Why the Legendary Mogul Is Back : Q&A; with MO OSTIN

Mo Ostin, the most respected record executive of the last 30 years, looks as if he’s still on sabbatical from the music world as he sits in his lavish Pacific Palisades living room dressed in a T-shirt, jeans and sneakers.

Ostin, who quit the Burbank-based Warner Bros. label last year rather than surrender to corporate intrusion from parent company Time Warner, still bristles at the mention of what he calls the most disturbing trend in the music industry.

“It’s not healthy . . . this whole thing about more and more corporate control . . . more corporate managers who are more concerned about bottom line than they are about artists and music,� says the 68-year-old executive, who announced Thursday a new record company partnership with DreamWorks, the entertainment combine of Steven Spielberg, Jeffrey Katzenberg and David Geffen.

After Ostin left Warners on Jan. 1, more than a dozen corporations and investors tried to tempt him back into the business with lucrative contracts. Among them was Time Warner chairman Gerald Levin, who had approved a 1994 restructuring plan that drove Ostin out the door of a label whose roster over the years has ranged from Jimi Hendrix and R.E.M. to Madonn a, Paul Simon and Quincy Jones.

But Ostin and his management team--Lenny Waronker, former president of Warner Bros. Records, and son Michael Ostin, a former senior vice president of artists and repertoire at the label--held out for a deal that would guarantee the trio autonomy.

In his first interview since leaving Warner Bros. Records, Ostin, joined by Waronker and Michael Ostin, spoke about continued turmoil in Time Warner’s music sector, his own renewed enthusiasm and why he and his associates chose to go into business with DreamWorks.

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Question: How did you feel when Time Warner came back this year and asked you to forgive and forget?

Ostin: I couldn’t go back there, but I have to say that moment made me feel a certain vindication. You wouldn’t be human if you didn’t react in that fashion.

Q: Have you watched with fascination over the past 14 months as Time Warner ousted most of its top music executives, including Robert Morgado, the man who forced you out?

Ostin: I don’t think anybody could have possibly conjured up all that transpired at Warner after I left--not even the best fiction writer in the world. There is no way I could have anticipated all the bizarre things that happened at Warner in the past two years. But I have no desire to dredge up the past.

Life works in such strange ways. I was so down when I left Warners, but today I feel incredible. I’m invigorated and highly motivated. I guess I should thank the corporate people at Warner. They actually gave me a new lease on life.

Q: Why did you three decide to go with Geffen and DreamWorks?

Ostin: David is one of the great recruiters. He’s relentless. He never gives up, but we took our time. We wanted to examine our alternatives. We sat down and made a wish list of the characteristics we wanted a company to have. Money wasn’t the top item on the list either. Quality of life was. We were also concerned about the entire environment. The less corporate the climate, the better.

Q: What attracted you to DreamWorks, Lenny?

Waronker: I liked the fact that the word those guys used most frequently was quality --the idea that we could focus on creating something that was about quality, not totally profit-driven. Because in the music business, some of the most important signings and creative relationships you have don’t always pay great dividends in terms of bottom line stuff. But in the long haul, they pay tremendous dividends in developing your reputation as a company. I don’t think R.E.M., for instance, would have signed with Warner Bros. if we hadn’t signed Randy Newman and Neil Young and given those artists such support over the years.

Q: What about you, Michael?

Michael Ostin: We had one meeting in this house with David, Jeffrey Katzenberg and Steven Spielberg and you could feel the excitement between those guys. They were so exhilarated and they said something that really hit home. They said they don’t want to be Time Warner or some huge mega-corporation. They wanted to keep it small and be successful in their own way. Talent and creativity are the driving forces in their vision.

Q: Some people think it’s odd, Mo, that you are going into partnership with Geffen, because you were once such fierce competitors. There are still rumors about animosity between the two of you. Is any of that true?

Ostin: No. I have tremendous affection and admiration for David. It’s true that we’ve had fights over the years. There was even a point when we stopped talking to each other. But that was long ago. . . . David is a brilliant competitor and an astounding individual. Ask anybody in the business. David will be intricately involved with everything . . . strategic planning, policy-making, acquisitions and the signing of artists, and all the intangibles that only he can bring to a situation. We’re going to take advantage of that.

But it wasn’t just David that attracted us. At Warner Bros., we had a 10-year relationship with the whole staff at Geffen Records. We saw what they built and it was as cool and attractive a company as there was out there. They had very few releases, which also appealed to us. And yet their success ratio was fantastic. We feel we have a chance at DreamWorks to revive the original Warner culture and fuse it with what they did at Geffen.

Q: How do you define the original Warner culture?

Waronker: After you spend 18 years in the studio [as a record producer], you learn that if there is any magic in this business it always comes from the artist. A great musician not only makes great music, but their creation also makes the producer look good, the executive look good and the company look good.

The essential thing is to create an environment that helps the musicians do their best work. That’s the way we ran our label. I’m not a businessman in the normal sense. Somebody told me once that I ran the company as if I was producing a record . . . that I dealt with employees as if they were artists or engineers or musicians. And I love that analogy.

Q: One of the corporate complaints from Time Warner was that you guys resisted cutting the staff at Warner Bros. . . . that you were too loyal for your own good. What do you say to that?

Ostin: There is a humanistic side to being in business and that’s very important to us. . . . Yeah, we might have been able to slash some overhead and make a little bit more money. You can always do that if you’re a penny-pincher. But we didn’t look at the label in those terms.

Q: Lots of Warner artists rallied to your defense when you were being pressured to leave. Are you going to try to sign any of those acts now?

Ostin: Any act that is free of its contract is fair game, as far as I’m concerned. Our company is primarily about signing quality artists, people who have longevity. Part of our hallmark has always been to work with controversial artists . . . artists who were on the edge . . . artists who people thought were weird.