Could Cohen’s Chute Collapse?
According to a report in today’s New York Daily News, Lyor Cohen “has been secretly developing a talent management company for the past two years while working at Warner”. The report goes on to say that Cohen “is so private about his new business venture that [an] insider says he only refers to his new company by a ‘nonsensical’ code name in emails and phone calls”.
The most obvious reason for all of the secrecy is that he was probably in breach of his WMG employment contract by using company assets like email, telephones, and company funds for wining and dining prospective clients, travel, etc, all under the pretext of conducting WMG business, while in actuality setting up a secret third party entity. According to a veteran Warner Music exec, “As a rule WMG employment contracts preclude employees from using company resources for personal gain. You can bet that ownership will not be too pleased with this and look upon it as a breach of contract. If they do, it could very well put a huge hole in Lyor’s golden parachute or even end up in court.”
Furthermore, according to the source, the possibility of breaches by other WMG employees could soon emerge. “It’s pretty well know that Lyor has a posse that he shares everything with and they could easily be implicated and accused of breach by assisting him.” It is widely known that Cohen has had a very long and close relationship with Atlantic Records chairman/COO Julie Greenwald. “It’s almost inconceivable to think that some of Lyor closest allies at Warner weren’t aware of his plans and didn’t help him in any way”, the source added. If true, there could be other heads chopped on the block–but with no severance.