Maker Of Boy-Bands Faces Departures

By | July 23, 2001 at 12:00 AM

When it comes to riding the boy-band wave in pop music, nobody has done it better than Lou Pearlman.

The Backstreet Boys, ‘N Sync and O-Town are just a few of the groups the Orlando-based impresario and his company, Trans Continental Entertainment, have launched on the road to hormone-fueled success.

But in the past few months, Pearlman has hit some sour notes.

About 15 key executives and staffers, including company vice presidents, the chief operating officer, a tour manager, accountants and publicists, have left or been laid off.

O-Town, Pearlman’s latest breakout success, recently left for a management firm run by former Trans Continental executives, although Pearlman will still earn money from them under a production agreement.

Trans Continental also had trouble finding a distributor for a movie it made for $15 million and shopped around Hollywood.

Only one artist now managed by Trans Continental, 16-year-old Richard Lugo, has a U.S. record label, although Pearlman recently took under his wing B4-4, which has a label in Canada.

Two of the acts Pearlman developed – the girl group Innosense and the boy group Take 5 – recently tried to get out of their contracts. Take 5, which has lost its lead singer, succeeded, and Innosense’s release is being negotiated. Innosense manager Dennis Steinmetz said he didn’t feel Trans Continental was behind the act anymore.

Music industry watchers and former employees aren’t about to write Pearlman off, however, saying he may just be on a downward slope in a business that has regular peaks and valleys.

“From what it seems to the public eye, they may have reached a low, but I think it’s premature to say that they’re through or the company is going downhill,” said Jil Shingledecker, a former Trans Continental marketing and public relations coordinator, who was laid off in October.

Pearlman has dismissed any problems, characterizing the layoffs as people leaving whose projects were finished. He said the executives who departed did so on amicable terms and just wanted to branch out on their own.

As for the artists who have left, Pearlman said it was part of a strategy to separate his management and production operations.

“You can’t be both, to avoid any conflict of interest,” Pearlman said. “It’s a matter of us amicably dividing church and state where management and production have to be separated.”

He added, “We’re making more money this year than we did last year.”

Trans Continental has recently tried to transform itself from a management and production company to a full-service record company, said Scott Bennett, vice president of Trans Continental Records. The company is putting particular focus on a new act, Natural, which is touring with the Monkees.

Natural was the subject of a lawsuit earlier this year filed by another manager who accused Pearlman of stealing the group away from him. The lawsuit is currently being settled.

“The company is very healthy,” Bennett said.

Billboard magazine senior editor Chuck Taylor, for one, was impressed with Natural. The boy-band phenomenon is going to be around for some time, he said, as evidenced by the hype over ‘N Sync’s latest album, and despite the recent misfortunes of Backstreet Boy A.J. McLean, who checked into rehab.

“Lou Pearlman is the Madonna of the business side of music. I think he reinvents himself with the trends that go on in music,” Taylor said. “I think he’s going to be around longer than most of the bands that he creates.”

Pearlman was hurt by the defection and subsequent lawsuits, eventually settled, filed by his biggest successes, the Backstreet Boys and ‘N Sync, in the late 1990s. Both groups sued to be released from their deals, accusing Pearlman of deception and cheating them out of money.

Recent changes in the industry have also worked against Pearlman, some say.

The pop market is harder for groups to break into now than it was just a few years ago because there are so many acts taking up radio time, said Alan Siegel, Trans Continental’s former executive vice president for records.

Siegel, who left the company three months ago to form his own business with another ex-Trans Continental vice president, said it’s common for singers to change managers, and noted that companies nationwide are going through downsizing.

“There have been changes in the entertainment industry as a whole,” Siegel said. “I don’t think Trans Con should be singled out.”

Pearlman may have lost some traction by investing millions in the movie, known at different stages as “Longshot” and “Jack of All Trades.” Described variously as a vanity project or home movie of his pop acts, it stars soap-opera actress Hunter Tylo and Trans Continental vice president Tony DeCamillis; features actor Paul Sorvino and comedian Gilbert Godfrey; and has cameos by Britney Spears and ‘N Sync’s Justin Timberlake.

Pearlman said last week that it has found an international distributor and will be released in Europe in September.

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