Behind The Crooning, Noisy Discord

Back - Index - Submissions - - What is RSS? Date: Oct 09, 2099 Source: The Wall Street Journal (Thursday October 7, 1999) Submitted By: Lynn Backstreet Boys and 'NSync Draw Record Companies Into Dizzying Dispute By Martin Press It's the battle of the boy bands. A simmering rivalry between 'NSync and Backstreet Boys, two hot-selling teen groups, has erupted into one of the music industry's biggest and most complex brawls. It involves two record companies and a pop-music impresario. And beneath the din of screaming teens, control of the two bands and millions of dollars in profits from their red-hot albums are up for grabs. Battling over the right to 'NSync are Bertelsmann AG's BMG Entertainment, the world's second-biggest record company, and Zomba Recording Corp., the biggest independent music company. Until now, the two have been tight. Bertelsmann owns 20% of Zomba, distributes its records in North America and counts on Zomba for nearly a third of BMG's market share of current albums. In the middle of it all is Louis J. Pearlman, chairman and chief executive of Trans Continental Records, Inc., the man who founded 'NSync and Backstreet Boys. At various times over the past 18 months, he has been locked in struggles with both bands over money issues. With Mr. Pearlman quarreling with 'NSync, BMG worried about that record deal, and the band's possible defection from its RCA label. So on a steamy weekday in mid-July, Strauss Zelnick, BMG's chief executive, spent several hours in a Times Square hotel room with the five members of 'NSync and Mr. Pearlman, trying to smooth over their financial differences. But a few weeks later, the band ended up signing a new recording deal with Jive, a Zomba Records label. The move of 'NSync to Jive has prompted the Backstreet Boys to try to terminate their own deal with the label, music industry executives say. The Backstreet Boys, who are known to regard 'NSync as a knockoff band, worry that Jive simply won't be able to provide the same attention and promotion it did before it added 'NSync, the executives said. Both quintets croon the same type of syrupy tunes that light up wide-eyed girls and CD sales. The Backstreet Boys' eponymous debut album has sold 8.6 million copies, and its scond album, Millennium has sold 6.2 million copies since May. 'NSync has sold nearly seven million of its first album, released last year, Soundscan estimates. As the fight escalates, the record companies both claim to have 'NSync currently signed. A spokeswoman for Zomba wouldn't comment on the dispute but said that 'NSync has indeed joined the Jive label, which will provide "priority treatment" for both groups. Jeff Kwatinetz, a co-manger of the Backstreet Boys, declined to comment. Meanwhile, Mr. Pearlman himself has issues to work out with 'NSync, much as he did with the Backstreet Boys. Last October, Mr. Pearlman's Trans Continental settled a lawsuit filed by the Backstreet Boys that claimed the company took too big a share of its revenue. As part of the settlement, however, Mr. Pearlman's company continues to earn a percentage of the band's revenue. The deal signed by Trans Continental with 'NSync gave the company a share of the band's recording, merchandising and music publishing revenues, as well as management commissions --totalling about two-thirds of the band's revenue, according to a person familiar with the situation. Trans Continental paid for the group's dance lessons and housing and even "gave them grocery money to live on," said Michael Friedman, Trans Continental's attorney, acknowleging that the company gets "reimbursement on their extraordinary expenses" in developing the group. Three months after the Backstreet Boys settled their lawsuit against Trans Continental, 'NSync members, who range in age from the late teens to the early 20s, hired a lawyer to look over their agreement with Trans Continental. Several months of negotiations followed with no resolution. Comment on this item. Next Item: Backstreet Boys upset fans? Prev Item: No Jive: The Battle of the Bands