Sony Music chief Tommy Mottola quits. The label boss who made a star (and a wife) of Mariah Carey and an enemy of Michael Jackson will start his own imprint

By Gary Susman
Updated January 10, 2003 at 05:00 AM EST

Tommy Mottola, the Sony Music chief whose successes with stars like Mariah Carey and Jennifer Lopez have sometimes been overshadowed by personal events like his five-year marriage to Carey and last year’s feud with Michael Jackson, announced Thursday that he is stepping down from the music giant he’s run for more than a decade. The news comes at a time when the record industry, and Sony in particular, are in turmoil.

Mottola, 52, was a personal manager for acts like Hall & Oates, Carly Simon, and John Mellencamp before he joined the label in 1988, and he continued to serve as a starmaker even from the boardroom. He is generally credited with orchestrating the careers of Carey (who became a star under his watch in 1990 and who was his wife from 1993 to 1998), Celine Dion, Jennifer Lopez, and Ricky Martin, while orchestrating successful comebacks for label stalwarts like Bob Dylan and Bruce Springsteen.

His touch wasn’t always golden, however. Since he assumed the title of chief executive in 1998, Sony has slipped from second to third in market share among the big five labels (First-place Universal has some 30 percent of the U.S. market, about twice the size of Sony’s share). Despite current hit records by the Dixie Chicks and J. Lo, the label’s losses in 2002 have been reported at between $100 million and $130 million.

Plus, Mottola brought unwanted attention to the company, however inadvertently, through such events as his split from Carey (he’s now married to Mexican pop star Thalia). Carey eventually left the label but accused him of stealing her musical and stylistic ideas and giving them to his new diva, Lopez. The Dixie Chicks made public their accusation that Sony had cheated them out of royalties, though a threatened suit and countersuit were settled out of court. Most notoriously, there was Michael Jackson last summer calling Mottola a racist and a devil for allegedly underpromoting Jackson’s poor-selling ”Invincible,” even though Sony had spent a reported $30 million to promote the CD.

Mottola reportedly had two years to go on his contract, which paid him an estimated $10 million a year, but instead of staying on as chief executive, he’ll now be running his own imprint within Sony, one in which he hopes to combine talent management with recording deals, concert promotion, and online sales. ”I have been thinking about taking up this new challenge for about a year and really made the decision to go forward only recently,” he said in a statement.

The decision may not have been his to make, however. ”This is a total decision on my own,” he told the New York Post, saying he’d decided before Christmas to move on. But one Sony executive told the New York Times that the label wanted a chief who would trim expenses and not lavish so much money on a handful of artists. Another Sony source told Fox News that Mottola was forced out and didn’t learn his fate until yesterday. ”He was told to go see Sir Howard Stringer [chief executive of the Sony Corporation of America], and when he got there, they handed him a press release,” the source said.

Stringer spoke highly of Mottola to the Times, saying, ”Tommy has the ability to develop and nurture artists. When he entered the music industry, that’s what record companies did and he can do that better than anyone else.” In other words, that is not what record companies do anymore. Like Sony, the industry as a whole suffered a sales slump in 2002 for the second straight year. The pressure is on at all labels to cut costs, largely at the expense of artists. The names being mentioned as possible replacements for Mottola include former AOL chief operating officer Bob Pittman and former Warner Home Video president Warren Liberfarb — people from outside Sony and outside the record business who are more known for their financial acumen than their love of music. The labels are happy to let execs like Mottola or Clive Davis (who was pushed out of BMG but was also given his own imprint, J Records, where he then made a star of Alicia Keys) nurture artists on farm-team imprints, so long as they don’t spend the whole company into the ground in the process.