Universal Music Chief Lucian Grainge Talks Leadership, Deals, Tencent, Punk Rock and Staying No. 1

By Jem Aswad

LOS ANGELES (Variety.com) – When some executives reach the top, they take a moment to enjoy the view. Not Lucian Grainge. In 2011, less than a year after he was named chairman and CEO of Universal Music Group, he led the company into one of the biggest deals in music business history by acquiring EMI’s recorded-music division — home to artists ranging from the Beatles to Katy Perry. It was a blockbuster $1.9 billion transaction that vaulted UMG far into the lead as the world’s largest music company. In the years that came after, Grainge continued to double down, building the company into a titan unprecedented in the music business. Among the acts represented via five anchor labels — Capitol, Def Jam, Interscope-Geffen-A&M, Island and Republic — are Taylor Swift, Drake, U2, The Weeknd and Sam Smith, as well as iconic heritage acts like the Rolling Stones, Elton John, Chuck Berry and the Motown catalog.

Today, he heads the world’s biggest music company which has a valuation of more than $33.6 billion. Complementing its core recorded-music and music-publishing operations are expansions into merchandise, film and television music, documentaries (including the Oscar-winning “Amy” about the life, death and music of Amy Winehouse) and multiple digital initiatives. Grainge has also led the company’s growth in such territories as Africa and Southeast Asia.

Grainge has been with UMG nearly 35 years — since he was 24 — rising through the ranks until, when he replaced Doug Morris as chairman and CEO early in 2011, there were no rungs left to climb.

He began his career in 1979 at April Blackwood Music Publishing and held senior roles at RCA Music Publishing and MCA Records before joining UMG in 1986 to launch PolyGram Music Publishing UK. Within five years, he had led the fledgling division to become one of the top three publishing companies in that country. Grainge joined UMG’s Polydor in 1993, rising to managing director of the British record label in 1997. He was subsequently appointed deputy chairman, and then, in 2001, chairman and CEO of Universal Music UK and earned the same title at UMG International in 2005, gaining oversight of global operations outside the U.S. He was appointed CEO of UMG in 2010, with the chairman title added the following year.

Monte Lipman, cofounder and CEO of UMG’s top label, Republic, says of his boss: “He’s constantly challenging and pushing us, in a very intellectual way, and forcing us to re-evaluate and adapt to changes in the marketplace: Do we have proper structure? Do we have the right people and positions in place? What’s next? One thing I really respect is that he allows us to operate with a tremendous sense of independence and autonomy, and that’s why we and Capitol and Interscope are red hot. We never do anything to hurt each other, but we’re all very competitive and try to beat each other every day.”

Born and raised in London, Grainge has the credentials, and the DNA, of a true record man. His father ran record stores and other retail businesses. The young Lucian also had a stellar career example in his older brother, the late Nigel Grainge, a veteran A&R executive and founder of Ensign Records, which launched the careers of Sinead O’Connor, the Boomtown Rats, World Party, the Waterboys and many others. That apple did not far fall from the tree: Lucian’s son Elliot, 25, founded the indie label 10K Projects label in 2016. It is home to such successful and, in the case of rapper Tekashi 6ix 9ine, controversial, acts as Trippie Redd, Lil Gnar and Austin Brown.

With a global reach that would make his late father and brother proud, Grainge’s accolades beyond the running of UMG include an honorary doctor of music degree from the Berklee College of Music, the Spirit of Life Award from City of Hope, the Recording Academy’s President’s Merit Award and a knighthood in 2016 by Her Majesty Queen Elizabeth II — and, of course, a star on the Hollywood Walk of Fame to be unveiled on Jan. 23, just ahead of the Grammy Awards.

Grainge’s sharp tongue is a thing of legend — he allegedly screamed at one of the world’s biggest rock stars over the phone during contract negotiations for a deal that ultimately was sealed to the satisfaction of the parties. But in this rare in-depth interview, he spoke at length about his own colorful history, recent UMG events both exciting — Tencent’s acquisition of 10% of the company, finalized late last year — and troubling (the damage the company’s archives sustained in a 2008 warehouse fire, revealed in a New York Times article last summer, which UMG says contained “numerous inaccuracies”). But most of all, he held forth on the philosophies, practices and challenges in running the world’s biggest music company, and making sure it stays that way.

