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U Music Group picks new leaders

Sources say Larsen in as int'l chief; Morris fills worldwide prexy slot

In a move designed to set the stage for the future leadership of the Universal Music Group in the post-Polygram merger era, Jorgen Larsen has been tapped to oversee the international operation of the soon-to-be combined music companies, according to sources.

Larsen is expected to be named chairman/CEO of Universal Music Intl. and will report to Doug Morris, Universal’s worldwide chairman/CEO, whose being given the reins of the megacompany was anticipated (Daily Variety, May 12).

Both nods are expected to be confirmed this week and could come as early as today.

The ascensions trigger the exit of Polygram worldwide prexy/CEO Alain Levy, who is not being given a role in the new entity.

Levy, who will leave with a hefty eight-figure severance package, is expected to announce his ankling in tandem with the Morris and Larsen nods.

Sources said Morris and Larsen will assume their new posts upon the closing of Universal parent Seagram’s $10.6 billion acquisition of Polygram. The deal is not expected to close for several months and still must pass regulatory muster.

The appointments of Morris and Larsen would mark the first major moves by Seagram toward reorganizing the ranks following the announcement of the proposed merger.

Seagram chief executive Edgar Bronfman Jr. has said that though there would be overlap among the combined companies’ 16,500 music employees, Seagram hopes to save up to $275 million to $300 million a year after cost cuts. More than 1,000 layoffs are expected, industry sources said.

The Larsen move bodes well for the international arms of both conglomerates, as industry insiders noted the industry vet and current prexy of Universal Music Intl., possesses the rare combination of having strong talent ties in addition to being a well-rounded businessman.

Insiders note that Larsen, who has been prexy of UMI since 1993, has operated individual record outposts in key international territories before joining UMI and knows the quirks of the business, which will be helpful in identifying growth areas in Polygram’s already strong overseas operation.

Larsen, who will have Polygram’s international regional directors who previously reported to Levy report to him, is also versed in such hot-button issues as transshipping and treaties, in addition to being familiar with other hurdles he vaulted while growing Universal’s international operation from four overseas subsidiaries to 31.

He is also credited with doubling UMI’s sales over the past three years by translating U.S. repertoire into international successes by such acts as No Doubt and Beck while developing the international potency of Rosana and Denmark’s Aqua, which boasts worldwide sales of 10 million albums and is gaining Stateside momentum through the efforts of MCA Records execs.

Giving the worldwide rein to Morris — and Levy’s ouster — further validates the success the Universal Music Group has had under the aegis of the well-liked and respected Morris, who like Larsen and Bronfman, is also a songwriter.

In just three years, Morris, UMG vice chairman Mel Lewinter and prexy Zach Horowitz have transformed UMG from an also-ran in the shadow of such titans as Warner Music and Sony to one of the first stops for dealmakers and artists. The Morris-led UMG boasts more than $1 billion in sales.

Morris and Lewinter have also proven they are record men as well as industry “suits” by making the nearly three-year-old Universal Records one of the industry’s most successful startup labels and home to Chumbawamba and Billie Myers.

Combining Universal Music Group with Polygram creates the leader in total album market share with a more than 23% ranking, followed by Sony’s more than 20% and Warner’s nearly 18%, according to share data for the period ended June 7.

The deal also gives UMG an instant, full-service international arm. It no longer has to rely on its pact with BMG for overseas distribution, which expires next year.

A Universal spokesman declined to comment on the Morris and Larsen nods.

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