Lunch with the FT

March 8, 2013 5:01 pm

Lunch with the FT: Lucian Grainge

With the £1.2bn takeover of EMI, a 52-year-old Londoner has emerged as ‘the music industry’s most powerful man’
Illustration by James Ferguson of Lucian Grainge©James Ferguson

It’s funny, this guy goes around the world doing interviews over lunch, right, and I’m the one who has to lose weight! You look like you’ve never had a hot lunch in your life.” Lucian Grainge is slightly overstating the glamour of my job, and I tell him Lunch with the FT is a rare chance for a journalist in 2013 to file a meaty expenses claim. “The FT are paying for this?” he replies. “Oh! I’ve got to do the classic rock’n’roll thing: not look at the menu, just order the most expensive thing.”

The 52-year-old chairman and chief executive of Universal Music Group, behind artists from Amy Winehouse to Justin Bieber, learnt rock’n’roll’s high running costs early in his career, when he took the Damned to lunch in Paris in the mid-1980s.

More

Lunch with the FT

“We’re on the Champs-Elysées and I was sitting there with Rat Scabies. We had a number one record at the time; they’d done a cover of ‘Eloise’ and we’re all sitting there, very grand, very grown-up, and he just opened up the menu and closed it.” Scabies, the band’s drummer, explained that whenever the record company was paying they would simply order the priciest food, Grainge recalls. “And the meal eventually comes and it’s inedible, of course, because he ordered everything that no one would normally ever eat.” Grainge lets out one of the long, unrestrained laughs that punctuate his conversation.

He is in a good mood. Universal artists and songwriters such as Frank Ocean and Mumford & Sons are in line for Grammy awards the weekend following our meeting, and, as Grainge knows but is not supposed to say, Billboard, the industry magazine, is about to crown him the most powerful person in the music business. The loose ends on the deal that won the Londoner that title – a £1.2bn swoop on EMI by Universal that required months of negotiations with regulators and rivals – were tied up hours before our meeting with the sale to Warner Music of Parlophone, the EMI label behind Coldplay and Sigur Rós that he was forced to divest to get the deal through. I cannot help but wonder if he engineered the announcement for Lunch with the FT’s benefit. “I’m good but I’m not that good,” he laughs. “Hopefully, it’s the end of a draining season, and we got a great price.”

Grainge suggested we meet at Geoffrey’s, an open-air spot on the Pacific Coast Highway in Malibu which in a former incarnation had been a venue called Holiday House and once hosted Frank Sinatra and Marilyn Monroe. The restaurant is a 25-minute drive from his house in Brentwood and Grainge, a car fanatic, says he comes here most Sundays to get coffee and listen to music in his yellow Porsche 933 Carrera.

“This beats the Wolseley, doesn’t it?” he says, referring to Piccadilly’s default breakfast spot that he left behind three years ago when he moved to California to take up his current post. Our table at Geoffrey’s overlooks an ocean that is living up to its Pacific billing. It seems churlish to complain but a layer of cloud hangs over the mirror-still sea and it is a little chilly for eating outside.

Grainge, in dark-brown sunglasses, a grey jacket and a striped purple shirt, runs me through the numbers on the EMI deal, where he expects disposals will recoup almost half his initial outlay. But his reference to the “draining season” is a reminder that the process that added The Beatles and Katy Perry to a roster ranging from U2 to Lady Gaga did not always look so smooth. Last June he sat uncomfortably in a suit and tie through a US Senate hearing into the deal at which Warner and other rivals attacked him as a monopolist. That summer, Vivendi, Universal’s French parent, also stepped in to take over the parallel negotiations with the European Commission, which had knocked back Grainge’s peace offering to independent labels. Sir George Martin, The Beatles’ producer, told a newspaper the EMI sale was “the worst thing that music has ever faced”.

“The industry needs transforming. It’s for others to decide whether they want to get stuck in the past or whether they want to come on the journey.”

- Lucian Grainge

“All this was a long time ago and I have a short memory,” he says firmly, tearing his bread roll into small pieces and rolling them between finger and thumb. “I’ve never looked back ... I’m interested in what I’m doing next.”

When Grainge finally bought EMI in September from Citigroup, the bank that had seized it from Guy Hands, he painted it as a chance to revive a neglected British icon while using his scale to lead his industry into a more confident accommodation with the digital forces shaping its future.