You got your start in the industry during the punk era in London. What was that like?
I was living with my parents about a mile and a half from Central London, so I’d ride two bus stops and literally be in the heart of punk. I saw the Sex Pistols at the 100 Club, the Clash at the Hammersmith Palais, the Stranglers many times. There was a derelict house in Totteridge in North London where the Damned used to rehearse, and I would go up and listen. It was a time of great change and great energy — it was exciting and I was very fortunate to be in it and around it. There’s scientific evidence that the music you listen to between the ages of, I think, 17 to 21 influence you the most, and I’m not different.

You were at the legendary Ramones show at the Roundhouse in 1976 , where almost the entire London punk scene was in attendance, weren’t you?

Yeah, I was standing on the stage! Nigel had made the U.K. deal for [the Ramones’ U.S. label] Sire with Seymour and Linda [Stein], and they all came over for it. The Runaways went on first, then the Ramones, and the Flamin’ Groovies were the headliners. A few years earlier, I saw the New York Dolls at York University, where my uncle was a professor of physics. They came out of this shitty little hotel in these monstrous platform heels and bell bottoms and everything, and everyone just stared. I never forgot that.

Did the attitudes of that time influence your approach to the business?
I’m definitely a product of it. Whatever cycle we’re in, the punk mentality is an energy, it moves people, and I think that’s what creates culture — certainly we’re seeing it in hip-hop at the moment. I don’t want to come across [as overly nostalgic], but it was an incredibly creative time, and I think this is, too. These cycles come probably every 10 or 12 years, and it’s a part of my job and our role to transform and evolve. Good music and energy counts, whether it’s from the 1950s or yesterday.

When people say Soundcloud rappers “can’t sing” or that the genre “isn’t music,” it’s hard not to respond, “Isn’t that what parents said about punk rock?”
One hundred percent. When Elliot played me [Tekashi 6ix9ine’s song] “Gummo,” I said, “This is a punk record!” I hadn’t got a clue what it was about, but that was irrelevant: The energy came off of it like steam.

Grainge with The Weeknd after being honored by the Songwriters Hall of Fame, 2018

Does Elliot ever ask you for business advice, or is it more that he doesn’t want it?
(Laughs) I don’t know that he wants advice, but he’ll come to me and ask if I’ve been in a certain scenario or seen a particular situation. And I’m equally interested in his opinion, from a scene perspective. He has strong opinions and he’s forging his own way. More than anything, I’m very proud of what he’s done.

Does he ask you to hear acts he’s signed?
No, I normally hear things many months after he’s signed them. Believe me, the last thing you want to do when you see your family at the weekend is have an A&R session!

Who were your mentors — apart from Nigel, assuming he was one?
Nigel was an enormous influence — I wouldn’t describe him as a mentor. There’s a difference. Nigel was a purist, he was from an era where he would make music for himself and if he liked it, he expected everybody to like it. He could be incredibly dismissive, notoriously dismissive. I was managing a band when I was 17 that I thought were the greatest ever — I’m not prepared to say who they were! — and I brought him down to see a rehearsal in the basement of one of my father’s shops. I was like a puppy dog, looking up to him, because he was 13 years older than me. “Well, what do you think?” Know what he said? “Absolute shit.” I was crushed! He wasn’t doing it as a challenge — it was genuinely what he thought.

But in terms of mentors, Maurice Oberstein, the [former] chairman of CBS U.K. [who hired a teenaged Grainge in 1979], was very flamboyant and quite dominating — I was 19 years old and he scared the shit out of me, but he was a brilliant businessperson and his leadership left a mark on me. He kept reminding me of the importance of A&R and its significance within the organization: “A&R is special and gets treated differently — they’re like artists.” That made a great impression on me. As long as you’ve got great music and great A&R people and a sort of a gang mentality, you’ll win. [Former PolyGram chief] Roger Ames was a great boss: again, very driven by A&R, getting the records right, deal flow, being competitive.

You and Sony Music Group chief Rob Stringer came up at pretty much the same place and time, right?
Yeah, I think he’d been a marketing trainee at CBS, and we became aware of each other at least 30 years ago. He’s a friend, a great guy.

Did you hang out with him back then?
Only to decapitate him! (Laughs) He was working at CBS and I was at PolyGram, so what do you think?

Grainge with singer Tony Bennett and (far left) manager Danny Bennett. 

