Flom Exits Atlantic

Warner Music Group continues to refashion itself in the image of recorded music boss Lyor Cohen with the recent ouster of Jason Flom as co-chairman/CEO of Atlantic Records Group.

WMG's East Coast label operation is now headed by chairman/CEO Craig Kallman and president Julie Greenwald, a pair of executives with strong roots in urban music and hip-hop—areas in which the company has long struggled, and that Cohen has been determined to turn around.

Kallman made a name for himself working with such acts as Aaliyah, Timbaland, Missy Elliott, Brandy and Junior M.A.F.I.A. Greenwald, a longtime Cohen ally, built her reputation working with such artists as LL Cool J, Jay-Z, DMX and Ashanti.

By contrast, Flom's A&R credits include Sugar Ray, Kid Rock, Tori Amos, Simple Plan, Skid Row, Twisted Sister, Matchbox Twenty and the Corrs.

Flom's departure comes amid long-rumored tensions with WMG management.

Sources say Flom was vacationing in Aspen when he was called to Los Angeles for a meeting with Cohen at the airport that led to Flom's Aug. 17 resignation.

That day, Atlantic held a town hall-style meeting featuring Kallman and Greenwald for all New York employees, to ease staff concerns.

In an internal memo to the Warner staff, Cohen called it his "sad duty" to announce Flom's resignation, describing him as "not only one of the industry's most talented A&R men, but also one of its leading entrepreneurs" who played a "critical role" in the restructuring of Atlantic.

In conjunction with his departure, Flom's imprint Lava Records—a joint venture between Flom and Atlantic—now becomes a wholly owned subsidiary of Atlantic. Sources say there may not be a cash buyout for Lava; control of the label in the event of Flom's departure is believed to have been worked out in the form of upfront money and/or equity shares when he negotiated his deal to become head of Atlantic.

Many in the industry are left wondering if Lava, home to Simple Plan, Cold and Uncle Kracker, has a future; at a time when Warner has been aggressively cutting costs, Lava may find itself without a champion in the WMG board room. A source close to Warner says no decisions have been made.

Meanwhile, suitors are already said to be lining up for Flom's services. The executive is expected to talk with Universal Records regarding a role with the company, sources say.

Flom was part of the initial management team assembled by Edgar Bronfman Jr. and WMG's private equity investors in the wake of their acquisition of the major label.

Some company sources suggest that WMG designed an admittedly