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Clash of the Titans: 10 Days in the Music Wars : Pop music: The Warner Music Group dispute between Robert J. Morgado and Doug Morris threatened to tear apart a lucrative, successful operation.

November 14, 1994|CHUCK PHILIPS and ROBERT HILBURN | SPECIAL TO THE TIMES

Ahmet Ertegun, the legendary co-founder of Atlantic Records, leaves his Manhattan brownstone most weekdays just before noon for the 10-minute ride to his office at Time Warner headquarters in Rockefeller Plaza.

Ertegun--whose signings over the last 47 years range from Aretha Franklin to Led Zeppelin--had a different destination in mind, however, when he slipped into the back seat of his chauffeured Mercedes sedan on the last Thursday in October.

The goateed record titan directed his driver to an apartment building overlooking Central Park West, where seven colleagues, all top executives in the Warner Music Group, were secretly meeting. With clouds gathering over Manhattan, they paced anxiously--each grasping a cellular phone--awaiting the outcome of a showdown at Rockefeller Plaza between their boss, Doug Morris, and his boss, Warner Music Group Chairman Robert J. Morgado.

The faceoff, which had all the earmarks of an old Western shootout, was for control of the domestic division of the $5.4-billion Warner Music Group--a Time Warner subsidiary whose chief assets include the Warner Bros., Elektra and Atlantic labels.

For the Record
Los Angeles Times Tuesday November 15, 1994 Home Edition Calendar Part F Page 3 Column 4 Entertainment Desk 1 inches; 26 words Type of Material: Correction
Warner Records CEO-- In Monday's Calendar story about the recent upheaval at the Warner Music Group, the surname of Warner Bros. Records president and CEO Lenny Waronker was misspelled.

The executives in the apartment, all Morris allies, were prepared for an unprecedented palace revolt that could paralyze the world's largest record company. They were ready to sacrifice their jobs in what would have been the most dramatic exodus ever in the record business. Already, top-selling Warner artists such as R.E.M. and Neil Young were threatening to jump ship over the turmoil. The rebellion had even forced the involvement of Gerald Levin, chairman of a massive empire that includes Time magazine and the Warner Bros. movie studio.

For three tense hours, Ertegun huddled with the team that recently had been established to guide the company into the 21st Century--a firm whose artists, from Jimi Hendrix and the Doors to Madonna and Prince, have helped shape global pop culture for three decades.

To those in the budding insurrection, Morgado and Morris represented vastly different agendas. Morgado symbolized a new breed of boss--a "corporate suit" brought in to impose strict business practices in an industry where success depends on creative instinct. A former chief of staff to New York Gov. Hugh L. Carey, Morgado, 51, has been described by colleagues during his 10-year tenure at Warner Music as a brilliant but insensitive strategist. Morris, 54, was a music man--an industry veteran and former songwriter who had been trained at Ertegun's side over the past two decades.

The battle was being closely monitored at rival companies, where executives also were concerned about increasing corporate encroachment and their ability, if any, to fight it. At the same time, these competitors were practically salivating at the prospect of Warner Music crumbling apart.

After an anxious morning in the Central Park apartment, Ertegun and company returned to their offices at Rockefeller Plaza. Shortly before nightfall, they learned that the music men had won: Morgado had caved in. Morris had full autonomy to run the labels.

"This isn't the first time in the history of the music business that executives have argued in the back room," the 71-year-old Ertegun said last week. "In moments of emotional outburst, people can say all kinds of silly things to each other that they wish they hadn't said afterward. The important thing is that the music division is now united and moving forward."

In the days that followed, other Warner executives attempted to publicly downplay the incident. Morgado even joked about it in a speech to an industry gathering in Santa Monica, saying press accounts of the Warner tumult made "Bosnia look like Shangri-La."

Privately, however, nearly a dozen senior Warner executives recounted the 10 days in which Warner Music came perilously close to imploding.

*

To the average fan, nothing matters but the music--the next album by their favorite artists. But the record industry, which was pioneered by free-spirited individuals who followed their instincts and passions, has become a corporate battlefield where all that matters is power.

Robert Morgado exercised his power in July, infuriating top officials by promoting Doug Morris, formerly head of the Atlantic Group, to run Warner's American music division. Rather than report to Morris, who some viewed as Morgado's pawn, two legendary industry figures stepped down--Mo Ostin, chairman of Warner Bros. Records, and Robert Krasnow, chief of Elektra Entertainment.

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