees Wessels, leaving early in the year, to Jonas leaving later in the year, to the international offices being closed. The creative heart and soul of the label, Monte Conner, was asked to leave. The A&R staff was dismantled. There is still a core team that exists with Atlantic Records, but it was very depressing to see what had been a very powerful kick ass rock and roll company dismantled piece by piece.
I have never understood why major labels spend all this money acquiring companies only to dismantle them and not stand by them. If a company is attractive enough to invest tens of millions of dollars in, then there needs to be patience and understanding. You need to allow them creative autonomy because what they did on their own, creatively, is what attracted them to invest in them in the first place.
When I look back on the Roadrunner years there were a lot of fun times. We made a lot of great records. Rush had a tremendously successful record. I continued my work with Lynyrd Skynyrd and things were great there. There were things that didn’t work out, but sometimes that happens. It was a good experience.
Jeb: You sound very excited with your new deal with Red.
Tom: One reason I am so excited about this new venture is that I am working with a guy named Bob Morelli, who is the head of Red Distribution. Bob was the head of distributed labels with BMG when CMC went there and did our joint venture. I worked with him day-to-day from 1996 to 2000. He was both my mentor and my partner and it was great.
From 2000 to 2006, when I ran Sanctuary, Bob was the head of distributed labels with BMG and then they merged with Sony. He was the guy, once again, that I worked with day-to-day and built all of our strategies with. I had very successful and enjoyable years working with Bob Morelli. Now, I have circled back and am working with Bob again.
When I walked into his office in New York the first thing I saw on his wall was a picture of him, me, my head of sales at the time and Joe Cocker. I remember it as if it was yesterday. We did Behind the Music with VH1 and Joe Cocker. Joe and I went to the Santa Monica Pier with the VH1 crew. The limo was full of smoke—I can’t imagine what that was from. We shot the show on the Sunset Strip that night; I believe it was at the Roxy. We filmed CNN Entertainment News and Joe performed and Bob was there for that. We hung out and we took pictures and that picture was the first thing I saw when I walked into his office. I was like, “How great is the Karma today?”
I went out to dinner with Bob, Alan Becker and Wendy Washington of RED and by the end of dinner we had crafted the whole deal. The attorneys needed time to write it up on a piece of paper, but Bob and I figured out how this would work over one dinner. When things are meant to be they fall together quickly and there is no big hassle. That is what it was like in the beginning with CMC, everything felt right and this is how this deal came together. I feel this was meant to be. Bob gets it and he totally respects what I do and he respects the artists and he knows what they mean to the fans.
The last person I spoke to in a high level capacity from Warner Music Group with Atlantic Records, when the whole Roadrunner thing was coming apart, told me that they were going to focus their business on high risk/high return artists. He told me that the artists I work with do not give them enough of a return on their investment. It was not a comfortable situation and I was glad to move on anyway because the option that they had was not picked up. The main reason they did not pick up the option was that they didn’t see the value of the veteran artists that are my life; they are the soul of my business. They didn’t respect that from a business standpoint. If I was not already heading out the door then that would have made me go. I’ve been able to have a very enjoyable twenty years working with the best artists on the planet.
Jeb: What will Loud and Proud do for these artists that others do not do?
Tom: I am breaking the mold that other people have been hanging onto. What I am going to be doing with artists, both big and small, I don’t care if they sell twenty million records or they sell twenty records—well, I won’t work with someone who only sells twenty records, as I have to draw the line somewhere [laughter].
What I am telling you is that I am creating an environment of truly transparent partnerships. There will be a basic structure between Loud and Proud and the artists who sign to Loud and Proud. It will be a true 50/50 profit share arrangement between Loud and Proud and the artists. There will be no royalty deals; instead there will be a 50/50 split on the profits.
I have done other profit share deals with other labels. They always take a percentage off the top for administration fees. That is nothing more than a contribution out of proceeds that goes into the label’s pocket to pay for company overhead. I think that is bullshit. I think a record company has expenses they need to pay to operate and an artist has expenses on his side that are his costs to live and operate. There will be no administration fee; there will be nothing off the top.
The second thing that major labels do is to put a surcharge on all fees. If the label is paying a third party a percentage for their distribution fee, typically, the label will add a cushion on top of that as a surcharge. They justify it because they are administering the service of distribution. It is part of the labels job to do this; it is part of the reason the label is there. I consider that a part of my job so I have kicked out the surcharge.
