Arista Bombshell...
[New York Post]
ARISTA BOMBSHELL
By TIM ARANGO
January 14, 2004 -- Arista Records chief executive Antonio "L.A." Reid got
the boot yesterday, though he garnered more Grammy nominations than any
other individual label chief last year.
Reid's exit comes as Arista, part of Bertelsmann's BMG music unit, continues
to bleed cash while pumping out the hits.
Arista lost about $110 million last year, according to people familiar with
the label's finances.
Reid was notified of his termination in a morning meeting yesterday with BMG
chief Rolf Schmidt-Holtz, and sources say the news did not come as a
complete surprise for Reid. Rumors of his exit have circulated in the
industry following BMG's plans to merge with Sony Music.
In a statement, Schmidt-Holtz said: "L.A. is one of the music industry's top
record men. His passion for working with and developing some of the world's
best artists is unparalleled. I sincerely wish him the best of luck in all
future endeavors."
A person close to the situation said Reid lacked "financial restraint and
financial responsibility."
This person mentioned lavish contracts for artists TLC, Toni Braxton and
Whitney Houston as examples of Reid's lack of financial discipline.
One music industry executive said, "L.A. is a great creative guy, but he
should not be responsible for running a business."
Last week Reid himself fired Mark Shimmel, Arista's senior vice president of
marketing and artist relations, after the two bickered over whom to blame
for the label's runaway spending, according to people familiar with the
matter. Laura Swanson, the label's publicist, is taking on Shimmel's
responsibilities.
Meanwhile, Larry Mestel, Arista's general manager and executive vice
president, will be acting president, reporting to BMG Chief Operating
Officer Michael Smellie.
Reid became head of Arista in May 2000, after the highly publicized ouster
of Arista founder Clive Davis.
After a public outcry over the change, Davis returned to the BMG fold. And
now Davis, head of BMG's RCA label, is enjoying the success of several hit
records stemming from the "American Idol" television series.
Reid has produced a steady stream of hits and broken such new artists as
Avril Lavigne, Pink and Outkast, whose recent album "Speakerboxxx/The Love
Below" garnered six Grammy nominations. In total, Arista collected 31 Grammy
nominations in 2003.
Reid's contract was due to expire in July 2005, sources say, and he'll walk
away with about $5 million.
Because of his creative abilities, Reid is likely to be a sought-after
executive for rival music companies. Sources say he has already met with
Edgar Bronfman Jr., who is heading a group that has agreed to buy Warner
Music, and Doug Morris, head of Universal Music, the world's largest record
company.
In November, Sony Music and BMG announced plans to merge, and the deal is
pending in front of regulators in the United States and Europe.
NEWSFILE:
14 JANUARY 2004
|
