Time Warner Inc., under fire for marketing violent and sexually explicit movies and recordings, is close to getting rid of one of its problems.
The giant entertainment company is in final negotiations to sell its 50 percent share of Interscope Records, the label that features such controversial "gangsta rappers" as Snoop Doggy Dogg and Tupac Shakur. Under the deal the company would sell back its stake in Interscope to label founders Jimmy Iovine and Ted Field, according to people at both companies.
"We're heading for an amicable divorce," a Time Warner source said. An executive at Interscope said an announcement could come in a few days. "We hope to God it happens," the executive said.
The sale of Interscope is likely to remove some of the public relations pressure on Time Warner, which was singled out for criticism by Senate Majority Leader Robert J. Dole (R-Kan.) in a speech in May. Dole specifically went after one Interscope rock group, Nine Inch Nails, for a song laden with obscenities and violent images.
Moreover, Time Warner's marketing of music that "celebrates rape, torture and murder" has been the target of a radio and TV ad campaign launched by former Bush administration official William J. Bennett, a conservative who is allied with C. Delores Tucker, the liberal chairwoman of the National Political Congress of Black Women.
Bennett welcomed the expected sale of Interscope yesterday, saying in an interview that Time Warner was "acting like a leader" by divesting the label.
"Once they got over the confrontation and the sense of being attacked and criticized, they sat down as businesspeople and as citizens," he said. "I congratulate them, they did the right thing. I hope this is a statement about a larger point -- that there are some things so bad that no responsible company will market and sell them to our children."
Interscope is a tiny portion of Time Warner's recorded music division, which had sales of more than $4 billion last year and dominates the current pop charts with almost twice the market share of its nearest competitor. The division's stars include Eric Clapton, Green Day, Madonna, and Hootie and the Blowfish.
Despite its small size, Interscope provided Time Warner with almost all of its most controversial rap recordings. The label also has several noncontroversial acts, such as Tom Jones.
It's still unclear under what terms Time Warner would sell its stake in Interscope, and which of the multinational companies that dominate worldwide music sales would be willing to take over distribution of Interscope's records. Time Warner paid $120 million for its 50 percent interest in Interscope, and has an option to purchase the balance.
Divestiture would solve a looming showdown for Time Warner: Its contract with Interscope prohibits it from refusing to distribute any Interscope-produced recording. Interscope is close to releasing a rap album by Tha Dogg Pound that Time Warner executives have said could stir up more criticism of the company but which Time Warner cannot refuse to carry without being in breach of its agreement with Interscope.
In addition to the criticism surrounding Interscope, Time Warner has been dealing with turmoil among its music division managers. Six top executives of the division have been forced out or left during the past 13 months, following disputes with Time Warner Chairman Gerald Levin and Michael Fuchs, the newly appointed president of the division.