What is taken out as an expense is a distribution fee. The fee charged to the artist will be exactly, to the penny, what Red Distribution charges as a fee, there will be no surcharge on top of that. It will be the same thing with manufacturing costs and other services. We will have no surcharges on those costs, either. These are ways that labels keep a 50/50 deal from really being 50/50.
Every cost that is incurred in the campaign and in the life of that record will be that exact expense. It will all be a pass through and it will all be transparent. The artist’s accountant will see the manufacturing pass through charge. They will see the statement from the distributor that will show the fee. The deduction from these costs will be exactly what they are, without any fees, or surcharges. It will be a true transparent 50/50 profit share arrangement with the artists.
I am plugging in with a great company in Red Distribution that can provide all of the services that I need. I don’t need to pad and cushion things. That is not the way business needs to be done and now that I am calling all of the shots, I am not going to be doing business that way.
(L-R): Bob Morelli (RED, President), Tom Lipsky (Loud & Proud Records, Owner/President),
Amy Lipsky ('stache lifestyle rep/country; Greenville, NC), Alan Becker (RED, SVP Product Development)
Jeb: This is really a groundbreaking new way of running a label.
Tom: There is one other thing, and it is the big one. I am going to be offering a deal where the artist can own their masters. I am not going to take ownership from any artist out there. I’ve never been able to do that. I’ve made an occasional long term license deal where they might as well own it because they have it tied up for so long, but I’ve never done this. The artists will have the ability to own what they create and not sign it over to the record company.
The only time ownership will be in question is when investment is to a level to create product to where there has to be something else—that will be the exception rather than the rule. What I want to do is create a situation where the artist can own all of their recordings and are true 50/50 partners.
Jeb: They are getting a fair shake and they are getting product that they can use to keep them on the road touring.
Tom: What I’ve decided to do is to take a service approach. A band’s manager owns nothing. He provides services to the artist for a percentage of the proceeds that they generate. They don’t own the artist. They don’t own their touring and they don’t own their recordings or their publishing. A manager, basically, is a service function just as a publicist, or an attorney, is a service function.
A tour agent generates more money for an artist than anyone else. They don’t own anything. What they own is a percentage of the revenue that their service helps generate. I am approaching a record company the same way. I am building my business as a service. Loud and Proud will be a service provider to the artist to help them distribute, market and exploit their recordings to build and freshen their audience in return for a percentage of the profit that these services generate.
No one is approaching this as a service function. They approach it as an ownership bank that takes things from artists and buys things from artists and gives them a small percentage when things are distributed. I am doing it a different way. I want artists to bring their recordings to us because this label will help their recording career and their overall career. It benefits their touring and their fan club sales. It makes it all exciting again. I believe it all starts and ends with the artists and the music they create. The music they create should be theirs.
Jeb: This set up could be for other genres besides classic rock.
Tom: In past partnerships with other companies, I could look at an artist and, if everybody got excited about it, then I could do a deal. If that artist had live recordings that would sell ten percent of a studio record, then the label was not too excited about doing that. If they shot a DVD, then not every record company was excited about putting it out, because it is much smaller business than doing a studio album. God forbid the singer, or the guitar player, wanted to a solo album, an instrumental album or a collaboration with another artist. Even if it was a credible labor of love they wanted to do, it never worked out. They would try to push them to use another label to do that.
If a band does a new studio album, then it fits in my new structure. If they want to put out a live album, or they want to do an entire series of live albums to commemorate their tour, then this deal works on that as well. We both work and make a percentage of what we make. If it makes no money, then they make no money, and I make no money. If it makes a million dollars, then we each make half of it. If the guitar player wants to do an instrumental album, or the singer wants to do a solo album, then this deal can work there too.
It does not matter if it is a big project, or a small one. It does not matter if it is the whole band, or a solo deal; it is all one structure. You don’t have to do 27 different deals and you don’t have to insult this guy because he got a worse royalty rate than someone else. It is an equal share for everyone. It works for the veteran rock artist, who will always be the heart of what I do. It also works for more hardcore metal artists, new artists, or veteran country artists. You will hear me doing things in that world. I wanted a model that works everywhere. There are a lot of veteran country artists that need to be shown the same respect that I’ve shown the veteran rock artists for the last twenty years. I can do this in the veteran R&B world. I am pursing opportunities by artist.
Jeb: Everyone says classic artists don’t sell well. How are you going to get the records out there?
