Whalley Decides to Return to Interscope

In a surprising turnaround, Interscope Records President Tom Whalley rejoined the wildly successful Westwood label on Monday, just three days after abruptly leaving with the intention of joining Walt Disney Co.

Whalley, who sources say had received a multimillion-dollar offer to revive Disney’s Hollywood Records division, reconsidered his options over the weekend and put in a call early Monday morning to Interscope co-founder Jimmy Iovine seeking to return as president, a position he has held since last year. By Monday evening, Whalley had signed a lucrative, five-year deal with Interscope that increases his annual salary and expands his equity position in the hot Westwood label.

“I received a very respectful offer from Disney, but after reviewing everything with my family and friends over the weekend, I decided to stay where my heart is--at Interscope, with the artists and friends at the company I helped build,” Whalley said Monday.

Last week, executives at competing firms questioned why Whalley would want to quit the most successful label in the business to join the most ridiculed.

Whalley’s sudden departure on Friday followed a marathon of unsuccessful negotiations with Interscope co-founders Iovine and Ted Field. Whalley, who never signed a new contract last year after being promoted to president, decided to jump ship after Interscope pulled its final bid off the table last week--a proposal that did not come close to Disney’s offer, which included an unprecedented multimillion-dollar signing fee, sources said.

Whalley, a highly regarded executive who signed such stars as the Wallflowers and Tupac Shakur, will return to running the daily operations at Interscope, which he has done since his promotion to president.