Keith Mardak – Don Johnson Service Award 2012
Larry Morton was “the new guy” at the company when he landed in L.A. on his first business trip with the boss in 1990. As the pair made their way onto the rental car parking lot on a Sunday evening, he was made aware that Keith Mardak, chairman of Hal Leonard Publishing, was moving quickly and was hustling him to do the same. After the mad dash to the rental car agency, they drove to the exit gate just as another car pulled in front of them to check out before them.
Mardak slapped the wheel of the car. Morton asked what was wrong.
“I was trying to beat that guy” Mardak said.
Recalling this 20 years later, Morton laughs. “I thought, ‘Man, this guys is competitive!’ If he’ll work to race the only other guy on the rental car lot – a guy he doesn’t even know – what will he do for business?!?”
Turns out, the answer is: quite a lot.
Mardak’s tenacity and energy made Hal Leonard the biggest music publisher in the world and his good work in this industry would be worthy enough for consideration for the Don Johnson Service Award. But many don’t know of Keith’s expansive philanthropic activities. Not content to be merely a check-writer, he brings the same smarts, intensity, and drive to every board meeting of every charitable endeavor he’s involved with, just as he does sitting in the head chair of Hal Leonard.
First and foremost is his stewardship and support of the Boys & Girls Clubs of Greater Milwaukee. The organization serves more than 35,000 economically disadvantaged children annually, and Mardak’s good work has led to two B&GC buildings beign named after him, including the Daniels-Mardak Boys & Girl Club, named after Keith and Bishop Daniels. The doors to the 30,000-square foot Mardak Center for Administration and Training, which houses the clubs’ administration and training staff opened in fall of 2001. When the building opened, Michael Jordon and Rev. Jesse Jackson were among the luminaries present.
“He does a lot to help kids gain experience and exposure and realize their dreams,” notes Jim Clark of the Milwaukee Boys & Girls Club. “He provides hope and inspiration to more kids than we can even know. He’s a creative guy, and puts together partnerships and makes available opportunities to these kids that they wouldn’t otherwise have.”
But that’s not the only organization Mardak’s worked with.
“He believes in the transformative power of music,” says Maryellen Gleason, president of the Milwaukee Symphony Orchestra, another group that Mardak supports. “And I appreciate that he seems to be able to combine artistic integrity with an entrepreneurial spirit. He makes goals happen and doesn’t mess around!”
“Keith Mardak’s commitment to the children of Milwaukee is unmistakable,” says Tim Greinert, president of Milwaukee’s Junior Achievement. “His personal support has allowed Junior Achievement to provide personal financial literacy skills to hundreds of Milwaukee students through a collaborative summer camp partnership with the Boys and Girls Clubs.”
“He’s a hometown guy, and he loves this city,” Morton says. “He grew up on the Southside in a Polish/Eastern-European neighborhood and has stayed in touch with his modest roots. He gives back.”
“It Really Moved Me”
In 1988 Mardak met an associate of the Boys & Girls Club who convinced him to come down for a tour. “It really moved me,” Keith says. He started writing checks for the Milwaukee Boys and Girls Club and, correctly sensing he had more to give than just money, in 1994 the organization invited Mardak to sit on the board. A high-profile organization, other board members included the chief of police, Milwaukee’s leading businessmen and women, and even NBA baseball commission Bud Selig.
Not surprisingly, Keith didn’t hesitate to take advantage of the large publishing company behind him. “We provided guitar books free of charge, sending 15,000 books a year to the organization, and at one point had Bonnie Raitt involved in the program,” he says. “Then we expanded beyond guitar to bass, drums, keyboards, and singing, and met with the volunteer teachers to shape the program.” Hundreds of kids a day were making music after school because of Keith and Hal Leonard. “We got to the point where we had to hire a full time person to run it.”
He supports the Milwaukee Youth Art Center (MYAC), a first-of-its-kind arts education facility that provides children the opportunity to express themselves through the arts. Another organization he champions is First Stage, which is celebrating its 25th anniversary this year and has grown to become one of the nation’s most acclaimed children’s theaters and the second largest theater company in Milwaukee.
