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The biggest behind-the-scenes news in the music industry these days concerns the recent $10.4 billion merger of two corporate behemoths, Polygram and Universal Music. The Universal Music Group--the handle placed on the enterprises' joint assets--is now the biggest label on the planet, bar none. But because the overseers of this Orwellian monster are still answerable to stockholders, they have a vested interest in eliminating duplicative services at the companies now under their umbrella. As a result, a handful of once-powerful imprints--A&M and Geffen among them--are now little more than names on letterheads, and most of their employees are now wearing pink slips. Moreover, the word has come down that the artist rosters of these companies will be hacked by as much as 80 percent. And last week, the knife fell on Denver's 16 Horsepower.

The band, whose most veteran members are David Eugene Edwards and Jean-yves Tola, was inked to A&M in 1995 and issued an impressive full-length, Sackcloth 'n' Ashes, for the company the next year. Rapturous reviews failed to lift the disc's U.S. sales above the anemic level, but Europeans proved far more susceptible to Sackcloth's charms, turning it into a sizable cult hit. This pattern was repeated for the group's follow-up CD, 1998's Low Estate, produced by PJ Harvey associate John Parish. However, A&M remained committed to the combo. Its pact with A&M only guaranteed two albums, but the firm picked up its option for a third last October, even though rumblings about takeovers and blood-lettings were already in the air. "It was great," Tola says. "And they said that no matter what happened with the merger, we would be fine."

Not quite. The musicians made plans to start cutting a new platter with local studio veteran Bob Ferbrache and engineer Victor Van Vutt, who works closely with Nick Cave and Mick Harvey; according to Tola, "We were going to do two weeks of pre-production in Colorado starting in the middle of January and then start recording on February 1." But just as Tola was about to head back to Denver (he's currently living in California), A&M was shuttered amid rumors that very few acts on the label would be retained by the incoming regime.

Given these circumstances, Tola was mildly surprised at the content of his first conversation with Tom Whalley, a high-ranking executive from the Universal Music Group. Instead of unsheathing his sword, Tola says, "he told me, 'We just finished dealing with all the personnel, and now we're going to start dealing with the bands. We have to listen to them all and make up our minds who we're going to keep.'" In reply, Tola mentioned the recording schedule and asked for a quick decision, which Whalley promised to provide. Two days later, one of the few surviving A&R staffers with whom 16 Horsepower had worked phoned and told Tola that Whalley and other bigwigs wanted to see the outfit live prior to determining its future. Tola promptly set up a showcase on March 9 at the Bluebird Theater. But after first agreeing to fly out for the gig, Universal reps decided the date wouldn't work for them and asked Tola to await further instructions. Then, on February 9, the death knell was sounded. "This guy we knew from being in the band-relations department at A&M told me we'd been dropped," he says. "He told me he did it because he didn't want me to hear the news from a stranger."

Tola is putting the best face on this situation. "It's a big relief, actually. Of course, there's a downside for any band to be dropped, but overall it allows us to start afresh and be free of any debt. And since A&M picked up the option on the third album, we should be able to get a little bit of money that will help keep the band's finances going until we find out what's going to happen."

To that end, Tola and others in the 16 Horsepower orbit are already putting out feelers to other labels, and several have let their interest be known. Current plans call for the performers to gather in Denver in mid-March to make a demo tape of new material that will then be shopped to indies and majors alike. (The group may also play a live show or two during that period, but nothing has been confirmed.) "I think the ideal situation for us would be to sign with a major label for Europe and the rest of the world and then try to get an indie label just for the U.S.," Tola notes, adding, "It's important for us to do this as soon as possible, but we will not rush into the first deal that comes along." If a decent contract isn't offered--and given the volume of groups flooding the market, one might not--Tola hints that the players may release an album on their own.

Meanwhile, Tola wants to reassure fans that 16 Horsepower isn't out of gas. "Ask Denver to be patient," he says. "We're not dead; we're just on hold. And we're trying to get everything going again."

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