What's Behind Nashville's Label Shuffle

6:26 PM PST 02/29/2012 by Chris Willman
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Luke Lewis (left) and Mike Dungan

Capitol's Mike Dungan is named chairman and CEO of Universal Music Nashville Entertainment as Luke Lewis steps aside. Is Music Row bracing for a showdown or a reunion?

When is leaving the presidency of a major record label not really leaving the presidency of that label? Answer: When your past and future labels are due to merge eventually anyway.

At least that’s the expectation with country music kingpin Mike Dungan, who shocked much of the Music Row community by resigning his post in charge of Capitol Nashville to take over Universal’s Nashville operations. After word of the switch got out late last week, the move was officially announced today by UMG chairman Lucian Grainge.

The wrinkle is the proposed merger between EMI and Universal, which could pass through the various international approval processes this fall. Combining the recorded music units may leave Dungan back in charge of his old Capitol roster, on top of the Universal imprints about to be put under his command.

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That’s what many of the top acts currently signed to Capitol are banking on, since they’re about to lose having the most popular exec in Music City on their side. Indeed, Capitol Nashville has lately been the brightest spot for the struggling EMI, at least when it comes to new, not catalog, product. Among the Capitol acts that could suffer without such a hot leader at the rudder: Lady Antebellum, Darius Rucker, Alan Jackson, Keith Urban, Dierks Bentley, Eric Church, Luke Bryan, and Little Big Town.

“Anything could happen with the merger, but I’m confident we’ll be working with him again by the end of the year,” said one artist manager. “He’s left a good support team in place, so I’m not that worried. But there are those moments when you’re looking to get a hit across and Mike would be the guy to make a few phone calls to push it to the top. I’m a little nervous what we’ll do without his ability to come in and do that.”

But a Universal insider says Capitol staffers and execs shouldn't be all that stressed about the succession, pointing out that the executive plan is to increase investment in Capitol's A&R that will run parallel to those initiatives on the Universal side, not replace one with the other. Where the merger will affect departments on both sides is in back office functions.

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Dungan, who’s headed up Capitol Nashville since 2000, is staying put through the end of April, then becomes the chairman and CEO at UMG Nashville on May 1. In his new gig, he inherits a larger roster that includes Sugarland, George Strait, Shania Twain, Josh Turner, and Easton Corbin.

An unresolved question is what the future plans are for outgoing Universal Nashville chief Luke Lewis, (pictured below with Mercury Nashville/19 Recordings artist and American Idol runner-up Lauren Alaina) who’s been in charge of major labels for 20 years, far longer than any other exec in town.

One thing that’s certain, though some are loathe to believe it: It’s a friendly transition. “Luke wanted out,” insists one mover-and-shaker who’s been close to Lewis, 64. “He’s done this long enough, and he has two young kids at home. I think he just wants to run an independent label or something now. He wanted Mike as his successor.” Adds another source: "Luke and Mike are friends. It was Luke's idea to bring him in and it came months before Universal was even contemplating a bid to buy EMI." 

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Although the news came as a shock to most Capitol and Universal staffers, it was known to top insiders around Nashville for a while. A story going around has it that Sony Nashville head Gary Overton was flummoxed recently when both Dungan and Lewis showed up at a wine tasting event at his house, fearful that the two execs would be feuding over the transition-to-be. But the two label chiefs proceeded to surprise everyone in attendance by sitting down together and chatting up a storm.

The country industry will be pleased to see an amicable changing of the guard, since there is some bad blood left over from the last major Music Row transition, when Joe Galante left the long-time leadership of Sony without the company throwing him a farewell party, the sort of oversight that doesn’t go down well in as supposedly chummy  a town as Nashville.

Dungan leaves Capitol at a fairly convenient time, when most of its artists are between albums or on a second or third single off their latest projects – like Urban, whose "You Gonna Fly" is currently No. 1 on the Billboard country chart, and Bentley, whose "Home" is bulleted at No. 4.

The imminent release most in need of the Dungan touch is Alan Jackson’s first album for the label, which is due out in May. Dungan is expected to heavily work Jackson’s new single, “So You Don’t Have to Love Me Anymore,” before he makes the move.

Although Lewis and Galante were long the two titans in town, the most buzz-generating label heads in the last couple of years have been Dungan and Big Machine upstart Scott Borchetta. Dungan is credited with the unlikely success of reintroducing Hootie & the Blowfish’s Rucker as a country star, as well as establishing Urban and Lady Antebellum as superstars and resurrecting Trace Adkins’ career.

“When times were tough for EMI a few years ago and they were pressuring Mike big-time to put out albums earlier than he thought they were ready, he never wavered or caved, ever,” said one former Capitol exec who still admires Dungan. “He fought for his label team and artists against EMI at times, and kept everyone feeling like a family, even in hard times. He’s one of the most-liked guys in this town – and, he can cuss up a storm.”

Dungan may have to put his likeability to the test, though, if he’s forced to make some hard decisions upon getting to Universal. “He’s going to have to make a lot of roster cuts, especially if the merger happens,” says a manager, “and that’s the kind of stuff he really, really hates.”

Twitter: @chriswillman

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