Warner Music Group, controlled by billionaire Len Blavatnik, has been quietly reaching out to music execs as it prepares for the eventual exit of Stephen Cooper, a caretaker CEO who is expected to turn the company over to his replacement.
Sources say Blavatnik has been sending out feelers recently in search of candidates with both music credentials and operating expertise.
“They are looking for a creative who is a decent entertainment operator,” said one source.
Cooper has a reputation as a corporate turnaround specialist who continues to run his own firm while he overhauls Warner. Sources said he is focused on cutting costs and slimming down the company — but is not in it for the long haul.
Cooper had been Warner’s chairman until he switched roles last August with long-term Warner chief Edgar Bronfman Jr., who stepped down as CEO just two months after Blavatnik’s Access Industries completed its $3.3 billion Warner deal.
The next round of musical chairs could see Cooper return to the role of chairman, as opposed to an outright exit, sources said.
The looming change at the top has also raised the question as to whether Lyor Cohen, who oversees Warner’s recorded music division, will stick around under new management.
Cohen has not yet been offered a new contract and is working under his existing contract, which grants him $3 million in annual salary plus a $3.5 million bonus, according to Warner’s last proxy statement as a publicly traded company.
Cooper is currently working on a new executive compensation plan that would more closely align pay with the company’s performance.
Cohen, who declined to comment, is likely to wait until the plan is complete before he decides whether to stay.
“It was important for the new owners to get a sense of the business and the senior leadership team before any renegotiations,” one insider said.
Cohen’s prior incentives were tied to Warner’s stock price — a metric that no longer applies now that the company is privately owned.
Blavatnik’s growth plan for Warner, the world’s third-largest music major, hinges on generating organic growth and potentially picking up smaller assets.
Warner lost out to larger rivals Universal Music Group and Sony Entertainment Group in the bidding for EMI. Universal and Sony struck deals to split up and acquire EMI’s recorded music and music publishing businesses, leaving Warner to chase after the scraps in the event either sells assets to gain regulatory approval.
In the first three months of the year, Warner’s revenue fell 8 percent to $628 million. Universal’s grew 6.7 percent, to $1.28 billion, after accounting for currency fluctuations. Sony’s music revenue, which includes other subsidiaries such as publishing, fell 1 percent on an adjusted currency to $5.4 billion.