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The real story behind Disney's dissolution of a local label.

The last days of Mammoth 

On June 30, the doors will close for the last time at Mammoth Records' headquarters in the old Broad Street coffee building in Carrboro. The brick building, with its tastefully exposed wood interior beams, had been remodeled to accommodate an up-and-coming major record label. Across the street over Acme restaurant, more employees resided in similarly refurbished offices. Now, with a skeleton staff of seven, the upscale furnishings seem to mock the very company that put them there. The gold records (SNZ, Seven Mary Three and Frente) are largely boxed away, saved by employees as souvenirs of a former career. For the remaining staff, the mood is somber: The air conditioning is off, and although Mammoth artists Fu Manchu and Frankie Machine have releases out, there isn't much employees can do but wait for their own severance checks from Disney. How did the homegrown company grow into a hit machine, only to be absorbed by a corporate giant? And--given the current state of the music business, where corporate mergers regularly devour the competition--was there any other way it really could have gone?

In the dog-eat-dog entertainment business, the career life span of a record company employee (per company) is usually somewhere between a fruit fly and a hamster: Firings, power shifts, egos and economics make it a hazardous vocation. While Mammoth was sometimes seen as a "woolly bully" by bands--who, in order to release a record, rarely saw any money up front and signed multialbum deals giving up their publishing for peanuts--Mammoth was, undeniably, a successful business. It was also an anomaly: a company that stayed small-town even as it grew, the kind of company where people lunched together, vacationed together and attended each others' weddings ... a family of sorts. That all ended in '97 when owner Jay Faires (a New York city resident since '95) sold 100 percent of Mammoth to Disney.

Duke MBA grad Faires and partner Ed Morgan (Morgan soon left, retaining Black Park Mgmt. and The Connells) started the tiny company in '88, relying heavily on interns culled from local universities. Mammoth was an oddity in the shark-infested waters of the music industry. They operated in a small town. People kept their jobs for years. Faires made some shrewd moves early on: His first coup ('89) was signing the Arizona-based band Sidewinders for a purported $3,000, then unloading them three weeks later for a reported $100,000 to RCA Records.

Mammoth's earliest success as an independent came with Juliana Hatfield's (Blake Babies) Hey Babe, which sold an impressive 70,000 albums and attracted the attention of majors. Mammoth entered into a joint venture with Atlantic Records in '92. (Atlantic did many such deals--Matador signed on later.) By '95, Faires was Atlantic's vice president of A&R. Using Atlantic's radio team and corporate strength, Frente and Seven Mary Three ("Cumbersome") were bona fide radio hits, with Seven Mary Three going platinum. Suddenly Hatfield was on the cover of Spin. MTV played Mammoth's videos. The label had a national profile and a growing relationship with press and radio as well as the corporate muscle (through Atlantic) to take acts "to the next level." (In the music biz, it's always about "takin' it to the next level.")

By early '97, allegedly frustrated with his inability to get Atlantic to work Mammoth releases, Faires resigned from Atlantic. If two "similar" (read: same demographic or genre) artists were released by Atlantic and Mammoth, Atlantic's always took priority (a Joe Henry record would be subordinate to Duncan Sheik, Juliana Hatfield to Jewel). Faires negotiated to buy back Mammoth and was free within six months. In the wake of the Squirrel Nut Zippers phenomenon, nearly every major expressed an interest in working with Mammoth. While A&M was a strong contender, the possibilities of working with a multimedia giant like Disney (which owns ABC, ESPN, Touchstone, Miramax and scores of other entertainment entities) were not lost on Mammoth higher-ups, and Faires made no bones about his interest in getting into film. While the 100 percent ownership deal was scarier than a joint venture, it was a chance to roll in the crap game of a lifetime: an opportunity to get off the porch and run with the big dogs, so to speak. The key word was "synergy," a cooperative environment where Disney artists would provide music for Disney films and television networks. But synergy is what didn't happen.

Disney heavy Joe Roth was Faires' initial contact. As chairman of Walt Disney Studios, Roth had always wanted to start a label and moved to bring Mammoth and Faires to Disney. Several insiders confirm that Faires was led to believe that Mammoth would be the priority company, as Disney's Hollywood Records had steadily lost money. (Even Fastball, Hollywood's "breakthrough" band, failed to recoup because the label spent so much money trying to break the record.) Faires was also keen to get into urban music and rap.

In a Disney power shift, however, Roth faded from the picture, ultimately leaving this past December. (Few Mammoth employees remember him being referred to at all after the deal was inked.) With Roth out and Mammoth his pet project, the promised cooperation within the Disney Group failed to materialize: no choice soundtrack offers from Touchstone or Miramax, no ABC sitcom theme songs. "I think his (Roth's) leaving soured the whole deal," explained former Mammoth Marketing Vice President Josh Wittman. "It's sort of like [being an artist] and having your A&R guy leave," said Lane Wurster, Mammoth's vice president creative director. And once your A&R guy leaves, you've got no friends.

