ENTREPRENEURS: Geffen’s Golden Touch

By the time Bob Dylan ended his six-week concert tour last week, fans in 21 cities had paid $5 million to see and hear him. Dylan will pocket about $1.5 million, and the rest will go for expenses and promoters’ percentages. Not a penny went to David Geffen, who organized much of the tour.

Geffen, the 30-year-old president of Elektra-Asylum Records, is not complaining. The tour will help boost sales of Dylan’s new Asylum album, Planet Waves, which already has become a Gold Record ($1 million in sales at the manufacturer’s level). Two other new Geffen productions, Joni Mitchell’s Court and Spark, and Carly Simon’s Hotcakes, were gilded last month in their first week on the market. Since the recent downfall of Clive Davis as president of Columbia Records, Geffen has emerged as the financial superstar of the $2 billion pop music industry.

When Geffen took over Warner Communications’ Elektra records division in July 1973, it was barely breaking even. Geffen merged Elektra with his small Asylum label, dropped 25 of the 35 Elektra recording artists, fired Elektra’s art director and the entire publicity, promotion and production staffs. Then he spirited Dylan away from Columbia, the Band from Capitol and Joni Mitchell from Warner Bros, (a separate subsidiary of Warner Communications). In 1973, the first year of Geffen’s tenure, Elektra-Asylum sales were $18 million; so far this year sales have already hit $7 million.

The young entrepreneur’s career began at age 14, when his mother, who owned a corset store in Brooklyn, cut off his allowance. He took odd jobs as a theater usher and a mail clerk, decided to skip college and become a talent agent. Geffen falsely claimed a drama degree in order to land a job in the William Morris Agency’s mail room. “I came in an hour before anyone else so I could check all the incoming mail,” he recalls. “I was just trying to intercept the letter from U.C.L.A. saying they had never heard of me.”

Geffen was made an agent within 18 months, and left three years later to become a talent manager in Hollywood. Unable to impress film stars, he turned to rock titans, built up a solid list of clients (Joni Mitchell; Laura Nyro; Crosby, Stills, Nash and Young) and made his first million at age 25. Geffen launched the Asylum label with $400,000 in savings in 1971, and a year later sold out to Warner for $5 million. Though he dresses casually, shaves irregularly and speaks with an un-promoter-like politeness, Geffen drives himself uncompromisingly. “I have the demonstration records of new artists converted to eight-track tape for my car stereo,” he says, “so I can audition while I drive.”

Star System. One secret of Geffen’s success is selectivity. Asylum’s 32 artists turned out only 28 albums last year. “You should be proud enough of every album you release to make sure it gets proper promotion, exposure and packaging,” he says. Geffen is able to sign and retain big-name stars by giving them generous royalties (as much as 15%, about double the industry average), allowing them considerable artistic freedom and establishing warm personal friendships. “He romances them,” says a New York-based competitor. Sometimes quite literally: Geffen used to squire Laura Nyro.

“The record business is the only part of show business where names are still important,” says Geffen. “A Dustin Hoffman movie won’t necessarily do big things. But a Bob Dylan album will always sell. It’s still the star system. And this is one of the few places in show business where an executive like me can be a star, too.”