You started as a publisher, which isn’t the case with most music group chiefs. Do you think that makes your approach to the business different from other execs?
Publishing is far more multi-dimensional in the formative stages of a person’s career: You’re involved in deal evaluation, relationship management, early song feedback, artist feedback. And it’s easier! I found that it helped me learn how to work with and talk to creators, because it gave me an easier platform. The relationship between a writer and publisher is much gentler.

How so?
Not dealing in everyday conflict — or what’s perceived as conflict. I used to sit down with artists and say, “Right, I love you and I believe in you, but now we’re now gonna go into creative conflict. Don’t read too much into this, but I’m going to stress-test what you think and what you do.” If I felt something wasn’t good enough or didn’t live up to the potential of that artist or that writer, I’ve never had a problem telling them.

Someone sent me an article recently, a “where are they now?” kind of thing with someone from the Lighthouse Family, who we signed to Polydor [Records] in the early ‘90s and went on to have phenomenal success with — I mean, many millions of albums and three or four huge hits. The main writer of the group talked about how I’d told him his songs were awful. He’d said, “Well, all my friends like them,” and I said, “If you’re making an album for your friends, you don’t need me!” I was hard on him — hard enough that he went back and ripped it all up and started again and came up with three hits, I think a couple of them were number ones. Reading it 26 or 27 years later, I kind of winced at myself, but it’s always come from a place of trying to make things great.

I have great respect for my teams when they’ve got the guts to say something’s not good enough. It doesn’t bother me, even if they’re wrong. You’ve got to have the confidence to stress-test ideas, songs, creations. I think that’s what powerful creative relationships and leadership are about.

What was the first act you ever signed?
The Psychedelic Furs, to April Blackwood Music. I loved them. There was one defining song — with a new act, there’s usually one song that you sign them on, when you’re a kid, anyway. Theirs was this hypnotic song, “Sister Europe.” I had this beat-up old Mini that I used to drive to their gigs, and I put a [big bumper sticker] on the back of it that said “Psychedelic Furs.” It was probably there for two years — I was such an idiot, so uncool (Laughs). But when you’re a young A&R, you’re one of the fans as well as having a professional relationship.

Did you ever find the balance between those two things difficult?
Easiest thing I ever did!

I read an old interview where you said you used to drive out to smaller cities and sit outside record shops to see what people were buying.
Pre-internet, that was “data”! There used to be sometimes three record stores in the same mall, and when I was head of A&R at Polygram, we’d get in a little minivan and go out of town in a departmental group-bonding exercise and sit there, eat a burger and look at people coming out of the stores: “What is it that they like? What would they want to buy at Christmas?” That’s how unsophisticated market research was.

How has your vision for a 21st century company come into view?
It’s amazing: When things work, in retrospect it always seems obvious. I’ve always followed my instincts and been able to put that together and stress-test it with the great people I’ve got around me. The changes of the last few years, and the challenge that I’ve put to the teams worldwide, show that I’m obsessed with putting ourselves in the artists’ position, what they think and need, and how we can support that and add value.

It probably sounds classically humble, but I also want to say that this is the biggest company in the entire history of the music business, and there are still many, many things that I want to improve and speed up — but I’ve cultivated some deep friendships and relationships here, and they mean a great deal to me. The quality of the teams and the way in which they work is something which I am very proud of. That’s what’s made the difference — they make the difference.

What do you look for in an executive?
Taste, charisma, commercialism, leadership, the ability to say no, confidence and the confidence to fail — and to succeed. Those are all things that, hopefully as a culture, the company gives. There’s no playbook.

You’re known for fostering a competitive environment between your executives.
People read too much into that. People who are driven and care and are passionate — that’s all we have to worry about.

Do you often have to play referee?
Sure. And the more often that I have to play referee, the more it means the system’s working. My leadership style is exactly the way that I wanted to be managed: enormous amounts of space and support.

Grainge with Katy Perry.

Do you plan to do more multi-level deals, like the one you did with the Rolling Stones that encompasses recorded music, video, merchandise, retail licensing and brand management?
Absolutely. I believe in going all-in and long-term planning; I’ve never been part of a company or encouraged any of our people to think about a quick buck. Everybody is different, there is no one-size-fits-all, but we’ve been able to have [some] business and commercial relationships where we lean in with everything and have a holistic approach.

Mick Jagger is a notoriously tough businessman. Did you negotiate with him directly?
The negotiation was actually handled out of London by [UMG U.K. & Ireland chief] David Joseph and his team. Originally, when I first brought the Stones into the company… [he tails off]. Very rarely will I get involved in a negotiation directly, very rarely. And when I do it’s because the principal on the other side wants it. When they want it, I’m more than happy to put my sleeves up and deal with it. I’ve done it often enough.

