A power struggle that broke out this week in the executive ranks of the Warner Music Group seemed to abate late today, with Doug Morris emerging as a winner over his boss, Robert J. Morgado, the chairman and chief executive of the group, the world's biggest record distributor and the most profitable arm of Time Warner Inc.
Company executives said that Mr. Morris, who in July was put in charge of the company's three record groups, Warner Brothers, Elektra and Atlantic Records, had a showdown with Mr. Morgado this week because he was not allowed to run the labels as he saw fit. At a meeting on Wednesday with Time Warner's chairman, Gerald M. Levin, Mr. Morris was said by executives to have threatened to quit if he had to continue reporting to Mr. Morgado.
But late today, Mr. Morris said he had ironed out his differences with Mr. Morgado. "Happy days are here again," said Mr. Morris, who built the Atlantic group into Warner Music's biggest label before becoming Mr. Morgado's No. 2. "After a series of tense meetings, we have figured out our roles and how to handle any overlap. I now have the authority to grow the group like I grew Atlantic."
As a symbol of his new power, Mr. Morris has a new title. Until today he was president and chief operating officer of Warner Music U.S.; now he is chairman and chief executive.
In an oddly worded four-paragraph statement released at the close of business today, Mr. Morgado denied rumors of dissension within Warner Music Group and said he had asked Mr. Morris to work at Warner Brothers Records' headquarters in Burbank until a new chief executive was named.
The group's chairman, Mo Ostin, and its president, Lenny Waronker, the group's top team for 12 years, are expected to leave the label. In referring to Mr. Morris, Mr. Morgado used the new title, but never announced that it had been changed.
Mr. Morris and Mr. Morgado have also resolved two other contentious subjects, according to other executives close to the situation. Rob Dickins, chairman of London-based Warner Music U.K., whom Mr. Morgado had favored to succeed Mr. Ostin as head of Warner Brothers Records, will not be offered the job. Mr. Morris, who is said to have objected to the selection, said he would announce his choice as a label head next week.
But his first priority, he said, is to buy the 75 percent of Interscope Records Inc. that Time Warner does not already own. Music executives say that Mr. Morgado had objected to the price of Interscope, one of the biggest start-up successes of the decade, with acts like Dr. Dre and Snoop Doggy Dogg. Its value has been estimated at $300 million to $400 million and both Sony Records and Polygram are said to have made offers to Jimmy Iovine, cofounder of the label.
Currently, Interscope, which is based in Los Angeles, is part of Atlantic Records, which along with Elektra has headquarters in New York. Warner Brothers is based in Burbank, Calif.
But executives at Warner Music doubt that Mr. Morris and Mr. Morgado have truly worked out all their differences. "This is going to be a fight to the death," one Warner Music executive said. "No matter what kind of rubber-band, face-saving fix they put on this, there is no trust between them. This is far from a stabilizing development. Artists are't going to sign to a place with this much political infighting."
After Mr. Waronker's surprise decision this week not to succeed Mr. Ostin as chairman of Warner Brothers, several artists, including its biggest, R.E.M., have expressed nervousness about staying with the company.
