[00:04.00]1997 Passage4

[00:07.54]No company likes to be told

[00:09.55]it is contributing to the moral decline of a nation.

[00:13.48]"Is this what you intended to accomplish with your careers?"

[00:17.21]Senator Robert Dole asked Time Warner executives last week.

[00:22.57]"You have sold your souls, but must you corrupt our nation

[00:25.94]and threaten our children as well?"

[00:28.85]At Time Warner, however,

[00:30.76]such questions are simply the latest manifestation

[00:34.10]of the soul-searching that has involved

[00:36.31]the company ever since the company was born in 1990.

[00:41.65]It's a self-examination that has, at various times,

[00:45.49]involved issues of responsibility,

[00:48.11]creative freedom and the corporate bottom line.

[00:52.45]At the core of this debate is chairman Gerald Levin,

[00:56.59]56, who took over for the late Steve Ross in 1992.

[01:02.34]On the financial front,

[01:04.05]Levin is under pressure to raise the stock price

[01:07.29]and reduce the company's mountainous debt,

[01:10.21]which will increase to $17.3 billion

[01:14.34]after two new cable deals close.

[01:17.97]He has promised to sell off some of the property

[01:20.69]and restructure the company,

[01:22.70]but investors are waiting impatiently.

[01:26.33]The flap over rap is not making life any easier for him.

[01:31.28]Levin has consistently defended the company's rap music

[01:34.91]on the grounds of expression.

[01:36.93]In 1992, when Time Warner

[01:39.85]was under fire for releasing Ice-T's violent rap song Cop Killer,

[01:45.50]Levin described rap as a lawful expression of street culture,

[01:49.83]which deserves an outlet.

[01:52.16]"The test of any democratic society,"

[01:54.87]he wrote in a Wall Street Journal column,

[01:57.40]"lies not in how well it can control expression

[02:00.74]but in whether it gives freedom of thought

[02:03.26]and expression the widest possible latitude,

[02:06.48]however disputable or irritating the results

[02:09.61]may sometimes be.

[02:11.53]We won't retreat in the face of any threats."

[02:15.35]Levin would not comment on the debate last week,

[02:18.48]but there were signs that the chairman

[02:20.17]was backing off his hard-line stand,

[02:23.10]at least to some extent.

[02:25.19]During the discussion of rock singing verses

[02:27.90]at last month's stockholders' meeting,

[02:30.83]Levin asserted that "music is not the cause of society's ills"

[02:35.56]and even cited his son,

[02:37.58]a teacher in the Bronx, New York,

[02:40.20]who uses rap to communicate with students.

[02:43.63]But he talked as well about the "balanced struggle"

[02:46.75]between creative freedom and social responsibility,

[02:50.49]and he announced that the company

[02:52.17]would launch a drive to develop standards

[02:54.69]for distribution and labeling

[02:57.49]of potentially objectionable music.

[03:01.13]The 15-member Time Warner board

[03:03.65]is generally supportive of Levin and his corporate strategy.

[03:07.68]But insiders say several of them

[03:09.80]have shown their concerns in this matter.

[03:13.04]"Some of us have known for many, many years

[03:16.06]that the freedoms under the First Amendment

[03:18.28]are not totally unlimited," says Luce.

[03:22.21]"I think it is perhaps the case

[03:24.03]that some people associated with the company

[03:26.65]have only recently come to realize this."