So inspired by his own volunteerism, Mardak does more than just encourage his employees to give of themselves: members of his staff get time off to teach instruments through the Boys and Girls Club’s Hal Leonard Young Musicians Program. With the support of NAMM and the Boys & Girls Clubs of America, this program has been emulated nationwide.
Also new this year, Hal Leonard began sponsoring the national music therapy organization Guitars for Vets, donating the Hal Leonard Guitar Method for use as the official instruction book at the 25-plus chapters across the country, and providing gift certificates for participating veterans to the company’s GuitarInstructor.com website.
Though he himself lasted only a semester in college, higher education is important to Mardak, as well. Hal Leonard awarded its inaugural Jazz Scholarship to a deserving student selected by the national the Jazz Education Network (JEN). The company awards annual scholarships for worthy future music teachers at both Winona State University in Winona, Minn. and VanderCook College of Music in Chicago. Finally, Hal Leonard provides financial support to the ASCAP Foundation, which also awards scholarships to music students.
The company contributes substantially to the Milwaukee Ballet, the United Performing Arts Fund, and to the Wisconsin Foundation for School Music, the Civic Music Association of Milwaukee, Early Music Now, Music for All, Piano Arts, and Present Music. Currently the company is sponsor for the Milwaukee Symphony Orchestra Pops series.
Mardak is intrinsically linked to Milwaukee. When it’s brought up that he’s had several opportunities during his career to move to other places, he scoffs: “How could you leave the [Green Bay] Packers? And we have the [Milwaukee] Bucks and Brewers!” Morton confirms that Mardak has been a season ticket holder of at least one sports team during the entire time he’s known him. That said, since 1995 Mardak has had a place in the “slightly” warmer city of Phoenix, where he and his wife Mary spend winters.
A Passion for Motivating
Jim Clark has been president of the Boys & Girls Club of Greater Milwaukee (currently taking the reigns as president of the national organization). He has known Mardak for eight years. “Keith was on the committee that hired me, and he was a driving force and big reason why I came to Milwaukee,” Clark says. “He is an awesome individual with a passion for motivating. He’s been helpful in every possible way.”
Clark says he’s always been impressed with his willingness to put in so much time for his interests considering his time-stressing obligations of running an international company. “But he brings that business sense, energy, and focus to this non-profit which has helped us tremendously. He doesn’t have to. He doesn’t have to be involved. But we service the most challenged kids in Milwaukee, and he wants to give them every opportunity for success.”
Clark notes that while typically high-level executives like to dedicate their time to high-profile aspects of a charitable organization, Mardak is happy to get involved with any aspect he thinks he can help with. In one instance, a simple small real estate deal got his attention and he saw that it was carried out to the organization’s advantage.
Gleason of the Milwaukee Symphony Orchestra says that Hal Leonard isn’t that well known in the city and she has been amazed to learn all that the company is. “I admire so much what he’s done and the labels and brands he’s consolidated,” she says.
She, too, confirms that Mardak is not content to sit on the sidelines.
“Keith brings his business acumen to the Symphony and has been a leader establishing collaborations,” Gleason says. “He’s been the lead in underwriting our pop series and has a real interest in keeping the Symphony healthy.” She notes that he understands stewardship, and when he gets involved with something, it moves forward. “He’s always fair and never overbearing though. He’s reasonable, but also quick and to the point. He’s also not afraid to ask challenging questions which we’ve come to really appreciate.”
Since getting involved, the Symphony is in notably better shape. “Thanks to Keith and others, we’re better off,” Gleason says. “Keith insists that we be successful. He’s told me that this community deserves a great orchestra and we better make it happen!” she laughs.
The Accidental Publisher
Keith Mardak was born on April 3, 1940, and raised in working class neighborhood on the South Side of Milwaukee. Like his older brother Don, he was afflicted at an early age with accordion lessons. “I started it at age eight and by the time I was in high school, I didn’t want my friends to know I played and wanted to quit, but my mother wouldn’t let me,” he laughs. Like his brother, he studied with the great Carl Elmer.
