Arista Boots Reid...

[New York Daily News]

Arista boots Reid

By PHYLLIS FURMAN
DAILY NEWS BUSINESS WRITER

Music honcho Antonio (L.A.) Reid, who catapulted chart-topping acts like OutKast, Pink, Avril Lavigne, Toni Braxton and TLC, has been forced out of money-losing Arista Records.

Reid got the word of the big shake-up yesterday morning from his boss, BMG chairman Rolf Schmidt-Holtz.

In the afternoon, the flamboyant music producer was seen packing boxes in his office. He is said to have had a year-and- half left on his multimillion dollar contract.

The move comes as BMG gets ready to merge with rival Sony Music. It is looking to cut costs and consolidate its labels.

But BMG sources said Reid's ouster would have come even if there were no Sony union on the horizon because Arista had been losing big wads of cash.

Losses reached an estimated $100 million last year as Reid spent lavishly to put CDs on the charts. He took the fall after a number of releases from highly-paid artists, including Pink's latest album, "Try This," bombed.

A big spender from the start, Reid took hundreds of employees on a retreat in Puerto Rico when he first took over Arista three years ago.

"Operating losses were significant and it couldn't go on," an insider said.

Reid's exit will be the first of many in the coming weeks as a series of music deals leads to a high-powered game of musical chairs.

Music honcho, Lyor Cohen who heads Universal Music label Island Def Jam, is being courted by Seagram scion Edgar Bronfman Jr., for a "serious position" at Warner Music. A Bronfman spokeswoman said he does not comment on speculation.

A decision on whether Cohen goes to Warner Music or remains at Universal is expected imminently.

And word floated yesterday that some Warner label chiefs, including Elektra boss Sylvia Rhone, might soon be exiting the music giant.

Reid, in turn, might be heading to Universal Music Group, possibly to start a new label.

Ironically, the Arista honcho is leaving just as one his biggest acts, OutKast, is No. 1 on the pop charts. OutKast is expected to shine at the upcoming Grammy Awards.

"We'll be getting a lot of thank-yous at the Grammys. OutKast will take Best Album," a source close to Reid predicted. "L.A. will be there," the source added.

In a statement, Schmidt-Holtz called Reid "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."

Reid declined to comment.

Reid was hired to replace legendary music man Clive Davis at Arista. BMG paid $100 million to acquire La Face Records, the label co-founded by Reid and his partner, songwriter Babyface.

The move, orchestrated by Schmidt-Holtz's predecessor Strauss Zelnick, set off a firestorm of protest from music execs and superstars, who believed Davis should have remained at the helm of Arista.

With Christina Coleman

NEWSFILE: 14 JANUARY 2004