Music Industry Contracts

R.E.M., the hottest free agent in the music business, signed a five-album contract Saturday with Warner Bros. Records worth an estimated $80 million--the largest recording contract ever awarded, sources said. The Grammy-winning band's deal surpassed the $70-million mark achieved seven months ago by pop diva Janet Jackson as well as other mega-deals by such superstars as Michael Jackson and Madonna, whose six-album pacts included film and joint venture record label components.

Analysts and shareholders aren't the only ones scratching their heads these days about the chaos at Warner Music Group. * Frustrated representatives for some of Warner's best-selling acts--including R.E.M., Stone Temple Pilots and Van Halen--are also concerned about the future of the $4-billion firm.

Rising Tide to Market Zero Hour Records: Rising Tide Entertainment Chairman Doug Morris signed an exclusive marketing and distribution arrangement with Ray McKenzie, founder of New York-based Zero Hour Records, home to such acts as the Dirt Merchants and 22 Brides. The move follows the opening last week of Rising Tide's Nashville office with country manager Ken Levitan at the helm.