At age 17 he enlisted in the U.S. Coast Guard Reserve and served in 1958. When he came home, he started teaching accordion part time at an accordion store his brother and some friends started in 1954. After a short stint in college, he apprenticed as a mechanical draftsman at the Allis-Chalmers Company where his father had worked. There he was eventually assigned to the nuclear power division in Greendale, Wisconsin.
Meanwhile, Don would buy out his partners, change the name of the store from the Accordion School of Champions to Mardak Music, and end up with four retail stores around town. In 1961 Keith quit his drafting job and went to work at his brother’s retail operation, but a few years later, financial challenges forced Don to sell and Keith returned to drafting. But music was still a passion and he continued teaching accordion nights and on the weekends.
Don would go to work for Zeb Billings, whose piano and organ operation was booming. Billings sold Keith an organ, and after a few lessons, Keith started teaching organ. He laughs and recalls that accordion teachers got $2.50 a half hour and organ teachers received $4 – a hefty raise indeed.
In 1965, Billings “got into the print business by accident,” Mardak says. “In 1963 he came up with the idea of offering a $100 free music package with the sale of every organ. The package included eight free lessons valued at $3 each, plus $76 worth of music from Hal Leonard, which helped him to sell more organs. But the competition could easily match that, so Zeb came up with a new unique package, one that was exclusive to his operation. Zeb gathered several of us together to explain his idea. He wanted us to create individual song sheets that together would have a retail price of $76. We bought a contraption called a Music Writer and we created 110 arrangements.” Billings then “gave away” $24 worth of free lessons, thus having a $100 package that none of his competitors could duplicate.
Billings had three organ franchises — Thomas, Wurlitzer and Gulbransen. Later that year, Joe Benoron, the head of Thomas Organs, invited several of his most important dealers to a sales conference in Puerto Rico. During the course of the meeting, each dealer explained to the others how they sold organs and Billings presented his package. It cost Billings about $10 a pack to print so he quoted them a price of $20 each. He walked away with orders for 2,000 packages, making $20,000 profit by virtually doing nothing but calling his printer
Billings then visited each of his organ suppliers to see if they would buy the rights to the course, pay him a royalty and supply to their dealers. All rejected the idea. Zeb even traveled to Winona, Minnesota and met with the Hal Leonard to see if they would be interested in publishing the course. They passed as well.
“Then in the fall of 1964, Zeb attended a Wurlitzer sales conference in Chicago,” Markdak says. Near the end of the meeting, the Wurlitzer Hobby Lesson course was introduced, which was a box of sheet music along with instruction manuals, which was basically Billings’s exact program. “They took Zeb’s idea and he was very upset so he decided to go into the publishing business on his own. My brother and I put the songs from the original pack into an educational sequence and wrote corresponding instructional manuals. This debuted at the 1965 NAMM show and was a big success.” Shortly after the show, Mardak would leave his drafting position to work for Billings’ new publishing company full time, taking a $100 a month pay cut to do so as he was so passionate about music.
The next year Hammond wanted their own course, but one that included pop hit songs. Hammond agreed to purchase 20,000 courses at $20 each. “Quite a large order for an upstart little company,” Mardak remarks. “Hammond wanted to include 36 popular copyrighted songs and we had no idea how to license them. I would call publishers and say we want to buy their songs for an organ course and they’d hang up on me!” he says, adding that being young and from Milwaukee didn’t garner a lot of respect or enthusiasm.
Billings then sent Mardak to New York to try to secure some song licenses. At first he got nowhere. “Finally, I went to the office of Frank Loesser’s Frank Music on 57th Street, told the receptionist I wanted to license songs for a project, and that I had $12,000 to spend as an advance. She told me to take a seat and a short while later she escorted me into the office. I explained that I needed 12 songs for our course and had a budget of five cents per song or 60¢ per course. At 20,000 courses, that amounted to $12,000.” They agreed and then opened the door to other publishers including Mills Music and Irving Berlin Music Publishing.
