LA Reid: Hopes For Hit Parade...

Music CEO hopes for hit parade
Mon Apr 29, 6:08 AM ET
David Lieberman USA TODAY

NEW YORK -- Arista Records CEO Antonio ''L.A.'' Reid nods in rhythm to a majestic R&B ballad thundering BOOM-thuh-ba-BOOM-thuh from his state-of-the-art sound system as scented candles sweeten the air in his elegant Midtown office.

Nearly a dozen casually dressed young executives do the same, creating what appears to be a tableau of synchronized Bobble Head dolls.

But Reid, 45, and his colleagues are all business when the music ends.

''I can't find the hook,'' Reid says about the musical riff that can make a pop tune unforgettable. ''It's a good song to sing. But it doesn't have a hook. We'll pass on it.''

That's a big decision. Four of Arista's top-selling performers -- Whitney Houston, Santana, Toni Braxton and Aretha Franklin -- are preparing albums, possibly for this year, that could shape the rest of their careers.

Houston's first major release since 1998's My Love Is Your Love will show whether she is still a global megastar after she was stopped at an airport for marijuana possession and appeared unfocused and unhealthy at recent performances. Santana will show whether he just caught lightning in a bottle in 1999 with Supernatural, which sold 14 million copies domestically and 23 million worldwide.

They are counting on Reid to deliver the right mix of catchy songs, hot producers and corporate muscle to send them back up the charts. His feel for slick, contemporary R&B has helped launch 33 No. 1 singles since '89.

Yet, Reid also needs them to be hits, to shore up Arista's listless finances and to enable Reid finally to escape the shadow of Arista's legendary founder, Clive Davis.

Reid has wrestled with Davis' ghost since July 2000 when BMG, the music unit of German media giant Bertelsmann, made its shocking decision to push aside the founder of its flagship label. A lot of industry watchers thought BMG was crazy to replace an executive who had shaped hitmakers ranging from rockers Janis Joplin, Billy Joel and Bruce Springsteen to R&B divas such as Houston.

Many also wondered whether Reid had the business skills. The one-time musician, songwriter and producer came from a much smaller operation, Atlanta-based LaFace Records. He and partner Kenneth ''Babyface'' Edmonds, formed the joint venture with Arista in 1989 and scored a succession of R&B hits with Houston, Braxton, Usher, Pebbles (who was Reid's first wife) and TLC.

(On Thursday TLC's Lisa ''Left Eye'' Lopes was killed in a car crash in Honduras. ''No words can possibly express the sorrow and sadness I feel for this most devastating loss,'' Reid said in a statement. ''Lisa was not only a gifted and talented musical inspiration, but more importantly, she was like a daughter to me.'')

Starting from scratch

Davis didn't make the transition easy. He left to launch J Records, a venture with BMG, taking some of Arista's hottest prospects, including Alicia Keys, Next and LFO.

''I walked into a company that was a shell,'' Reid says. ''Many of the artists had left, and some of the executives had left. And I had to do a lot of work to clean it up. So my feeling was Arista was very much a start-up company.''

After months of turmoil, he got the label back on track with hits from Dido and acts he cultivated at LaFace, including Pink, Usher and OutKast. (BMG bought the 50% of LaFace it didn't own when Reid moved to Arista.) Arista is the No. 6 label -- behind Island/Def Jam, Interscope, Columbia, Epic and Warner Bros. -- with 4.4% of the market this year, up from 4.3% in the same period in 2001.

''He's much more involved in the creative process than a lot of other CEOs,'' says Roger Davies, who manages Pink. ''I find that refreshing. That's the way it should be. Artists feel comfortable in his presence.''

That can be important.

''Sometimes record company executives have to be therapists,'' Braxton says. ''All of us artists feel that our work is personal.''

But Reid knew it would take more than good relationships and vibes to rebuild Arista.

He quickly cut deals to rope in some of R&B's hottest producers and performers, including Edmonds, Jimmy Jam and Terry Lewis, and Kevin ''She'kspere'' Briggs.

Reid says he didn't have to break the bank. ''We bet on the back end, on the upside,'' he says. ''I bet on people who believe in themselves, so I don't have to overpay.''

Yet, he's struggling with a joint venture he inherited between Arista and Sean ''P. Diddy'' Combs' Bad Boy Records. It's said to be losing millions, and BMG wants out.

Reid declined to comment on the status of the arrangement or any of his business deals. That's in keeping with policy at Bertelsmann, which is privately held and doesn't report the financial performance of its record labels.

There's no question, though, that he has even more at stake in his deal with Houston. Her 2001 pact with Arista is said to guarantee her at least $20 million and perhaps as much as $75 million over several albums. That means Reid is taking about as big a risk as EMI did with Mariah Carey. After her 2001 release, Glitter, fizzled, EMI paid her $28 million to break its five-album contract.

''Whitney is pressure,'' says OutKast manager Blue Williams. ''You'd hate to have Whitney do what Mariah did.''

Reid insists that he feels no more stressed than usual. ''I have a lot riding on every release,'' he says.

But there's little doubt that Houston could have a big impact on Arista's bottom line, which ended up in the red last year. Faced with the turmoil at the label, plus an industrywide slump, Arista's revenue is said to have fallen to $217 million last year from $269 million in 2000.

''Arista did lose money in 2001. It had significant things to sort out,'' says BMG Chief Operating Officer Michael Smellie. With new releases due from its super artists, Santana, Sarah McLaughlin, Kenny G and Dido, ''It has plans to make money this year. So far, it's ahead of plan.''

Moving into the world of rock

Reid is trying to broaden Arista with more rock acts.

''He needs to get into the rock business,'' says Terry McBride, who manages Dido and Sarah McLaughlin. With his stable of divas and R&B acts, ''He's got two parts of the puzzle. Now, he needs the other pieces.''

To aid his cause, Reid bid hard for Adema, which includes the half-brother of Jonathan Davis from the hit band Korn. It's no wonder Reid was beaming this month at a dinner to celebrate Adema's first gold record.

Rock is ''a genre of music I hadn't had much success with, although I grew up with it,'' he says. ''These guys believed in me and believed in the team at Arista that hadn't been quite assembled.'' The photo of band members with their gold records ''is a finger in the eye of the industry.''

But Reid says he has no plans for music genres that don't turn him on. For example, the success of the O Brother, Where Art Thou? soundtrack won't have him hunting for bluegrass bands. ''I wouldn't touch it. I don't think that's honest. And one thing I am big on is that the music we put out has to be honest.''

He doesn't hesitate to reject honest content he finds inappropriate. ''Murder, that's over the line for me. I respect it, but I just can't do it. I'm into children. I'm a family man. I try to make sure records we release I'm comfortable to play for my children. We tend to be a little bit sexual. But we don't go overboard with violence, which turns me off, or over the top with profanity.''

Reid relishes his role as a businessman with golden ears. In that regard he says his role models include giants such as Atlantic Records' Ahmet Ertegun and Motown's Berry Gordy. In addition, ''I admire Clive Davis for his contributions.''

Financially, he says, ''I'd like to model myself after Mr. David Geffen,'' who became a billionaire after he sold his record company in 1990 for shares in MCA just before Matsushita bought MCA. ''David Geffen first and foremost because he has the big B.''



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