NEW YORK, SEPT. 5 -- Walter Yetnikoff stepped down today as chief executive of CBS Records, saying he will continue as a consultant to Sony Corp., owner of the multibillion-dollar recording company.
Yetnikoff's decision to "go on sabbatical now," transmitted to Sony Chairman Norio Ohga on Tuesday, did not take the music industry completely by surprise, since he already was regarded as a lame duck. But the actual reasons for the 57-year-old Yetnikoff's departure still were a mystery.
His departure came five weeks after the publication of "The Hit Men" by Random House, an expose of the record industry in which Yetnikoff has been a major player since 1971. The book charged that the industry is rife with deals, drugs and payola.
Yetnikoff's decision was announced by CBS Records. It quoted him as saying he had decided to "accelerate" his previously announced intention to serve as head of the company for only two more years. "Following a sabbatical leave of a few months or so, I will work together with Norio Ohga on long-term projects affecting the future growth of Sony," Yetnikoff said.
In reply, Ohga issued a statement saying CBS Records was fortunate in having a strong and resourceful management team to take over from Yetnikoff. He named three executives -- Tommy Mottola, head of CBS Records's domestic business; Robert Summer, president of CBS Records International; and Neil Keating, president of Columbia House -- to "run the day-to-day operations" of the company.
Yetnikoff brought many stars to CBS Records, including the Rolling Stones, Billy Joel, Bruce Springsteen, Cyndi Lauper, Michael Jackson and Barbra Streisand.In recent years, his relationships with several stars, including Springsteen and Jackson, appeared to have deteriorated, according to industry observers.
Sony's announcement that Yetnikoff had only two more years to go as chief executive officer also was seen as putting him in the position of a lame duck.
Whether disclosures in "The Hit Men," a book by Vanity Fair contributing editor Fred Dannen, had anything to do with Yetnikoff's hastened departure also was a matter of industry speculation. The book was the first to attack the people and politics involved in running the industry, including Yetnikoff, Clive Davis of Arista Records and David Geffen, who put together the label bearing his name.
Yetnikoff joined CBS Records as an attorney and became president of CBS Records International in 1971. In 1975, he was made president of CBS Records and was instrumental in its sale to Sony in 1988 for $2 billion -- for which he reportedly received a $20 million bonus.
Yetnikoff's departure came a day after a federal judge in Los Angeles dismissed all charges against record promoter Joseph Isgro and two other defendants and declared a mistrial, ending the biggest music industry payola trial since the 1960s.