As a waitress brings iced water, I ask whether an industry known for grudges between ego-driven executives wants to be led by someone who controls 40 per cent of the charts. “The industry needs transforming,” he shrugs, stacking his pieces of bread. “It’s for others to decide whether they want to get stuck in the past or whether they want to come on the journey. I’m not interested in them. I’m interested in the industry as a whole.”

That industry needs, he says, a culture of “constructive collision” between musicians, content owners, distributors, entrepreneurs and investors. Such collisions have not always been constructive: indeed, since 1999, labels have sued Napster, questioned Apple’s dominance of downloads, fought YouTube over music played in users’ videos, and dragged their heels when licensing new digital services. Yet now, after the industry’s first year of modest growth since 1999, relations are thawing.

“We’ve learnt an awful lot,” Grainge says. “But it’s like being in a commercial earthquake and the reality is it takes time to get out from beneath the desk where you’re protecting yourself and move forward.”

The waitress comes to take our order. Grainge may be letting the FT pick up the bill but he has breached one other rule of Lunch with the FT – that it should be a one-on-one affair – and arrived with his spokesman. “What you going to have, Peter?” he asks. Peter is having eggs Benedict on a toasted croissant; Grainge chooses the same, asking whether the waitress recommends it with crab or prosciutto. “Crab? OK, I’ll have that. I’m going to have a tuna tartare and then I’ll have the Benedict. I’m going to have the lot.” I order mushroom soup followed by scallops, and ask whether Grainge wants a glass of something. He asks for a Diet Coke, explaining that he doesn’t like alcohol. “When I inherited the gene pool, it was, ‘Shall we give him chocolate or alcohol?’ I got the chocolate one.” He laughs loudly and the waitress disappears before I can ask for a glass of wine.

. . .

In the days before our meeting, Grainge had hosted an “innovation forum” in LA, bringing entrepreneurs from London together with Hollywood and Silicon Valley executives. Prime minister David Cameron, who made Grainge a business ambassador last year, joined via video link. The line-up displayed the breadth of Grainge’s contact list, ranging from Black Eyed Peas’ frontman Will.i.am to DreamWorks Animation’s Jeffrey Katzenberg, while Emeli Sandé, the British singer-songwriter who sang at the London Olympics, performed for 300 guests at his home.

“I had titans of the business world; I had titans of the banking world; I had titans of the film world; I had the prime minister; I had the mayor of Los Angeles; I had the governor,” says Grainge, who likes lists. “We had everything that I’m talking about: finance, entrepreneurs, start-ups, innovators, disrupters, content owners, content creators, government representation; every component of the future.”

Buy the book

Lunch with the FT

As part of celebrations to mark the FT’s 125th anniversary this year, Penguin is publishing Lunch with the FT: 52 Classic Interviews. The book is available from March 14 as a hardback and ebook.www.ft.com/125

Grainge rejects the music industry’s Luddite reputation but takes some pleasure in observing that “the disruptors” such as Apple and Google are now being “disrupted”. So does he think music is on the cusp of a new growth era? “Hmm,” he nods, finishing his Diet Coke and ordering another as our appetisers arrive. Five wonton crisps stick up like sails from Grainge’s tuna tartare and avocado, and red-dusted croutons lend a spicy tang to my soup.

Grainge came into the music industry as a fan. As a teenager at Queen Elizabeth’s School in Barnet, north London, “I saw the Ramones when they first came over; the New York Dolls when I was 15; the Runaways, and that was that.” His older half-brother worked in artists and repertoire (A&R) and would bring home records and take him to gigs and parties. Grainge was soon hooked on the Flamin’ Groovies, the Clash and the Sex Pistols. “It was the most incredible fertile time,” he recalls.

He skipped university, cold-calling music companies until he got a job as a talent scout and song plugger at April Music, a CBS-owned music publishing company. The week after he joined was a bank holiday, and the ambitious Grainge was not amused at having to take the day off. Worse was his discovery of the “completely bizarre” concept of a debit balance, he explains. “I was only a kid, and I thought what is the point of signing someone to lose money? If only I’d known then what I know now. Believe me, I got used to it!”

