Musical chairs isn't for kids anymore: When they play the game in the record industry, it's a full-contact sport. Every time the tune stopped this past year, an even more bewildering tableau of calamitously rearranged executive swivel seats would appear. ''I've been in the business a long time,'' says Ed Rosenblatt, CEO of Geffen Records, ''and I can't remember anything like it, in this or any other business.'' Sony Music COO Thomas Mottola concurs, ''What's happened is an atrocity.'' A few highlights:
If it ain't broke, fix the hell out of it. This seemed to be Time Warner's motto in apparently wanting to systematically dismantle the management of the Warner Music Group, arguably the best-run music division in the industry and indisputably the domestic market-share leader. As Charles Koppelman, EMI's chairman, says, ''They broke up the Yankees.''
When WMG chairman Robert Morgado, a fierce bottom-liner, forced a new chain of command on Warner's artist-friendly label heads beginning in July 1994, the music biz witnessed a stunning domino effect: Elektra head Robert Krasnow quit, followed by Mo Ostin, Warner Bros.' beloved longtime chairman, and Ostin's lieutenant Lenny Waronker. And it didn't stop there — Morgado himself was ousted in May 1995; domestic-label chief Doug Morris was fired (which has become a subject of litigation) in June; and Danny Goldberg, Ostin's short-lived replacement, got replaced in August. ''There was good karma in that most of the bad guys are gone,'' says Waronker, now with Ostin at DreamWorks SKG.
Remarkably, new WMG head Michael Fuchs seems to have restabilized a severely demoralized division by installing Russ Thyret as the new chairman of Warner Bros. u Cream rises.again. There were few competitors who didn't want to resurrect martyrs Ostin and Waronker; even Warner asked them back. But David Geffen-who says he wooed them ''from day one'' — is a hard mogul to say no to, and their hire makes DreamWorks SKG the cool company, even with just one artist (George Michael).
The two, along with Ostin's son Michael, will get more autonomy than they've ever had. And Geffen will be around, not interfering, but pitching in to help clinch deals (he's already wining and dining Janet Jackson). ''I'm gonna be Mo and Lenny and Michael's...assistant,'' Geffen cracks.
Can we borrow a cup of sugar, and your entire upper management? MCA wasted no time nabbing departing Warner honchos Krasnow and Morris, who got joint-venture deals: Krasnow Entertainment and Rising Tide Entertainment, respectively. Former WB chairman Goldberg is rumored to be stopping by too. And Ostin/Waronker's DreamWorks SKG will be marketed by MCA-owned Geffen Records — reuniting some of Time Warner's most famous execs under one banner. There's widespread doubt that the old Warner Music magic can be reconjured via start-ups, but this is a petri dish to watch.
Sometimes, a divorce is best for everyone. Interscope Records had long hoped to buy back Time Warner's 50 percent stake; thanks in part to intense pressure on Warner to quit distributing controversial Dogg acts, Interscope regained its other half in a sweet deal. Less nervous companies are eager to distribute this lucrative hot potato; we'll see if they get scalded.
But for now, a happy ending. While Interscope's street stock rises further still, Warner has one less headache after an Excedrin year—at least till some gadfly notices the hardcore rappers remaining at its wholly owned labels.
—Chris Willman
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