WMG SEEKING COOPER’S LONG-TERM REPLACEMENT—REPORT

Warner Music has been quietly reaching out to music execs as it prepares for the eventual exit of Stephen Cooper, writes the N.Y. Post’s Claire Atkinson, who describes the Len Blavatnik hire as “a caretaker CEO” who is expected to turn the company over to his replacement. Sources tell her that 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.

As our own I.B. Bad explained months ago, Cooper, a turnaround specialist, is focused on cutting costs and slimming down the company, but is not in it for the long haul. What’s more, he’s doing double duty, running his own firm while he overhauls Warner.

Note: I.B. advances the story in a just-posted Rumor Mill item from his upcoming column, posting Friday morning. As he’s pointed out in recent months, one possible replacement is present EMI chief Roger Faxon.

As you may recall, Cooper had been brought in by Blavatnik as Chairman until he switched roles last August with 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 speculated to Atkinson.

All of this uncertainty at the top has also raised the question as to whether Lyor Cohen will stick around under new management. Cohen has yet to be offered a new deal 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. Meanwhile, Cooper is currently working on a new executive compensation plan that would more closely align pay with the company’s performance.

I.B. broke that news in his column posted March 9: “Rumors are flying that the WMG rulers are attempting to reduce costs by offering Lyor Cohen and his team of top executives bigger back-end packages based on performance in exchange for dramatically lowering their guaranteed salaries. Not surprisingly, the plan is going over like a lead balloon with these same execs.”

Cohen, who declined to comment to Atkinson, 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 told the reporter. 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 hinges on generating organic growth and potentially picking up smaller assets. He’d better get on the stick: In the first quarter, WMG’s revenue continued its long decline, falling 8% to $628 million, further increasing the chasm between the bunny and the big two, Sony Music and UMG.