In '98, Disney CEO Michael Eisner brought in legendary manager Bob Cavallo (Alannis Morrisette, Third Rail Mgmt.) to head the newly-created Buena Vista Group: an umbrella that included Hollywood, Mammoth, Lyric Street and Disney Music (soundtracks and the like). Cavallo hired industry veteran David Burman as president of the newly prioritized Hollywood. For the 60-ish Cavallo and Burman, old-school music biz guys who'd come up through the ranks, Mammoth hardly made a blip on their radar. At this point, Cavallo nixed any urban music acquisitions, a stunning blow for the top Mammoth folks.

As early as last October, Billboard reported that Faires and Mammoth's CFO Chris Sawin had met with Cavallo to buy back the company. Cavallo issued a statement to the effect that Disney would work with Faires to make the deal happen. It was no secret to Mammoth insiders that Faires had gone into the Disney deal with the intention of beefing up Mammoth's stock in the urban music market. According to Wittman, Faires had a deal in the works with rap label Cash Money that was squelched by Disney. (A year later, the incredibly successful Cash Money was bought by Universal for $30 million.) "Jay could have been the golden boy," Wittman exclaimed. "It would have been the cash infusion the label needed." Had the mouse turned into a rat?

The mood had already changed at Mammoth. Having "ramped up" to a high of 54 employees after the Disney deal, with satellite offices in Los Angeles and New York, friction grew between the original staff and the new hires. Mammoth, a homegrown company, was now forced to hire career radio promoters and industry people to work "hit"-oriented projects, often at salaries far exceeding those of longtime employees who'd grown with the company. For example, DGC heavy Ted Volk, who "broke" Nirvana, came on board as a radio person and managed to turn off everybody who dealt with him; he also failed to break any records. "When we signed the deal with Disney, we started hiring like crazy, and you're not hiring people that are necessarily concerned with the overall success of the label," Wittman explained. "You're hiring staff."

Meanwhile, all was not well with Mammoth's flagship band, the Squirrel Nut Zippers. Initially signed for a pittance, SNZ were a rag-tag collection of local musicians who instantly struck a chord with listeners. With the NPR-fueled success of The Inevitable Squirrel Nut Zippers, the Mammoth staff (at that time 20-odd employees, two radio people and a few indie radio promoters) broke SNZ's "Hell" single. But the calypso hit, which coincided with the swing craze, caused the band more internal conflicts and growing pains than they could handle. They passed on lucrative offers (Wrigley's Gum, for one), got sued by Squirrel Nut Zippers candy company, refused to share a stage with Big Bad Voodoo Daddy at a Boston radio fest (resulting in their single being pulled from rotation), and lost and fired members. "This was a band that was successful in spite of themselves," Wittman said wryly.

After the 1.2 million sales of HOT, SNZ renegotiated their Mammoth recording contract. The massive success of HOT--as well as the Disney takeover--put pressure on the band to deliver. But even with the Disney machine, and an almost doubled Mammoth staff behind it, Perennial Favorites scanned less than half of its predecessor. "Boo hoo, we only sold 600,000 copies," former Zipper Tom Maxwell said with a laugh. "But that's the mindset," he added.

Factions emerged within the band. Although Maxwell now has praise for Mammoth, he then had a knack for biting the hand that fed him, being vocally anti-Disney and sometimes anti-Mammoth in interviews. There was the to-this-day unedited "Under the Sea" Little Mermaid video, scripted by Maxwell to go along with the Zippers' version of the song. Before entering the studio, the band insisted on a contract between themselves and Mammoth restricting Disney's use of their image and likenesses. According to Maxwell, Disney "hit the roof" when they heard about the contract ("Disney doesn't do those kinds of deals," he explained). The official take is that the SNZ's version of "Under the Sea" was rejected as "too rough." (Not cartoony enough, perhaps?) But the video--a transparent stab at Disney (the hungry band catches a cute little fishy that grows into a fearsome dragon that swallows them whole)--could hardly have been what Disney had in mind.

While Mammoth had expected five years to grow and develop a roster of artists, its employees' frustration mounted at having to produce a hit. (The label had worked for a full year to break the United Kingdom's Freestylers, which finally sold 100,000 units.) "Everybody realized that we weren't making money," recalled Product Manager Betsy Wonnell. (She joined the company as an intern seven years ago.) "We had this huge staff and we didn't have any records selling, and when you're not selling records, you know it's just a matter of time before something happens."

Formerly a development label, Mammoth now had to concern itself with budget reports and radio play. Faires, who at the time seemed more interested in making celebrity connections than the day-to-day workings of his label (he left that to senior Vice President/General Manager Steve Balcom), was neither in Los Angeles with Disney, nor in Carrboro with Mammoth. (By all accounts, he hadn't visited the Carrboro offices since Mammoth's 10-year reunion in Oct '98). "Jay runs with jetsetters like Natalie Portman," said one employee, who recalled one of Faires' New York parties, set up by rising young actress Bijou Phillips. "He was entranced by those people."

