Waronker Likely to Get Nod at Warner

The management mystery at Warner Bros. Records is close to being solved. Chairman Mo Ostin is expected to extend his contract through 1996, with President Lenny Waronker getting added responsibilities in an opportunity to prove he’s capable of succeeding Ostin.

Waronker, a former producer best known for his creative skills, will get a new title such as chief executive, sources say. The legendary Ostin will stay on as chairman, but with less autonomy. As part of the deal, Ostin has informally agreed to report to Warner Music Group Chairman Robert Morgado, after previously answering only to Time Warner’s chairman.

People close to the discussions say Morgado had planned to travel to Los Angeles to begin formalizing the agreement two weeks ago, before the earthquake struck. While the company declined to comment, it’s expected that contracts will be signed soon. Ostin supposedly told colleagues recently that he’s “one trip to New York away from a deal.”

Industry sources see the restructuring as a way to ensure continued stability at Warner, after months of speculation about possible management upheaval. Ostin, known for turning Warner into an industry powerhouse during his long reign, was rumored to be close to retiring or taking over Disney’s Hollywood Records late last year after Morgado insisted on a direct oversight role at the label, whose roster includes Tom Petty, Prince, Color Me Badd and Eric Clapton.

At 66, Ostin has agreed to stay on at least partly to ensure a smooth transition for the 52-year-old Waronker, according to associates, who say Ostin may decide to leave before the contract extension expires if everything falls into place.

Yet sources say that’s by no means assured. While Waronker is popular and shares Ostin’s close personal ties to label standard bearers such as Clapton, Neil Young and Madonna, he is not known for possessing the same business savvy. He must also convince Morgado that he’s capable of attracting the kind of young talent that keeps a label energized.

“Mo wants him and has stood behind him all the way,” said one well-placed source. “Morgado’s still not sure if he can do it, but he wants to give him a shot.”

One reason for Morgado’s skepticism, sources say, is that Waronker remains something of an anomaly in executive circles. He began his career as a producer at his father’s Liberty Records, and made his name with his work on behalf of such leading 1970s-era singer-songwriters as James Taylor, Paul Simon and Randy Newman, a childhood friend.

Ostin tapped him as Warner’s president in 1982, when the industry was in a sales slump, and together they rebuilt Warner into the industry’s most consistent label. But Waronker remained in Ostin’s shadow.

Colleagues say that’s partly due to his painfully shy personality. One describes Waronker as the record industry’s answer to Woody Allen, saying, “He’s not exactly an ‘up’ guy.” In a 1989 interview, Waronker himself said: “I’m not your typical record executive. I’m not much of a boss in the traditional sense. Every time I try to do it, it feels weird.”

Another associate says Warner’s “patriarchal” system discourages recognition.

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“Lenny is a very astute judge of talent, a very hard-working guy,” the source said. “But there’s a little black hole of responsibility between him and Mo. No one can see who’s really calling the shots.”

Adding to pressure on Waronker, once he takes on more management responsibilities, is the strong performance of other labels in the Warner Music Group family.

Atlantic Group has become known as a stable for promising young acts with the success of the Stone Temple Pilots and the recent hiring of Danny Goldberg as president. Interscope has also had a hot hand under Jimmy Iovine, with rap artists Dr. Dre and Snoop Doggy Dogg.

Warner, by comparison, has been criticized for putting too much stock in aging artists such as Clapton and Rod Stewart, even though the label continues to rack up strong sales. Interscope’s Iovine is consistently named as the likely replacement candidate if Waronker fails his tryout.

Industry sources also wonder how much influence Time Warner Chairman Gerald Levin will have on the process, since his management style is more corporate than that of former Chairman Steven J. Ross.

“It was a lot more of a family operation when Steve was there,” said one executive. “I don’t know if there’s still room for a nice guy like Lenny at Warner.”

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Reality bites Hollywood: While their problems pale next to those of the homeless and destitute, many Hollywood executives remain badly shaken by the Jan. 17 earthquake. Business still seems to be running in slow motion, and many people admit to being distracted by thoughts of more destruction. That’s unusual for a town that tends to distrust reality. But as one mogul said, “there’s no getting around this one. Everyone was scared to death.”

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Vocabulary update: A new term has entered Hollywood’s ever-evolving lexicon. “PP-ing it,” is not a scatological reference. It’s an allusion to anyone flying on a private plane. As in, “So, are you PP-ing it, or flying commercial?”

Times staff writer Chuck Philips contributed to this report.