Few music moguls would relish the opportunity to lose their deal with a major label, but according to Tom Silverman – the irrepressible founder of Tommy Boy Records, which was shuttered by the Warner Music Group late last week – it’s really the best thing that could have happened to him.
“It’s become a Mariah Carey business,” Silverman says about an industry now dominated by multi-million-dollar artists’ contracts and exorbitant production costs. “You spend $10 million to sell 1 million records. It doesn’t make sense anymore.”
So Silverman will take Tommy Boy artists like Junior Vasquez (as well as some progressive hip-hoppers) over to a new, self-funded label named Tommy Boy Entertainment, which he describes as “a lean, hungry company that will be low-risk and high-reward.”
Nor does Silverman seem perturbed that Warner, which purchased a 50 percent interest in the label in 1985, is holding on to Tommy Boy’s established acts like De La Soul and Everlast, and bought its hit-rich back catalogue – which includes Afrika Bambaataa and Queen Latifah – for a song. According to Silverman, Warner paid less than $10 million for his share of the company (including the catalogue), which one prominent music-industry source dismisses as “bargain-basement pricing – the catalogue is worth $50 million to $60 million.” (A spokesperson for Warner Music Group declined to comment.) The same source compared Silverman’s sale of Tommy Boy to Warner to Berry Gordy’s sale of Motown to MCA in 1988 (and surely “Papa Was a Rolling Stone” is to the Motor City as “Planet Rock” is to the Big Apple).
With the new venture, Silverman will hark back to his more humbly budgeted indie days, when he started Tommy Boy with a $5,000 loan from his father and made hip-hop history. But he says the move makes more sense than ever in the current high-stakes music business. “The majors make records that cost $100,000 per track; we’ll make an entire record for $30,000,” Silverman says. “They ignore someone who sells 250,000 records. Beautiful! We’ll take ‘em and make a killing in the process!”
Some rival executives seem equally bullish about Silverman’s prospects. “Tom can be a lot more agile than the big record companies,” says former Atlantic Records president Danny Goldberg, who now runs an indie label called Artemis Records. Though others wonder if Silverman – known for delivering oddball lectures like “Tom Silverman’s Precepts to Live By” – may have run his course as a hit-maker. “While independent status is probably a good thing for Tom,” says a source close to Silverman, “I’m skeptical as to whether his vision will translate commercially.”
Still, the 47-year-old impresario remains defiant. “As long as you keep your head down,” he says, “the opportunities are going to be better than ever.