Record Makers Listen to Ostin Rumors

Would Mo Ostin abandon Madonna for Mickey?

That’s the question that refuses to die, more than a week after rumors first surfaced that the legendary Warner Bros. Records chairman might migrate to Disney’s Hollywood Records.

High-ranking sources say Walt Disney Co. Chairman Michael D. Eisner has held substantive discussions with Ostin over the possibility of a multimillion-dollar deal. But others say it’s more likely the 66-year-old Ostin, who is in contract renegotiations, will retire if he leaves Warner, whose rich talent roster includes Madonna, Prince, Color Me Badd, Paul Simon and Eric Clapton.

Warner Music Group has come under increasing pressure in recent weeks to resolve the futures of Ostin and other executives at the Warner Bros. label, to calm the waters both at the label and within the music community, where Warner needs to project an image of stability.

People close to the entertainment giant expect an announcement within weeks, even if the issue is not fully resolved. At the very least, sources expect Warner to anoint an eventual successor to Ostin, who has successfully led the label for more than two decades. The only serious candidate so far is Warner Bros. Records President Lenny Waronker. Others mentioned but not approached include Interscope Records’ Jimmy Iovine, Giant Records’ Irving Azoff and the former Virgin records team of Jeff Ayeroff and Jordan Harris.

“They have to make it at least look like things have been worked out, and they may try to do that,” said one Warner source. “But it’s not that easy.”

Ostin is revered in music circles for turning Warner Bros. into a record industry powerhouse, largely on the basis of his business savvy and commitment to artist development. His most recent deals included long-term contracts with Madonna and Prince, two staples of the company.

Speculation over Ostin’s future is largely fueled by longstanding reports that he is at loggerheads with Warner Music Chairman Robert Morgado. Ostin is the only label chief who reports to Time Warner Inc. Chairman Gerald R. Levin in New York.

Warner refuses to budge on its demand that Ostin report directly to Morgado under any agreement to extend his contract, which expires in 18 months. One reason for the urgency: Morgado wants the new chain of command to begin immediately. Ostin, who was very close to the late Time Warner Chairman Steven J. Ross, is said to view that as a threat to his autonomy.

Some see Morgado’s demand as an effort to force Ostin’s hand. Besides the personalanimosity between the two, sources say that Morgado feels that Warner Bros.’ recent performance compares unfavorably to that of another in-house music division, Atlantic Group, which boasts such hot new acts as Snoop Doggy Dogg and Stone Temple Pilots.

Ostin discussed his future with company executives in New York this week. While there was no substantive progress made, sources say influential entertainment figures such as Clint Eastwood and Barbra Streisand have recently lobbied Levin on Ostin’s behalf. Warner recording artists with close ties to Ostin include Simon, Clapton and George Harrison.

People close to Ostin say he wants to stay if he can do so without losing face. “He has a private jet at his disposal, and one of the best gigs in the world,” said one person who speaks to Ostin regularly. “But let’s face it, there’s also ego involved.”

As the Warner talks continue, the Hollywood Records rumor persists. Some executives completely discount the idea, based on Ostin’s history of stability and Hollywood’s problems getting established.

“Mo doesn’t need the money or power,” said one executive. “He’s 66 years old. He has a palatial estate. It’s hard to believe he’s going to go work for somebody. Mo’s next job is sitting around the pool, unless he wants to stick it in the face of Morgado.”

Others, however, say Ostin might accept the job largely as a way to tweak Warner if it refuses to meet his demands. While neither Disney, Warner nor Ostin would comment, Eisner could have trouble matching Ostin’s salary, said to exceed $4 million a year.

One scenario has Ostin, his son, Michael, and Waronker all moving to Hollywood after a major Warner Bros. shake-up. Hollywood has been without a leader since August, when Peter T. Paterno left after four years of failed efforts to make a success of the label. Ostin was said to be one of the first people Eisner turned to for advice when Paterno left.

Wes Hein, Hollywood’s executive vice president, is running the company in the interim.

The label’s recent releases include soundtracks to “The Three Musketeers” and “Sister Act 2,” but it’s still looking for its first breakout act.

Is Ostin capable of creating rock n’ roll magic a year past standard retirement age?

“He’s healthy, he works out and he feels good,” said one friend. “So why not?”

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Mixed Signals: Daily Variety this week reported that Columbia Pictures has discouraged director John Singleton from using rapper-actor Tupac Shakur in his next picture, because of Shakur’s two recent brushes with the law.

But that hasn’t stopped the company from promoting Shakur’s previous work. In a glossy pamphlet for Academy Awards voters, he is touted as best supporting actor for his role in “Poetic Justice,” Singleton’s latest film.