Prince signed expecting to release music at a faster cadence so he would have been out of his contract in about 4-5 years with stuff that was kind of sub-par even for Prince. Warner told him that wasn't going to happen as they needed to do marketing and that meant he wasn't going to get out of his contract until 10 years or so. This was the disconnect--Warner thought they locked Prince up for 10 years and Prince thought he was getting out in 5.
Prince, for all his brilliance, was really the one who screwed this one up--likely because of ego wanting "The Biggest(tm) Deal". He had a huge amount of leverage after "Diamonds and Pearls" and just negotiated poorly. It's not like Prince didn't understand the music business by 1991--he had been in it and complaining about it since the 1970s.