Temperature’s Rising at Mercury Records

Two years ago, Mercury Records was looked upon in music industry circles as little more than a rest home for over-the-hill pop stars.

It wasn’t just rock critics and rivals who poked fun at the languishing New York-based label’s management, which gave the world such acts as Bon Jovi, Billy Ray Cyrus and Kiss. Artists once signed to the company, such as Michelle Shocked, occasionally ranted on stage and in song about how their artistic integrity was “Mercury-poisoned” during their tenure at the PolyGram-owned label.

So the condition of the label today is something of a surprise. Under Danny Goldberg, who took charge at Mercury in 1995, the company is considered one of the hottest in the business.

With four albums in the top 40 this week and nearly a dozen more scattered across the nation’s pop charts, Mercury now boasts an eclectic roster that includes such rising stars as pop trio Hanson, rock act 311, ska octet Mighty Mighty BossTones, country singer John Anderson, rapper Foxy Brown and the hip-hop soundtrack from the film “How to Be a Player.”

Mercury, whose domestic market share has nearly tripled, from about 1.6% to 4.5%, on Goldberg’s watch, delivered more than twice as many hits this month as Island, A&M;, Motown or any other label in the PolyGram music division.

Goldberg will be rewarded today with a promotion from president to chairman of Mercury Group, which includes the New York label and its Nashville division, as well as PolyGram-affiliated labels Capricorn and Def Jam. In addition, PolyGram will shift its troubled Motown division this week under Goldberg’s Mercury umbrella.

“The driving engine of Mercury’s success is our new A&R; team--it’s amazing,” Goldberg said in a phone interview from New York on Monday. “Breaking new acts is crucial in this business, and our team has been fortunate to break quite a few over the past two years.”

*

Goldberg is one of a handful of top executives fired or cut loose since 1994 by Time Warner--including Universal Music Group chief Doug Morris and Interscope Records’ Jimmy Iovine--who have gone on to greater success at competing companies.

After Goldberg was dismissed from Warner Bros. Records in August 1995, there were doubts about whether he could run a label without the aid of his mentor, Morris. Turning down a series of multimillion-dollar offers to launch his own label, Goldberg quietly resurfaced three months later at Mercury--a company with virtually no credibility in the pop world.

During his first six months on the job, Goldberg lucked into a pair of smash debut albums by newcomers Joan Osborne and Shania Twain, both signed under a previous regime. Capitalizing on the strong sales of those hits, Goldberg beefed up Mercury’s market share by cutting deals with the Capricorn and Def Jam labels, which immediately delivered hits from Cake, 311 and rapper Foxy Brown.

Most importantly, Goldberg put Mercury on the map as a contender in the signing wars for cutting-edge rock and pop acts. While competitors criticize him for spending too much money and signing too many acts, Goldberg and his new team of talent agents, including former Atlantic employee Steve Greenberg, quickly scored a breakthrough this spring with chart-topping teeny-boppers Hanson.

Goldberg, 47, got his start in the music business as a clerk in the chart department of Billboard magazine nearly three decades ago. During the early 1970s, he worked as a freelance journalist for such publications as Rolling Stone and the Village Voice before taking a job as a publicist for rock group Led Zeppelin.

After working a stint as vice president of Led Zeppelin’s Swan Song label, Goldberg launched Modern Records, which scored a No. 1 album with Stevie Nicks’ first solo album before he sold the company. In the early 1980s, he opened a management firm called Gold Mountain, which ended up handling such powerhouse acts as Bonnie Raitt and Nirvana.

Goldberg later founded the unsuccessful Gold Castle record label, whose roster included such folk acts as Joan Baez and Peter, Paul and Mary. It folded before former Atlantic Records co-Chairman Morris asked him to join the Warner Music label in 1992 as senior vice president. Such acts as Hootie & the Blowfish, Stone Temple Pilots and Jewel were signed to Atlantic while Goldberg was running the label’s West Coast talent division.

Goldberg quickly worked his way up through the corporate structure at Time Warner’s music division, jumping to chairman of Warner Bros. Records. After Morris was fired, however, it wasn’t long before Goldberg--and nearly a dozen other executives on Morris’ team--also got the ax. In a company of nasty infighters, Goldberg was regarded as one of the toughest.

“Looking back on it now, all that infighting and jockeying for position and corporate intrigue was so destructive,” he said. “Not just because we all got fired either. Look what it did to the company. I’m proud of the work I did as a record executive there, but I still look back on what happened in the end with a certain confusion. If I had to do it all over again, I would have been a lot more quiet.”

Goldberg, an ACLU-card-carrying Democrat, is widely regarded in the creative community as one of the more intelligent and artist-friendly executives in the business. At the same time, rivals say he is adept at manipulating the corporate levers and knows how to get his way within PolyGram.

Probably the biggest criticism about Goldberg--voiced even by some of his fans--is that he is a publicity hound.

“I’m aware that this perception of me exists out there,” Goldberg said. “I’m the only record company chairman who began as a publicist. And when I was first starting out, I was very anxious to get noticed. That was certainly part of my strategy at one time. I’ve been associated with a lot of great people--a lot of headlines--and some of it rubbed off on me. Sometimes the publicity was good, sometimes it wasn’t. But it’s been a long time since I’ve made any conscious effort to increase my own visibility.”

Mercury is the brightest spot in PolyGram’s musical empire, which includes such labels as A&M;, Island, Motown, Def Jam, Deutsche Grammophone, Philips Classics, Polydor and Verve.

PolyGram, a subsidiary of Holland’s Philips Electronics, is the leading record company in the world but controlled only about 13% of the $12-billion U.S. market throughout the 1990s. So far this year, PolyGram ranks last in current U.S. market share among the nation’s six top entertainment conglomerates. When catalog is included, PolyGram places third in U.S. market share, according to SoundScan, the New York music industry research firm.

*

Goldberg, who sources say recently struck two new label deals with hot rap producer Timbaland and R&B; whiz Michael Bivens’ Biv 10 company, says he hopes to have a new president installed at Motown before Christmas. Before year’s end, Mercury will unleash a slew of albums from such stars as Brian McKnight, Twain, the Refreshments and Def Jam’s LL Cool J.

“I couldn’t have landed at a better place,” Goldberg said. “This corporation is run by two music guys who have previous hands-on experience in running record labels: Alain Levy and Roger Ames. They understand the ups and downs of the business. Think about it. It wasn’t that long ago that PolyGram was just looked upon as a nice little classical company. Now it’s considered a true major--one of the Big Six. I think we’ve got a great future ahead of us.”