When then-Warner Music Group chairman Robert Morgado elevated Doug Morris to the top spot at Warner Music U.S. last July, it set into motion a series of resignations by top executives, who quit in protest of Morgado’s passing-over venerable music chieftain Mo Ostin for the post.
Elektra Entertainment chief Bob Krasnow left the company and Warner Bros. president Lenny Waronker declined the elevation to the label’s chairmanship as Ostin’s replacement and has been working out an exit agreement ever since. Other less high-profile execs also hit the bricks.
Though many of the execs who remain at the labels within the Warner Music Group were placed there by Morris – who was abruptly fired June 21 by Warner Music chairman Michael Fuchs – most industry insiders doubt the execs of the new guard will react like their mentors and give notice.
But it won’t be because of a dearth of offers, as several Warner Music execs at ground zero have had job offers come as part of the telephone calls offering solace about the Morris firing.
But contracts and non-compete clauses could keep the execs on the music biz sidelines for years, so for now taking a wait-and-see attitude appears the order of the day.
“It’s not like the old-timers who are already jillionaires and can afford, both from a financial and reputation standpoint, to resign in protest over a management decision,” says a rival label captain. “The so-called new guard have large salaries, even larger mortgages and have yet to hit their stride in the business. They can’t afford such a noble gesture.”
And despite Fuchs’ promise that there would be no further changes in the management ranks of his labels, most execs in the Warner Music family continue to watch their backs.
The quickest way to show profit is to cut costs. And given Fuchs’ reputation for trimming an organization’s fat, many in the industry feel the top-heavy Warner Bros. Records is likely to already be in Fuchs’ crosshairs.
Though the label is widely viewed as an artist-friendly environment, music biz insiders suggest its management structure has too many chiefs, with each overseeing his own fiefdom.
Warner Music Group insiders assert that Fuchs would like Warner Bros. Records to adopt a more lean and mean approach, following perhaps the Geffen Records model, where significant profits are eked out of a small number of acts, and execs do double duty, such as A& R and product management.
Such a suggestion would hit Danny Goldberg, chairman of Warner Bros. Records, particularly hard, as the likable Goldberg has spent the past several months reestablishing the label in the creative community as the preeminent home for artists while rewarding longtime label execs with promotions.
“This is not going to be a Morgado redux,” says a competing label prez. “If Fuchs wants cuts, you can bet there will be cuts. A palace coup, like the one Morris led last year, isn’t going to work this time.”
Many believe that although Fuchs has assumed Morris’ title and job description, it remains likely that a second-in-command will eventually be named.
“Regardless of what he may believe, he can’t do it all,” says a rival label chief. “He’ll have to put someone at the top whom artists respect and admire, and who is clearly not a corporate animal.”
Fuchs is prepared for such criticism.
“HBO is as good an organization as there is in the industry,” Fuchs says. “And I stand by that record. Let them look at (Warner Music Group) a year from now.”