Marching To Morgado's Tune At Warner Music

The atmosphere at Warner Music Group's recent sales conference in Nashville was as rueful as any country-and-western ballad. Three days before the Aug. 18 meeting, Mo Ostin, the legendary chairman of Warner Bros. Records Inc., announced his resignation. Now, Ostin was delivering his farewell speech shortly after the very person who had hastened his departure: Warner Chairman Robert J. Morgado. "It was a very emotional event," recalls Danny Goldberg, president of Atlantic Records. "Everybody was crying."

Morgado says he admires Ostin, who built the Warner Bros. label from scratch into a powerhouse over three decades. But colleagues say relations between the two men were strained--in part because Ostin insisted on reporting to Time Warner Inc.'s late chairman, Steven J. Ross, and his successor, Gerald M. Levin. With Ostin gone, Morgado has consolidated his grip on the world's largest music company. "A lot of people had speculated whether Bob had full control over his label executives," says Michael P. Schulhof, chairman of rival Sony Music Entertainment Inc. "These latest moves clearly demonstrate he's running his own show."