He breaks off – “You’ve just reminded me, there’s someone I need to sign” – and sends a message from a well-thumbed white BlackBerry, one of three phones he carries.

Grainge’s first signing was the Psychedelic Furs, and in 1982 he jumped to RCA Music Group where he had his first US hit, with Olivia Newton John’s recording of “Heart Attack”. After a spell at MCA Records, he joined Universal in 1986 to launch PolyGram Music Publishing UK, earning the reputation of having an ear for hits as he worked with bands from Abba to the Eurythmics. Does he still get emotional about music, I ask? “Emotional? Yes.” Does he ever let that override his commercial judgment? “Nah!” He sounds genuinely offended but admits: “If I’m having a really tough day, I’ll put on something that I love and I’ll play it as loud as my speakers or the neighbouring offices will take. I’ll have five minutes and then I’m back.”

Our first courses are cleared away and I ask why Grainge ended up in LA when the original plan was for him to run Universal from New York. “I just had this hunch that [it made sense] to be in California as we hurtle towards running a digital business,” he says.

The only hitch was that Grainge and his wife, Caroline, had already bought a house in Connecticut to acclimatise their three children to the US. Grainge took his wife for a drive to break the news. “I gave her the reasons why and she half-understood it,” he laughs once more, “but the half was enough for me to work on.”

. . .

Our main courses arrive. The Benedicts are served with potatoes and fruit and my scallops are on a lobster risotto, surrounded by a pomegranate reduction.

The move to California put Grainge at the heart of an influential group of British entertainment executives, from American Idol’s Simon Fuller to The X Factor’s Simon Cowell. At weekends, Grainge, an Arsenal fanatic, invites them over to his home to watch football and eat bagels and lox. Cowell and Grainge spend holidays together in Barbados with a crowd including Rihanna and Philip Green but the two men are ruthlessly competitive. “I love him. I tried to steal acts from him 25 years ago,” Grainge says. Successfully, I ask? “Of course!”

His closest competitor now is his former boss. Doug Morris, who once (approvingly) described Grainge as “a killer shark”, was hired to run Sony Music after Grainge succeeded Morris at Universal in January 2011, and the two companies fight over artists even as they collaborate in Vevo, the online music video joint venture launched in 2009.

How does that work? “Sony’s a nice company. It’s fairly insignificant really. They’ve got some good acts and deals that I’d like us to have some day,” he replies, before turning to ask the waitress where the sun has gone. I try again. Impatient with a question that doesn’t fit his theme of an innovative industry moving on to a smarter future, he replies: “I don’t care about Doug Morris. I don’t care about Sony. That’s the past. It’s an old company. I don’t want to talk about it.”

The breeze is picking up and what is left of my risotto has gone cold. When our plates are cleared, a waiter comes to fire up a terrace heater and the conversation turns back to music. I ask why, when rock, punk or grunge once defined generations, this era seems to have no defining musical movement.

When he was growing up, Grainge replies, “musical movements were the social networking of their time. They formed a sense of community. One of the reasons it’s been fragmented is that sense of community’s been transported on to laptops and phones.” He doesn’t seem to mourn this change. “Whether you’re in school in 1975 or 2005 or 2015, what identifies you with your peer group is what music you listen to,” he says. “The world is fragmented. What’s the difference between Psy breaking off YouTube or Phillip Phillips on American Idol? People who are afraid of the future always complain.”

He orders a decaffeinated latte (“No foam, please”) and we contemplate dessert. He asks for mixed berries but is told there are none. “Make a note of that!” he tells me, eager to record that he at least tried to choose the healthy option. Rat Scabies might not be impressed but, as we skip dessert and ask for the bill, Grainge gestures towards his spokesman, saying: “By the time you take him off, it’ll look like I’m quite frugal.”

Andrew Edgecliffe-Johnson is the FT’s media editor

-------------------------------------------

Geoffrey’s Malibu

27440 Pacific Coast Highway

Hot tea $4.25

Mushroom soup $10.00

Corn chowder $12.00

Ahi tuna tartare $16.50

Scallops $28.00

Crab Benedict $22.50

Eggs Benedict $17.00

Macchiato $4.25

Decaf latte $4.75

Total (incl service) $151.98

Copyright The Financial Times Limited 2014. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

LIFE AND ARTS ON TWITTER

More FT Twitter accounts