In its first move since acquiring PolyGram for $10.6 billion, Seagram Co. is expected this morning to name Doug Morris as the future global chairman of the combined music entity--the largest record company in the world, sources said.
Morris, a highly regarded industry veteran who has run Seagram's Universal Music Group since 1995, is slated to take over the combined operations following approval of the deal by shareholders and regulators--a process that could take five months or more to complete.
PolyGram chief Alain Levy is expected to leave the organization with a multimillion-dollar exit package as early as next week, sources said. Polygram's parent, Dutch electronics giant Philips, intends to replace Levy with PolyGram Chief Financial Officer Jan Cook, who will act as interim chief of the corporation until the transaction is closed, sources said.
The decision to announce Morris as the eventual chairman is coming more quickly than many analysts expected. Indeed, it is unusual for a chief executive to leave his company before such a merger is complete. But Levy, who is rumored to have already been approached by several competing music companies, is said to be furious with the way Philips handled the sale.
Although no restructuring can begin until antitrust officials complete their review, the rest of Seagram's music hierarchy is expected to be hammered out in the weeks ahead with all record label chiefs ultimately answering to Morris, who, in turn, will report to Universal Chairman Frank Biondi Jr. and Universal President Ron Meyer.
Morris, a 59-year-old former songwriter who composed the Chiffons' 1966 "Sweet Talking Guy," is credited with transforming Seagram's once-dormant record division into a domestic rock powerhouse with the addition of his own Universal label and Interscope Records. Morris has bolstered the company's image and U.S. market share with a new management team and eclectic hits from such acts as Kirk Franklin, the Wallflowers, Sparkle, Erykah Badu, Chumbawamba, Garbage and the Cherry Poppin' Daddies.
Morris was hired by Seagram chief Edgar Bronfman Jr., after the executive was fired as domestic head of Time Warner's music division during a 1995 corporate power struggle in which nearly a dozen top Warner music managers ultimately lost their jobs.
Morris, who worked at Warner Music for 17 years and rebuilt its Atlantic Group into one of the most profitable in the record industry, got the boot just two days before he was scheduled to be promoted to Time Warner's global music chief. On the day of his termination, Warner Music dominated the nation's pop charts with almost two dozen albums in the top 50 and twice the market share of its nearest competitor.
Bronfman asked Morris to join the Seagram fold the week he was fired. Two months later, Morris opened Universal Records, originally called Rising Tide--a unique, $60-million joint venture with a diverse, multicultural staff and executive team. The label has gone on to become one of the most successful start-ups in the business, with Morris continuing to oversee it even after Bronfman hired him to run Seagram's entire music division.
As chairman of Universal Music, Morris was instrumental in convincing Seagram to buy Interscope after the Westwood label was dumped by Time Warner following a national controversy over rap music lyrics. Interscope went on to generate an estimated $300 million in revenue during the next year.
Morris' chief attribute, according to his peers, is his ability to discover and groom talented, young executives. Indeed, many of the most successful record chiefs in the business came up under his wing: Interscope's Jimmy Iovine, Elektra Entertainment's Sylvia Rhone, Mercury Records' Danny Goldberg and the entire executive team working under Val Azzoli at Atlantic Records.
At Universal, Morris' new management team includes Mel Lewinter, Zach Horowitz, Henry Droz, Kedar Massenburg, Jay Boberg, Jocelyn Cooper-Gilstrap and Jorgen Larsen--who may be tapped as future head of the corporation's international division.