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DISNEY RECORDS: NO MICKEY-MOUSE OPERATION

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Walt Disney Co., flush with the success of its filmmaking and theme-park operations, is forming a major new record division designed to lead the company into the mainstream of recorded music.

In creating the new division, Disney is mimicking the strategy it used to become a leading producer of box-office movie hits.Disney, which had its origins in children's animated films, became a leader in the mainstream film industry after creating Touchstone Pictures in 1984. Touchstone produced films for teenage and adult audiences that had grown away from the Disney label.

The company has long had a niche in children's records through its Walt Disney Records, but it said the new division, tentatively called Hollywood Records, would be separate.

"It's a $7 billion industry, and we certainly see being a part of it. It would fit into our other businesses very well," said Disney spokesman Erwin Okun.

Disney named Peter Paterno, a prominent music industry attorney, as president of the new division.

Disney chairman Michael Eisner "has had an interest (in recorded music) going back to his days at Paramount," Okun said. "It was a matter of finding the right individual to get us into that business."

Finding the right person was key to starting the division, Okun said, because an executive who is respected and trusted by recording artists is essential to the success of the venture.

Music clients represented by Paterno, who has been with the Los Angeles law firm of Manatt, Phelps, Rothenberg & Phillips, include Guns 'N' Roses, Metallica, Delicious Vinyl and Enigma Records and producer Rick Rubin.