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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

Still, even Grubman's closest friends have voiced concern about his tight web of relationships. "I think it breeds conflict," says Alain Levy. "It's a disease of the entertainment business. I'd feel uncomfortable with a label president negotiating with an artist [when both] are represented by the same lawyer. But I can't tell my executives not to do it if everyone else does it."

If Grubman practiced law in the real world, he'd be judged by a different standard. If you were negotiating a new contract with your boss, you would be unhappy to learn that your lawyer also represented your boss--and perhaps his boss, too. But the music business, like Hollywood or Washington, D.C., is not the real world. It is a tiny, elite club with members who play by their own set of rules.

According to the New York State Bar Assn., which counts Grubman as a member, it is a violation of the organization's code of professional responsibility for a lawyer to represent two opposing parties in the same matter without the consent of both parties involved. Grubman insists he's never done that. He also says all his clients sign a conflict-of-interest waiver, which details any potential conflicts the firm might have.

The bottom line: In an insider's business, you want the ultimate insider. "Jimmy Iovine has this great expression--ducks need to be in business with ducks," says Charles Koppelman. "And Allen's a duck. If I want someone to negotiate a deal for me, I don't want to go to some white-shoe law firm. I want a duck."

Sure, some of Grubman's deals have been multimillion-dollar misfires. PolyGram's hiring of Andre Harrell to run Motown Records was a disaster, with Harrell being fired less than two years after he was paid a $20-million signing bonus. Grubman reportedly earned $1.5 million for negotiating Harrell's initial deal--and his exit package.

But Grubman's clients feel good even about their bad deals. "Allen wants everybody involved to make money and be happy," says Russell Simmons. "Then we'll pay him forever."


Seated at a corner table at the Universal commissary, Grubman has just made an important decision: He's having eggs, onions and lox for lunch. "Very, very well done," he instructs the waitress. Across the table is Koppelman, who has been negotiating with DreamWorks to launch a new music publishing company, with Grubman, of course, doing the deal.

In a playful mood, Grubman is formulating his philosophy of life, a declaration delivered with a Yiddish spritz. "Life," he says, "is 80% mazel and 20% brains. You can be the smartest guy in the world, but if you don't have any luck, you're screwed."

Grubman waves his fork in Koppelman's direction. "You agree with that?" Koppelman shakes his head. "I don't know about 80%."

Grubman's eyes sparkle. "So, it's 75%," he says gleefully. "Now we're negotiating."

When it comes to the art of the deal, Grubman has no rival. He has an intuitive sense, what the great Washington lawyer Edward Bennett Williams called a "gypsy's instinct" of how to reach a consensus. "Usually, successful businesspeople are tough and intimidating," says John Sykes. "But Allen disarms people. When we go into a negotiation, he always says: 'This could be tough or it could be enjoyable. Why not make it enjoyable?' "

For Grubman, dining out goes hand-in-hand with deal-making. Just under 5-foot-9, he weighs "about" 200 pounds, down from a post-divorce high of more than 250. "Call me chubby," he suggests. "I've got the fat gene. It's hard for me to keep the weight off." The Brooklyn Diner in Manhattan serves a dessert named after him, the Allen Grubman Double-Dark Chocolate Cream Pie.

At lunch at Ago on Melrose one day, he polishes off a monkfish with risotto, then orders a cherry and raspberry tart "for the table" but manages to eat most of it himself.

At meals, conversation returns to business. Lifestyle maven Martha Stewart says she met Grubman while he was preparing to renegotiate Madonna's contract with Time Warner subsidiary Warner Bros. Records. Hearing that Stewart had just done a deal with Time Warner, Grubman took her to dinner, quizzing her about her negotiations.

"I told him everything I knew," she recalls. "And of course he proceeded to make a deal for Madonna that was infinitely superior to my little deal."

"Allen is interested in everybody's business," says Mellencamp. "He doesn't know much about basketball, but if we go to a game, when the referee comes by, Allen will say, 'Hey, ref, how much money do you make?' "

Grubman is more circumspect about his own earnings, refusing to reveal his annual take. Industry insiders speculate that he makes anywhere from $6 to $10 million. He doesn't bill per hour, as is customary with most lawyers, preferring to take a piece of each transaction, depending on how well he does and how much time he puts in. He calls it "instinctual" billing.

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