Arista: Steep Losses...
[New York Times]
Chief Executive of Arista Resigns Amid
By LAURA M. HOLSON
Published: January 14, 2004
LOS ANGELES, Jan. 13 - Antonio Reid, the studio executive largely
responsible for starting the careers of artists like Pink and Avril Lavigne,
abruptly resigned on Tuesday from Arista Records, where he had been chief
executive for nearly four years.
BMG, the global music division of the German conglomerate Bertelsmann, which
owns Arista, said it had no plans to replace Mr. Reid and did not elaborate
on his departure. But according to two music executives who have worked with
Mr. Reid, steep financial losses at the label were a factor.
Mr. Reid, who is known as L.A., has a reputation as an executive with a deft
eye for talent, having fostered the careers of stars like TLC and Toni
Braxton. But he was also known as a big spender, giving musicians generous
contracts and paying for lavish marketing campaigns and videos.
Mr. Reid did not return two calls to his office, and his assistant said he
was out of the office.
The chief executive of BMG, Rolf Schmidt-Holtz, said little about the
departure, issuing a terse statement that said of Mr. Reid: "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."
Mr. Reid got his start as a producer in Los Angeles and in 1989 co-founded
LaFace Records. He joined Arista in July 2000, succeeding Clive Davis, who
now runs RCA Records and J Records, Arista's sister companies at BMG.
Mr. Reid's breakout year came in 2002, when he seemed untouchable with young
stars like Pink and Ms. Lavigne, who eschewed the sugary pop of Britney
Spears and ruled the music charts. Several Arista artists, including Usher
and OutKast, won Grammy Awards for albums released that year.
But last year was trickier for Mr. Reid. According to two music executives
who have worked with him, the losses at Arista last year were too large to
dismiss. While OutKast remained a standout at Arista, earning six Grammy
nominations, blockbuster hopefuls like Whitney Houston failed to ignite
sales as projected. Her last album, "Just Whitney," entered the music charts
at No. 9 in late 2002 and did not muster much interest in 2003. Nor did
Pink's most recent release last fall, "Try This."
During the heady days of the music business, less-than-stellar performance
might be overlooked. But with music sales faltering, music executives are
beholden to more bottom-line-oriented corporate executives. Just last year,
Thomas D. Mottola, the longtime chief executive of the Sony Music Group,
left the company after that division suffered losses.
According to one person close to Arista, Mr. Schmidt-Holtz encouraged Mr.
Reid to review costs, particularly in light of the proposed merger of BMG
and Sony, which is being reviewed by European regulators. It is possible
that Arista could be merged into another label to save costs, though one
company executive said there were no imminent plans to do so.
It is unclear whether any of Arista's artists will also leave. But one music
executive said several artists were shocked Mr. Reid was leaving and were
upset that he would no longer be working with them.
14 JANUARY 2004