“Once the Hammond Organ Course was completed, Hammond saw good sales increases. In a short period of time, virtually every other organ manufacturer, including Lowrey, Thomas, Baldwin, Kimball and Conn, wanted a course. I also met with Yamaha in 1967 and negotiated to create a course for them as well.”
While Keith gives Billings a lot of credit for being a creative innovator, he admits they butted heads. And as Mardak had already developed a clear business sense, he was not comfortable with the feast-or-famine atmosphere of Billings Publishing. He recalls many fond memories, including interaction with Billings’s wily son, Greg, today a Steinway Dealer in Florida. “Zeb would come to me and say, ‘You have to talk to this kid, he won’t listen to me! You have to tell him to cut his hair, and not drop out of high school!’ So much for my advice… Greg is very successful today.”
A New Twist
In 1970, Keith, his brother Don, and Art Jensen, who were all with Billings Publishing at the time, decided to go off on their own and start a music publishing company. After exploring several options for financing, they met with the owners of Hal Leonard Publishing with a proposal: with some seed money they would set up a sub-company called Learning Unlimited that would focus on the booming organ business and the growing audio-visual teaching movement, creating books with cassette tapes for the guitar and band instrument markets. The three founders of Hal Leonard bought into the idea of Learning Unlimited and after much deliberation, allowed the three to set up a new office in Milwaukee. The start date was July 1, 1970.
“When we left Zeb Billings, there were 35 employees and sales were approaching $4 million per year,” says Mardak. “It was difficult leaving Zeb because he was a great mentor to all of us and of course, Zeb was quite upset. In fact, he didn’t speak to me for years. In 1978 I received a phone call from Zeb asking me to get together because he wanted to ‘get something off his chest.’ We had breakfast, he yelled at me, and we made peace.”
The new Learning Unlimited upstart took off. Jensen started working on the audio-visual courses for guitar and the band instrument market and they were quickly able to conclude a deal with the Kimball Organ Company to create a new organ course for them. “One by one, we went head to head with Zeb’s company creating new courses for all of the other organ manufacturers. In a few years time, Learning Unlimited was merged into Hal Leonard and Learning Unlimited became a brand name. The three of us became minority shareholders in Hal Leonard.”
Don left Learning Unlimited in 1974 and Art left in two years later to start Jensen Music Publishing. Hal Leonard continued to grow in the late ‘70s and by 1980, sales were up around $10 million per year. Hal Leonard became an acquisition target, a sought after company.
Chappell Music Publishing had exited the print business in 1976 but decided that they should be back in the business since they were the largest publisher of songs in the world. They approached Mardak about the possibilities of selling the company and he told them that the three owners were unlikely to sell but might be open to a buy-in by the right company. On January 1, 1981, Chappell acquired 50 percent of Hal Leonard Publishing. “This changed the completion of the company because we suddenly had many pop songs at our disposal for our many new publishing projects and it also put us squarely into the pop music print publishing business. Chappell had important artists like Barbra Streisand, Jimi Hendrix, The Bee Gees and composers George Gershwin, Cole Porter and others. We had a nice growth period and started to do deals with other music publishing companies to represent their songs in all aspects of music print.”
In 1984, Chappell’s parent company, PolyGram, decided to sell Chappell. Mardak approached the Hal Leonard owners with the proposition that we should consider buying Chappell and the one-half owned by PolyGram. They asked what’s the price tag and I said “only” in the $100 million range. They decided not to participate but gave the “green light” to Mardak to go on my own.
Mardak hit the streets and tried to raise the money himself. He had some interest, plenty of intrigue, and volatile wheeling and dealing. Ultimately, “we raised $104 million but lost the bidding contest to another group so one half of Hal Leonard was sold to new owners along with the Chappell catalog.” Putting deals this size together takes a lot of time and through the course of the negotiation with the new owners, it was decided that they would not acquire the 50 percent of Hal Leonard that was held by PolyGram.” I went back to the three ‘wise men’ and suggested that we buy our 50 percent back. We now had a company doing $16 million in sales, had a long-term license on the Chappell catalog and had the rights to many other catalogs as well. The older gentlemen opted not to but gave me the go-ahead to try to acquire the other half. In short order, I learned that it is impossible to buy one half of company without using the company’s money to leverage the acquisition.” Finally, it was agreed that the original founders would sell their shares to Mardak enabling him to also acquire the PolyGram shares of Hal Leonard. “I decided to invite top management in the company to participate with me in a minority ownership basis. We all mortgaged everything we owned, borrowed money from our parents and as much as our individual banks would lend us and on the first day of 1985, we were the new owners of Hal Leonard Publishing.”
