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.
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Resource(s):
New York Post
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