Heads To Roll At Warner

It’s head-chopping time at Warner Music Group. Seagram scion Edgar Bronfman Jr. officially takes over the record giant today – and that means layoffs for hundreds in New York, including some prominent show biz honchos.


“It’s scary and sad,” a Warner Music exec told the Daily News yesterday.
The tense situation at the home of Madonna, Sean Paul, Linkin Park, Mettalica, and Twista has begun to breed dissent between Bronfman and his biggest backer, buyout firm Thomas H. Lee, sources said.

They may be at odds over the extent of the cuts needed to wring big profits out of the operation. While former Seagram chief Bronfman is used to doing things his way, now “Thomas Lee runs the show,” an insider said.
The investors are looking to cut at least $225 million in annual expenses.
The new Warner bosses, Bronfman and his Warner U.S. chief Lyor Cohen – the rap kingpin who used to run Island Def Jam – are expected to hand out pink slips next week.

Roger Ames, the chairman of Warner Music Group, has been offered a new, less powerful job that would put him in charge of international operations.

But many expect the wealthy music vet to turn the offer down.

Also seen as vulnerable: Atlantic Group chief Val Azzoli. But other Warner music big shots are expected to do well under the new regime.

Jason Flom, son of famous corporate attorney Joseph Flom, is a keeper, insiders said. Flom heads Lava Records and has catapulted chart-topping acts like Sugar Ray and Matchbox 20. He’s close with Cohen and is likely to get an expanded role at the music giant.

Also tight with Cohen is Atlantic co-president Craig Kallman. Kallman’s on a hot streak with rapper Twista, Sean Paul, and fast-rising metal band The Darkness meaning he’ll likely stay as well.

But insiders were less certain about Elektra chief Sylvia Rhone. She has several years left on her contract and might be offered a new job but with less power that may not be to her liking.

Rhone, one of the few women in power in the music biz, has lately been touting her wins, including a 20% rise in profits last year.
Warner Music’s two New York-based labels, Atlantic and Elektra are expected to be scaled back significantly with operations like finance put under one roof.


Today’s official takeover of Warner Music marks Bronfman’s big attempt at a show biz comeback. He struck a $2.6 billion deal to buy the music giant from Time Warner in November after failing in a bid to acquire Vivendi’s show biz units last summer.


Source:New York Daily News