Does that happen often?
It depends. I might have to deal with something directly with a major artist, and yet I might have an unknown artist who’s got a few thousands Instagram followers at my house.

How do you feel about Tencent’s acquisition of 10% of UMG ?
I think it’s very exciting. They certainly bring to the table an innovative approach toward technology and a keen view of the Chinese market. You combine that with the incredible support we’ve received from Vincent Bollore and the Vivendi team, and we have the right ingredients to continue building a company for what the business will be five to ten years from now.

Can you give an update on UMG’s investigation into the 2008 archive fire ?
I committed us to transparency in our work on this situation, and since then we’ve added significant resources and have been in the process of responding to every single artist that has reached out to us. We still have a way to go before we respond to all of the requests, but one by one we are getting artists the answers they deserve. Based on the nearly 150,000 assets that the team has reviewed to date, I’m relieved that what we believed at the outset remains the case: the initial press reports were either greatly overstated or simply flat-out wrong. That doesn’t take away from the terrible accident that occurred, but the facts are turning out to be far different than what some would have you believe.

What do you think is the biggest challenge facing the industry?
[Pauses] The speed of change. I often say that what I know in 12 weeks’ time will be different from what I know today. Some people might think that’s a challenge; I think it’s beautiful and exciting and stimulating, and the proof in the pudding is that we keep up with that change. In terms of the challenge, the industry has to continue with long-term creative thinking.

We’ve had double-digit growth for the past three years, but it’s going to level off — is there too much optimism now?
Look, I’ve been around long enough: I’ve seen two or three very, very significant cycles. I think all we can do is follow our North Star and add commercial, legal and financial discipline to it.

One of the fortunate things in my career is that I was running [Universal’s] international division in London when this Swedish company called Spotify started to emerge in Scandinavia, and I was an early believer. There were so many disbelievers in streaming, people with very short memories — and as I said, when something works it’s very easy in retrospect to look back and say it was obvious. But the [streaming] subscription model was an incredibly difficult concept for my predecessors to understand. I remember doing a deal with Nokia around 15 years ago, a prepackaged subscription model where the consumer could download I think 3,000 or 4,000 songs, and trying to get people to understand that concept — that it was possibly a new way of music consumption, when everybody was still completely and utterly focused on transactions and protecting that model — was something we really had to fight through.

There will be different companies and ideas and ways of promoting, marketing, monetizing music, and they can come from anywhere in the world — look at the impact that TikTok has had in a relatively short space of time. If the big platforms we know today, like Apple or Spotify or Amazon, continue to invent and evolve, nothing would give me greater pleasure. But do I think there are businesses we haven’t discovered or haven’t been invented yet? Yes, and I’m extremely positive about that.

What stood out about Spotify from other early streaming entrants?
I just had a very good feeling about it. This was at a time when we were losing most of the economics, apart from digital downloads, to file-sharing and illegal downloads. It gave hope in a different way, it gave opportunity — it monetized usage. People who had been illegally file-sharing were able to go to a legitimate platform that was even better. You can see how they’ve built and evolved their company over time. It’s been good for everybody.

How is your relationship with the DSPs these days?
Good! Let’s be realistic. We’re the market leader: Think about how significant the operating and financial and strategic relationships are with all of them. And I would have given you exactly the same answer if you’d have asked me 25 years ago about my relationship with the CEO of [former retail giant] HMV. There’s nothing we can’t sort out. If I read something [controversial about the relationships] in one of the newspapers, I laugh about it with them. Just look at the results — look at where the industry is today.

UMG’s acquisition of EMI’s recorded-music division was one of the biggest deals in music-business history, and so complicated. Was there a moment when you worried it wouldn’t come together?
I never think like that — just keep charging ahead. In the ’60s and early ’70s, EMI in the U.K. was the gold standard, a fantastic company, and I just thought it was a special, unique opportunity that was important for Universal. I kept saying, when no one believed me, that we were going to reinvest in the company and invest in [longtime EMI subsidiary] Capitol, and almost nine years later, I feel everything I said was true and honest and accurate. I’m proud of what the teams have done, and we march on.

Was it your most challenging deal?
Yeah, probably. But I’ve never thought of it as challenging. I think of it as the future.