A SOUND REBOUND

By David E. Thigpen

When a little-known gospel group named God's Property made its debut last summer, more than a few record executives must have gagged on the irony and wished the album a quick trip to industry hell, the discount bin. The group's distributor, Interscope Records, had previously banked some of rap's most notorious performers. But the rap-flavored rhythms and praise-the-Lord lyrics of God's Property rose in the charts. Divine intervention?

Iovine intervention is more like it, as in Jimmy Iovine, head of Interscope Records. Prodded by its new owner, Seagram, Iovine and partner Ted Field are remaking Interscope from a high-risk purveyor of gangsta rap into an imposing presence in rock, R. and B. and gospel, gobbling down an ever bigger slice of the $12.5 billion U.S. record market. God's Property--which went on to sell a heavenly 1 million copies three months after hitting record stores--helped slingshot Seagram's Universal Music Group last summer from fifth place to third place among the six top record companies, with 13.8% of the market.

Two years ago, Interscope was a small record company that became a huge political problem for its then owner, Time Warner (parent company of TIME's publisher), by releasing gangsta-rap albums such as Tupac Shakur's 2pacalypse Now. Capitulating to critics, Time Warner severed its joint agreement with Interscope and sold its 50% stake back to Iovine and Field for $100 million. Four months later, the two resold that stake to hit-starved Universal for $200 million. This is not an industry big on morality plays.

Since then, Interscope's sales have nearly tripled, to about $340 million this year. A hefty portion of those sales was spun off by its hugely profitable rap subsidiary, Death Row Records, whose owner, Suge Knight, is in prison and whose biggest star, Tupac, is dead, victim of a gangster-style rubout as he rode in Suge's BMW. Facing this kind of continuity problem, Iovine and Fields started focusing the company's resources on nonrap acts, and the shift is paying off.

Not since Geffen Records in the early 1980s has a record label so dominated the industry. This year five of Interscope's albums have hit the Top 10, including the bland pop-rock act the Wallflowers, smooth R.-and-B. quartet Blackstreet, and shock rocker Marilyn Manson. "They keep things lean and focused," says Geoff Mayfield, charts editor of Billboard magazine. "They don't have a ton of acts, but they have a very high batting average with the ones they've got."

Spectacular successes like these have been based largely on a Faustian handshake: the company's willingness to gamble on edgy, explicit music made by edgy, unpredictable performers. The artists include Snoop Doggy Dogg, whose resume includes a drug conviction, and Manson, whose malevolent twist includes such ditties as Tourniquet and Irresponsible Hate Anthem. Their discs have attracted millions of young buyers fascinated by the music's aggression and X-rated imagery.

The golden gut at Interscope belongs to Iovine. The son of a longshoreman, he grew up on Brooklyn's tough streets and still has the switchblade tongue to prove it. A lean, wary man and one of the few record executives who looks natural in jeans and a baseball cap, Iovine pulled himself up to become a trusted producer for Bruce Springsteen and U2.

The gold is Field's. His father owned the Chicago-based Marshall Field's department stores, leaving him a fortune. A ponytailed, multimillionaire socialite, Ted Field enjoyed the usual rich-boy playthings--racing cars and producing films--but chafed at his playboy image. Bored with collecting dividend checks, he asked his friend U2 manager Paul McGuinness about getting into the record business. "You can have all the money in the world and be the unhappiest guy in the world," says Field. "I wanted to do something that meant something in my life." And what would that be? Making hard-core rap records, it turned out. McGuinness introduced him to Iovine. Venture met capital. Flatbush met Beverly Hills.

The things that set Iovine and Field apart make them a formidable business duo. Iovine's nose for the unconventional enables him to sniff out promising bands before anyone else. "I don't care if it's eight donkeys in a row playing harmonicas," he says. "If they all look great and sound great, I'll sign 'em."

Field's fat wallet and experience managing money made it easier for Interscope to attract capital. He is also an amateur drummer who loves attending concerts and sizing up bands. "The magic in this dynamic between me and Jimmy is that all my life people saw me as a kid who inherited money," Field explains. "Jimmy was one of the first to see that I had creative ability in addition to business ability, and I helped Jimmy because I saw that he had incredible business instincts." Iovine's ease with musicians helped Interscope strike up several profitable partnerships with subsidiary labels, including Trauma Records, through which Interscope signed multimillion-seller Bush; Nothing Records, which brought Manson and industrial-rock innovator Trent Reznor; and Death Row, through which it co-financed discs by Snoop and producer Dr. Dre.

Iovine often sees hits where others see only whiffs. In early 1991 he heard a tape by a scuffling California punk-ska band called No Doubt. The band had been struggling since the late 1980s with little to show for it. Iovine recognized that No Doubt's alternative pop sound offered a fresh twist on rock, and that singer Gwen Stefani had star power. "All the pieces fit together, even if the music wasn't that far advanced," he says. "We felt they could be big, with a little work and grooming." Iovine and Interscope president Tom Whalley sharpened the band's songs and encouraged Stefani to take a much more prominent role. No Doubt's third album, Tragic Kingdom, became a smash, selling 8 million copies.

Iovine and Field ran Interscope without a net, rejecting marketing reports and giving musicians leeway to direct their own careers--sometimes with combustible results. In May, Trauma sued Interscope over control of No Doubt, a spat settled with a $3 million payment.

Interscope still has a management problem with Death Row Records, given that the label's president, Knight, isn't making many meetings from his jail cell in San Luis Obispo. Suge is doing nine years on parole violations for stomping a man in a Las Vegas hotel shortly before Shakur was gunned down. A few weeks later, the Los Angeles Times reported that the fbi was investigating allegations of organized crime at Death Row. Then, in April, Shakur's mother Afeni sued Death Row over money allegedly owed her son. She won several million dollars and control of Tupac's master tapes.

Field and Iovine could pay the settlements out of petty cash. Universal is poised to purchase their remaining 50% of Interscope for about $350 million, but Death Row is history. Interscope is leaving gangsta rap further behind and has signed new deals with a reformed Dr. Dre (who now shuns the genre) and R.-and-B. producer Teddy Riley.

Iovine won't make any excuses for Death Row or rap, nor does he particularly care to discuss it. "We're out of business with them. It's irrelevant," he snaps. He and Field produce records, period. For them, groups and labels may go, but the hits just keep on coming.

--Reported by Patrick E. Cole/Los Angeles

With reporting by Patrick E. Cole/Los Angeles