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COVER STORY

The Wheeler-Dealer of Rock 'n' Roll

With Clients Such As Madonna, Bruce Springsteen, U2 and Puffy Combs, Attorney Allen Grubman is the Big Macher of the Music Business.

November 22, 1998|PATRICK GOLDSTEIN | Patrick Goldstein's last article for the magazine profiled four Hollywood movers and shakers

In 1995, Interscope Records, then part-owned by Time Warner, was embroiled in an ugly dispute with the entertainment conglomerate over the release of several controversial gangsta-rap albums. Interscope founders Ted Field and Jimmy Iovine felt that the company should either release the albums or release Interscope from its deal. But Michael Fuchs, who had recently taken over as Time Warner's music chief after years of running HBO, refused to compromise.

"It was a war," recalls Iovine. "It was very volatile."

Enter Allen Grubman, longtime lawyer for Iovine, David Geffen, Tommy Mottola and countless other music industry moguls. "He looked Fuchs in the eye," says Field, "and he said, 'I represent 48 of the top 50 people in the record business. You don't renege on a deal. You don't do business that way. This is too small a business to act that way.' And that was that--we got out."

There is no six degrees of separation in the music business, not when Grubman is in the room. When a multimillion-dollar acquisition or contract renegotiation makes headlines, the pudgy 55-year-old lawyer is there. His clients include Madonna, Bruce Springsteen, U2, John Mellencamp, Rod Stewart, Sean "Puffy" Combs, Luther Vandross and Andrew Lloyd Webber. He is the big macher of the music business, a consummate deal-maker whose fingerprints are all over many of the biggest industry transactions of the past decade. When longtime client David Geffen sold his record company to MCA (now Universal) in 1990 for $545 million in stock, Grubman did the deal, as he did when Geffen launched his DreamWorks record label five years later. When Time Warner unloaded Interscope, Grubman orchestrated that deal, too, as he did when MCA bought 50% of the company in 1996.

Sometimes the web of cozy connections seems awfully sticky. When Mellencamp asked then-PolyGram Music chief Alain Levy to let him out of his contract with Mercury Records last fall, Grubman jumped in, negotiating Mellencamp's release with Levy, a close friend, and Mercury chairman Danny Goldberg, another client.

Didn't it worry Mellencamp that he was represented by the same lawyer as the head of his label? "Hey, that's the whole point," he says. "He's everyone's lawyer. How do you think I got out?"

Grubman says, however, that his firm has never represented two different parties in the same transaction, and that clients are always informed about other clients he represents.

Grubman is the peacemaker, the mediator of the music business. Says Def-Jam Records co-founder Russell Simmons, a Grubman client for 15 years: "If you're Alain Levy or [former EMI chairman] Charles Koppelman or [Universal Music chairman] Doug Morris and you get fired, your first call is to Allen Grubman. He has an unprecedented position in the industry because so many people allow him into their confidence."

In the music business, warfare is not waged using Marquess of Queensberry rules. Grubman's arsenal of deal-making weaponry includes a steady stream of Yiddish epithets, under-the-table kicks and, when all else fails, loud protestations of guilt. "With Allen, negotiations are theater," says MCA Records president Jay Boberg, a longtime client whom Grubman affectionately calls "one of my goyim." "His favorite tactic is to say, really loudly: 'You guys are so crazy! You're killing me!' "

Like a Washington insider, Grubman's influence comes from being a shrewd judge of the true psychology of power--not just who wants a deal but why they want it. And all of that negotiating is done in his head. As one executive put it: "The only piece of paper I've seen him touch has been wrapped around something edible."

Grubman's firm occupies three floors of the fashionable Carnegie Hall Towers in New York City, but the voluble lawyer has none of the high-voltage gravitas of a legal lion; he's more like a counterman at the neighborhood deli. When gossiping or recounting an anecdote, he lowers his voice and tugs on your shirt-sleeve, eager to pull you closer into his world. Making calls from a suite at the Peninsula Hotel, where he stays on his frequent trips to Los Angeles, Grubman kicks off his loafers and stretches out on a couch. When the phone rings, he pads over to a desk, issuing directives to his staff as he idly plays with his room key and a wad of $50 bills.

That wad looks at home in his pocket. In the music business, artists make art; Grubman makes them money. At lunch one day, he points out a patron wearing a polo shirt adorned with a designer logo. "If I had a family crest," he says, "it would be an 'S' with two vertical lines." He explodes with laughter. "That's my crest--the dollar sign."

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