Acquisitions and Consolidations
Mardak had become a close friend with his banker, Tom Fritsch, who had opened a new commercial office in Milwaukee for Norwest Bank. “In 1986, the opportunity to acquire the print rights to the G. Schirmer catalog came up. Here we were, in deep debt, but the first year was showing pretty good sales results. I went back to Tom to ask for more money.”
This started a long list of opportunities, “too good to pass up” that continues to this day.
In 1987, Hal Leonard had the opportunity to acquire the Rubank catalog. Following that acquisition, Art Jensen was ready to sell his company, and Jensen returned to Hal Leonard with his company. “In 1991, Cherry Lane wanted to change distributors and in that process, we acquired half of that company and became its distributor.” Finally, in 1992, Billings was ready to sell his company. “In the mid-80’s, Zeb invented the Sound Storybook and had a tremendous, successful sales run. He was selling that portion of his business to Western Publishing and he wanted to retire. We purchased his music publishing assets.”
During all of this, and considering he had just had his first child, did he ever thing the risk was too great? “No, it never crossed my mind.”
“The deals find you,” he says. “We’re not out there chasing things.”
To this day, the deals continue to find them, including branching out and distributing products like Blue Microphones and Olympus recorders. “In my opinion, I’ve put together the best team in the industry,” Mardak states. “Our president is Larry Morton and how do you top that. We have V.P.’s Dan Bauer, Joe Burzinski, Emily Crocker, Mindy Czaplewski, Tom Fritsch, Rick Fuhry, Jerry Grochowski, David Jahnke, Herman Knoll, Doug Lady, Paul Lavender, Jeff Schroedl, Richard Slater, Nancy Ubick, Rick Walters and most important of all, my wife Mary Vandenberg who I’ve worked with since 1973. I would never have gotten this far without her.”
Looking forward, he notes that the print publishing has always been changing, but recently the changes seem more dramatic. In 1997, they pioneered electronic sheet music downloads with SheetMusicDirect and are producing Apps for hand held devices.
Reflecting on his career and his position in the industry, he’s proud of what the team has done. “Our educational business is strong. We have the number one band method, the number one guitar method, and the number one string method. You don’t get that for free. It’s quality product with great authors out there holding clinics. Anybody can put out another guitar method, but its finding the right authors and then convincing teachers to switch to yours that makes it pay off.”
“It’s a great honor to receive the Don Johnson Award,” Mardak says. “Don was a terrific guy. I once got to go to a Boston Red Sox game at Fenway with him. And this award in his name has honored some great people in the past. Any time you receive an award like this it’s gratifying.”
“[Mardak’s] defining characteristic is he’s passionate about everything he does,” Morton says. “Whether it’s business or Boys and Girls Club, he brings his ‘A’ game to everything. I’ve never seen him do anything that’s not 100 percent. And he’s gotten the employees together – getting employees involved like this is part of the Hal Leonard culture.”
“When he speaks, everybody listens because he delivers whatever he’s presenting with a real passion and a level of confidence that is significant,” Clark says.
For Morton, business-wise, many might not realize that it’s far from just about the bottom line, that Mardak is a musician’s musician. “He appreciates great musicianship and is really informed – he can go deep in any era or genre.” Proving that those outside his immediate circle appreciate this, Morton points out how incredible it is that a print publisher received induction into the Songwriter’s Hall of Fame as he was in 2010. “This is a business award that normally goes to an artist or manager, not a print publisher. But he’s a songwriter’s best friend, and through his many books and collections a song’s popularity is perpetuated.”
Mardak: “We’re believers in the community, believers in the arts.”