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Time Warner Fires the Head of Its U.S. Music Division : Entertainment: Some say action may portend a move away from rap and rock. Warner Music Group denies it.

June 22, 1995|CHUCK PHILIPS and SALLIE HOFMEISTER | TIMES STAFF WRITERS

Time Warner Inc. on Wednesday abruptly fired the head of its U.S. music division--signaling a reassessment of the direction of Warner Music Group, the world's biggest record company.

In the latest in a year of tumultuous corporate shake-ups, Michael Fuchs, the recently installed chairman of Warner Music Group, terminated his chief lieutenant, Doug Morris.

The firing of Morris, a strong advocate of cutting-edge music within the company, was seen by some as a precursor to Time Warner distancing itself from controversial rap and rock music. Sources speculated that the company will soon sever ties with Interscope Records, the Westwood company that has released albums containing lyrics for which Time Warner has been criticized.

Morris, who was scheduled to be promoted in two days, is the fourth Warner Music veteran that Time Warner Chairman Gerald Levin has forced out in the past 11 months. The move stunned and distressed executives in the music industry but was warmly regarded by some analysts on Wall Street.

According to Fuchs, Morris' sudden firing was the result of internal management disagreements, not a reaction to increasing political pressure from those demanding that Time Warner stop distributing rap and rock music with violent and sexually explicit lyrics.

"It's true that Time Warner has been under intense pressure recently, but this decision had absolutely nothing to do with the lyric controversy," Fuchs said in a telephone interview from New York.

"It was about chemistry inside the company, and I had to make a profound change to ensure that this organization could grow. You know what they say--when a team is not working well, sometimes you fire the manager and it shakes up the ballclub."

Morris, escorted from Fuchs' New York office by security guards after the firing, could not be reached for comment. Levin released a short statement supporting the decision.

It was unclear why Fuchs thought Morris had kept the company from growing. The music division is dominating the nation's pop charts and had a record year. The $4-billion conglomerate, which includes Atlantic Group, Elektra Entertainment Group and Warner Bros. Records, has the best-selling album in the nation this week plus two dozen other albums in the Top 200, with almost twice the market share of its nearest competitor.

Indeed, Morris' performance in the United States was so highly regarded at Time Warner that the 54-year-old executive had been told that he would soon be promoted to second-in-command of the firm's global sector.

Time Warner's current success in the music business can be attributed largely to the artistic gambles made by label chiefs chosen by Morris, including Sylvia Rhone at Elektra, Val Azzoli at Atlantic, Danny Goldberg at Warner Bros. and Jimmy Iovine at Interscope.

None of the label chiefs could be reached for comment. Some sources speculated that Fuchs' decision to remove Morris could lead to further exodus of executives from the music division.

Fuchs said: "Doug is no longer here and the loyalty of these people should be to this corporation. I don't expect them to make an immediate transfer of loyalty to me. I'm not asking for that, but I want this company to have the discipline to speak with one voice and be headed in the same direction."

Morris was informed of his firing at a meeting in New York that Fuchs had scheduled to flesh out the details of Morris' promotion announcement. Sources said Fuchs handed Morris a news release announcing his termination and that security guards followed Morris back to his office at Time Warner headquarters, where they stood watch outside his door until they escorted him from the building.

Fuchs said all of the label chiefs will begin reporting to him immediately, as will Warner Music International, Warner Chappell Music Publishing and Warner's distribution unit.

"For the past six weeks, everybody has been asking me, 'What are you going to do?' " Fuchs said. " 'You're not a music guy. You can't pick hits.' But my goal is to get this organization in shape. That's what I bring to the party and I'm damn good at it. Warner Music might be a good company now, but you come talk to me in a year. I guarantee that I'm going to make it better."

Wall Street analysts seemed to applaud the move, though Time Warner's stock dipped slightly Wednesday as investors took profits from the run-up in the shares Monday after "Batman Forever" had a blockbuster opening weekend. The stock closed down 75 cents at $41.625 on the New York Stock Exchange.

Christopher Dixon, a media analyst at PaineWebber Inc., said: "It is clear that Fuchs has been successful in establishing controls at HBO. Now he's looking to align Warner Music with the rest of the Time Warner corporate culture."

Since their merger in 1989, the strait-laced culture of Time Inc. has clashed with the entrepreneurial bent of Warner Communications fostered by its late founder, Steve Ross.

Warner Music was perhaps the most extreme example of Warner's cowboy culture, with division heads running their businesses with little interference--or oversight--from the parent. The fact that the labels were so profitable--more than movies, publishing or television, and less capital-intensive than cable--only reinforced that culture.

That environment is expected to change under Fuchs.

Analysts and entertainment executives say Fuchs is adept at handling creative personalities and in cultivating relationships--a knack that should serve him well in the music business.

Morris' predecessor, Robert Morgado, took control of the music group in 1990 and left earlier this year after a power struggle with Morris.

Last year, Warner music executives Mo Ostin, Lenny Waronker and Robert Krasnow left the company after a power struggle with Morgado.

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