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Levin would not comment on the debate last week, but there were signs that the chairman was backing off his hard-line posture, at least to some extent. During the discussion of rock lyrics at last month's stockholders' meeting, Levin asserted that "music is not the cause of society's ills" and even cited his son, a teacher in the Bronx, who uses rap to communicate with students. But he talked as well about the "balanced struggle" between creative freedom and social responsibility, and he announced that the company would launch a drive to develop industry-wide standards for the distribution and labeling of potentially objectionable music.
The 15-member Time Warner board is generally supportive of Levin and his corporate strategy. But insiders say several of them -- notably Luce, former U.S. Trade Representative Carla Hills and former baseball commissioner Fay Vincent -- have echoed Bennett's concerns in conversations with Levin. "Some of us have known for many, many years that the freedoms under the First Amendment are not totally unlimited," says Luce. "I think it is perhaps the case that some people associated with the company have belatedly come to realize this."
One key figure in the debate is Richard Parsons, the former chairman of Dime Bank Corp. who was named to the No. 2 position of Time Warner president last October. Parsons, an African-American and a Republican, is reportedly trying to persuade Levin to make some accommodation that would defuse the issue. But company insiders say a more important move may have been the replacement in May of Warner Music chief Robert Morgado with Michael Fuchs, Levin's longtime colleague at HBO. Company sources say Fuchs' appointment was at least partly motivated by Levin's perception that Warner's fiercely independent music labels needed a stronger boss who could lead the way to developing tougher standards. The speculation from one well-informed source is that Levin and Fuchs may be preparing for a subtle U-turn in company policy on rap: first pursuing the new set of standards Levin mentioned at the annual meeting, then inviting in recording artists, producers and executives to answer a few critical questions: Do they in fact have standards of decency? What are they? What if anything is over the line? After that could come an explicit code of behavior for artists and distributors-and a retreat from some of the more egregious offenders. The process may well be slow and deliberate, if only to make sure the desired results stick.
Meanwhile, company sources happily volunteer the information that rap music represents only a small slice of Time Warner's total revenues: $85 million last year, about 2% of the $4 billion that the music division generates and an even tinier fraction of Time Warner's $15.9 billion in annual revenues. Translation: if the company were forced to scale back on rap, the bottom-line impact would be minimal.