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Artists assert power at Avex / Record label aims to restore order after management rift

Major record label Avex Inc. based in Minato Ward, Tokyo, is recovering from a state of disarray after internal rifts led to the resignation of its senior managing director.

The infighting became public knowledge after Masato Matsuura, 39, one of the company's founders and a key figure in its growth, resigned Sunday. Two days later, however, Avex announced that Matsuura would return to the company.

Later Tuesday, Avex Chairman and Chief Executive Officer Tatsumi Yoda, 64, announced that he had assumed the post of nonvoting honorary chairman, and that Toshio Kobayashi, 39, a managing director, had been appointed the new president of the company.

The resignation of Matsuura, known as the force behind a string of Japanese pop megahits, seemed to provoke a backlash against the label from its employees and contracted musicians.

Established in 1988, the label saw rapid growth after signing major pop singers, including Namie Amuro and Ayumi Hamasaki. Its stock has been listed on the First Section of the Tokyo Stock Exchange since 1999. Shortly after the company's foundation, Yoda, who worked for an electric equipment maker at that time, was tapped to take the top job at Avex.

With Yoda looking after corporate management and Matsuura taking responsibility for music production, it did not take long for the company to become the nation's leading label.

But the prolonged downturn in sales of compact discs has hit Avex just as hard as it has other labels. Over the past three years, its business performance has been at a standstill. Under the circumstances, the management increasingly had called on the production side to reduce costs, sources said, adding that differences of opinion between the two sides were increasingly evident.

A board of directors meeting Friday reportedly triggered the resignation of Matsuura. During the meeting, Ryuhei Chiba, 40, president of talent agency Axev Inc., an affiliate of Avex, was urged to resign over irregularities concerning which acts he signed.

This was resisted by Matsuura--reportedly a close ally of Chiba--who then unsuccessfully put forward a motion to dismiss Yoda. Matsuura and Chiba ended up submitting their resignations after the meeting, but the move only led to further confusion.

On Monday, Avex's employees were informed of Matsuura's resignation at the company's regular morning meeting. In response, some employees reportedly asked the management to persuade Matsuura to stay with the company. Others hinted they would consider establishing a new firm together with Matsuura, according to the sources.

Concerns among Avex employees were fueled as the company's stock plunged by its daily limit to close at 1,608 yen on the TSE on Monday.

The same day, many artists signed to the label expressed their support for Matsuura.

Hamasaki said, "I'll decide on my future course depending on his (Matsuura's) fate."

Hiro, a member of pop group Exile, also spoke out in support of Matsuura. "The senior managing director (Matsuura) is my business mentor. I want to stay true to my beliefs and work with him to create music that will make history," he said.

Similarly, Avex's other musicians, such as hitomi and Kumi Koda, put messages supporting Matsuura on their Web sites.

Fearing that it might lose some of its artists, Avex management then tried to mend fences with Matsuura. The same concerns also appear to be behind the management reshuffle.

Kobayashi and Yoda held a press conference at the TSE at 10 p.m. Tuesday.

"I asked Matsuura to return and made preparations accordingly. From now on, I'd like Matsuura, Kobayashi and Chiba, who will be reinstated as Axev president, to establish their own management system," Yoda said.

When asked whether responses of its artists to Matsuura's resignation affected the management reshuffle, Yoda said, "It would be a lie if I said the drop in stock prices and the musicians' responses didn't have any impact on that."

Kobayashi said: "Matsuura was a friend of mine at high school and our relationship hasn't changed since then."

From The Daily Yomiuri, 5 August 2004