"I think people realized that Mammoth was never like a 'holier-than-thou' indie rock label. It was a business," says Wurster, who started freelancing for Faires in '89. (Wurster remembers Faires tearing his paychecks so they couldn't run through the automatic processor at the bank, thus buying the fledgling label's account another day or two.) While local hipsters jeered at Mammoth's recent less-than-cutting-edge radio-friendly signings, their employees uncomfortably straddled two worlds. As that chasm grew, the desperation to produce hits grew along with it. Instead of signing bands they liked, Mammoth's honchos felt compelled to sign bands that sounded like they should be on the radio (bands they would never listen to at home). Any "hip" factor acquired over the years--through artists like Joe Henry, Victoria Williams and the Zippers--took a beating as the company pushed to break G105-friendly acts like My Friend Steve and Far Too Jones.

But by Jan. 5, 2000, when Faires got his Disney pink slip, employees saw the writing on the wall. While rumors swirled like water down a storm drain, employees--most of whom had never interacted with a single Disney rep--waited to discover their fates. Ironically, almost a year earlier, "Black Thursday" (Jan. 21, '99) saw the largest mass firings of music industry employees to date as a result of corporate "restructuring"--fallout from the '98 deal where Seagram's Universal Group absorbed PolyGram (A&M, Motown, Mercury and Island) and Geffen. At labels worldwide, industry workers felt the pinch as their companies were downsized or eliminated. Here in the Triangle, many Mammoth employees decided to ride the journey to the end, hoping that Faires could pull the finances together to buy back Mammoth and save their jobs.

The end was brutally quick. Hollywood Records A&R guy Rob Seidenberg came out to Carrboro this February, met (in groups) with the employees and basically said, according to Wittman, "Here's how much. Here's your last day. Here's the deal." Some employees got two weeks' notice; some were kept on for the interim period until the "new" New York office is up and running. There was no assessment of personnel: no job reviews, nothing. "It was very cold, very by-the-numbers," recalled Wittman. Long-time employees were offered good severance packages ("keep quiet money" Wittman joked ruefully). Some employees cried. Later, some went to local watering hole Tyler's to drink and mourn.

Wonnell remembered the scene where Seidenberg addressed the Carrboro staff. "Rob sat down and couldn't look at anybody. He said, 'This is my future and these are my goals.' And we were all thinking, 'Why are you telling us this?' He then said, 'I want to stay true to all the work you all put into it.' And Kerry Fitzgerald (web design) got choked up and said, 'How can you honestly say it's going to be the same?', at which point Seidenberg sort of waffled and said, 'It wasn't my decision to do this.'" At that point, according to Wonnell, Balcom told Seidenberg--in front of the assembled staff--that Seidenberg was passing the buck.

Why Disney opted to keep the Mammoth name seems enigmatic (and a slight to the people who made the company what it is). The only acts being kept are the Zippers, Fu Manchu, Freestylers and Joe Henry. Seidenberg has new signings John Wesley Harding and A slated to release records in 2000; look for a new Zippers album in October. The Backsliders, Tyfu, My Friend Steve, Dirty Dozen Brass Band and others were let go, with Mammoth's other signings either in litigation and/or negotiation. At this point, only two Mammoth employees--Head of Publicity Keith Hagan and Product Manager Billy Maupin--have accepted offers to stay with the company. Faires will no doubt get a fat settlement, since Disney canned him with two plus years of his contract left. In big business, the top dogs seem to fail upwardly. And--as those close to Faires have said--"Jay loves music, but Jay loves business even more." The fallout will take years to resolve and, as usual, the bands will suffer the hardest.

"It's sad that something that was built from the ground up--and worked--was absorbed and annihilated," says Maxwell. "But it's tragically symptomatic of what the entire business is right now: increased hegemony, decreased diversity and almost the complete death of the indie. It's so sewn up and shitty now that I'm positive things are going to change," Maxwell asserts. "And I myself am working towards that change, if nothing else than by dropping out of the (corporate) machine and not participating in it anymore."

At this time, there are only four major record labels. For these monoliths, there are no John Hammonds or Clive Davises to sign and develop acts. Now, artists/bands on majors are dropped if they don't move 250,000 units. With the industry climate as it is, for Mammoth to grow and flourish for 12 years is a accomplishment in itself.

Having a national recording company in the area was something locals took for granted. (Damn, I was thrilled to shake funk pioneer and Mothership pilot George Clinton's hand at the 10-year anniversary party!) Now, after 12 years of power dinners, yearly Christmas parties, bi-weekly employee basketball games and the like, Mammoth is gone. Many employees have already landed good jobs (Astralworks, Bill Graham Mgmt. and Sub Pop to name a few), so the Mammoth presence will be felt for years to come. Still, having Mammoth on the scene added a little color (and a lot of cash) to this somewhat crunchy, politically correct little college town, as well as giving a home to artists who could express themselves musically without having to compete with, say, the latest Jive Records release. Like Joni Mitchell sang, "You don't know what you've got 'til it's gone. EndBlock

  • The real story behind Disney's dissolution of a local label.

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