Tom: I’ve never had a problem getting product made available. Wal-Mart and Best Buy have been tremendous retail partners with me in the past. Lynyrd Skynyrd, 70% of their sales came from Wal-Mart. Rush, the biggest account they had at Roadrunner was Best Buy. I have never had problems getting retail to work with me. iTunes is always there, but the higher percentage of downloads are newer artists. That is starting to change.
There is a direct relationship between the units that you sell and the dollars that you can invest. If you are selling a million units, then you have a certain amount of money that you can invest to promote that release. If you sell 100,000 records, then the money that you can dedicate marketing that record is a smaller amount. The level of the campaign is something that is dictated by the commercial size of the project.
We will sit down with management and decide together how many records we can sell and we will set the budgets from there. We will set up a jointly approved budgeting plan. There won’t be any arguing after the fact because we will decide what we are going to do before we ever ship a record.
Too often labels hype the crap out of artists to get them to sign on the dotted line. Once they sign, then the typical situation is that the label makes a lot more money than the artist does. That is a fight that has been going on since the beginning of time. We are eliminating the argument because we are making the deals very fair and no one has any more of an advantage than the other.
Jeb: How long until we see new releases from Loud and Proud?
Tom: I am in discussions with several people I have worked with in the past, but under this new framework. What I hope, and what my plan is, is to, within the next month or so, start making announcements for releases that will be put out by Loud and Proud and our partner Red Distribution. I hope the first releases will land early summer.
A lot of the artists that I work with, the heart of their financial year is the summer and early fall touring. My guys work in the sheds. The biggest chunk of their year is that time frame, so they would like to have product out during that time.
I am plugged in and ready to go, as is Bob. Bob has been with me and Lynyrd Skynyrd at Muscle Shoals Studio when we shot the video with Ronnie’s [Van Zant] ghost on “Traveling Man.” Bob was there eating ribs and fried chicken and drinking tea out of jugs. He has been with me in the trenches since the beginning. It is going to be a piece of cake for us to ramp this up and kick it off again.
Jeb: I want people to understand who you are. You need to make a living with music but you are very passionate about this as well.
Tom: This is the music that I grew up with. These are the artists that got me into the music business. I am the luckiest son of a bitch in the world to be able to work with them and to hang out with them and the result has been a number of great friendships. Let me give you one example, it is a group that I have been involved with for over 15 years and they are NOT just “clients”, they are friends and partners. I am talking about Lynyrd Skynyrd.
My wife and I celebrated our 25th wedding anniversary last August. Instead of spending it in some fancy resort, or in some glitzy town, we flew to Jacksonville, Florida and we spent our anniversary in Wal-mart with Lynyrd Skynyrd when they released their new album.
We sat there with them while they signed stuff for 2000 fans that showed up that night. We went to dinner with the band, afterwards. We hung out with Johnny Van Zant’s wife and kids and we stayed in the same hotel with the band. The next day we rode in their tour bus to Columbia, South Carolina to go to Fort Jackson.
I am around this because I enjoy being around it. I love the people, I love the artists and I love the fans. When you look at my iTunes playlist it is all stuff that I’ve been involved with. I am looking at my walls while I am talking to you and there are Gold and Platinum records and DVDs and signed guitars and signed commemorative posters the guys have signed for me. I have a drumhead that Ringo gave me. This is my world. This is how I support my family.
I think that the generation of artists that I’ve had the pleasure to work with have produced the most timeless and quality music of any generation. Every generation grabs the spotlight. In addition to that first spotlight, there is a second and a third spotlight. These artists may not sell as many records as they did at the peak of their careers, but when you add up the tickets that they sell, the T-shirts that they sell and the VIP fan club memberships that they sell, then their business has never been healthier.
Recording is an essential part because it keeps fans engaged, but it is not as big a part of the artist’s world, commercially, as it was in the past. The total dollars that fans spend on these artists go to different places now. More dollars go into tickets, merchandise and memorabilia than in past years. I am okay with that. The key, for a business, is to tool your business model to work within the commercial size of the enterprise that you’re involved in.
I remember telling one artist that I would make records with him until we were both unable to do it. It was Lemmy from Motorhead. I told him that he had such credibility and that he is so important to the genre that they helped create that I would be there putting out records for as long as he needed me. I believe that Lemmy should always be on a professional label that would put his records out in a professional manner, with a professional marketing campaign and treat him with the respect he deserves.
I approach everything that I do that way. Some things are bigger and more profitable while others are smaller but artistically credible. I like them both and I treat them both with the same level of respect.
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