The first casualty in the corporate shake-up at Warner Music Group occurred Tuesday as Elektra Entertainment Chairman Bob Krasnow abruptly resigned. At the same time, Warner Bros. Records Chairman Mo Ostin indicated that he will remain in place under the new regime.
The future of both executives was called into question Monday when Warner Music Group announced a realignment that requires Ostin and Krasnow to report to former Atlantic Group Chairman Doug Morris, who was elevated to the top of Time Warner Inc.'s new domestic music division.
The realignment was orchestrated by Warner Music Group Chairman Robert Morgado, who is trying to stimulate business at the labels.
Sources said Krasnow--who masterminded the success of such acts as Metallica, Natalie Cole and Tracy Chapman during his 11-year-tenure--blamed his departure on his exclusion from the new corporate inner circle. A Warner Music Group spokeswoman confirmed that Krasnow resigned, but she declined to comment further. Krasnow, who is said to have had two years left on his contract, did not return calls.
The 59-year-old executive, widely respected for his keen musical ear and bold decisions, has been dogged recently by Elektra's lackluster chart and fiscal performance. Once the toast of the industry, the eclectic New York label has been sorely lagging behind its sister companies, Atlantic Group and Warner Bros. Records.