He's Tuning Up For New Venture
By Phyllis Furman

Stay tuned for Clive Davis' next show.

After hunting for a backer willing to put down $225 million to launch his new label, music industry insiders said Davis is down to three possible takers: Sony, Universal and even Arista owner BMG.

Ironically, while Davis feuded with BMG after being forced out of Arista, the odds are strong that he'll wind up striking a new deal with the German music giant, music sources said.

In recent days, BMG is said to have sweetened its offer, the sources said. Under one scenario, the former Arista chief would be allowed to take some artists with him, possibly Kenny G, Aretha Franklin and Barry Manilow.

"I'm hoping we can come to an agreement," BMG chief Strauss Zelnick told the Daily News.

But there's little chance BMG would allow Davis to take Whitney Houston, Arista's biggest female star.

As Davis works on a new deal, his stock in the industry couldn't be higher: Arista just finished a record year, with sales reaching $500 million. Under Davis' guidance, Arista artist Carlos Santana made a stunning comeback, sweeping this year's Grammy Awards.

Arista sings Reid's praises
By Don Waller

HOLLYWOOD (Variety) - Antonio "L.A.'' Reid has been named president-CEO of Arista Records, effective July 1. The appointment ends months of speculation centered on the hastened exit of Arista founder Clive Davis, whose contract expires at the end of June.

Reid most recently served as co-president of Arista joint venture LaFace Records, which he co-founded in 1989 with his longtime songwriting and record production partner Kenneth "Babyface'' Edmonds. "It is exciting,'' Reid told Daily Variety. "I've worked with Clive Davis for 11-1/2 years and it's been a wonderful learning experience. Having called Arista home for the past decade, I can't wait to come in and do my thing.''

Davis obliquely addressed his own much-talked-about future by declaring that he would be weighing "the very substantial offers we've received'' to create "an instant major record company'' that would "begin business in September.''

Edmonds, in turn, will enter into a joint venture agreement with Bertelsmann Music Group (BMG)-owned Arista to serve as CEO of his own record label, to be called Joe Lie Records.

The LaFace label, now 100% owned by Arista, will maintain its own imprint as well as its A&R and marketing-oriented offices in Atlanta. Recording artist-producer Sean "Puffy'' Combs' Bad Boy Records and manager Jim Guerinot's rock-oriented Time Bomb Records are part of the Arista family as well.

LaFace's roster includes such successful acts as TLC, Toni Braxton, Usher, Outkast, Tony Rich and the Goodie Mob who've combined to sell more than 50 million albums worldwide.

BMG Entertainment president-CEO Strauss Zelnick, to whom Reid will report, told Daily Variety, "Antonio Reid is one of the most talented and highly respected creative executives in the music industry today.''

Prior to founding LaFace Records, Reid and Edmonds -- who first worked together as members of musical group the Deele back in the '80s -- wrote and produced fistfuls of hits for Whitney Houston, the Jacksons, Bobby Brown, Boyz II Men, Paula Abdul and Sheena Easton, among others.

Aside from his work with Reid, Edmonds has written and produced dozens of hits for artists such as Mariah Carey, Madonna, Eric Clapton and Celine Dion.

The new label, Reid told Daily Variety, "is a great way for us to continue working together. We've been together for 20 years, and there's more to come.'' Reid addressed several questions that have been swirling around the Arista situation ranging from the potential fate of Melisma Records, Matchbox Twenty producer Matt Serletic's label (''Matt's very important to our future''), to the possibility of significant changes to the Arista artists' roster (''None that I know about; I did not come to Arista to watch all the artists walk out the door'').

"Arista is a music company, and I started out as a musician,'' Reid continued. "Even when Kenneth and I had LaFace, we welcomed new producers. We didn't want to do everything ourselves because that would have limited the company -- made us too one-dimensional.

"The first thing that drew me to the Arista label was the existing artist roster,'' Reid explained. "The second was the opportunity to work with -- and be mentored by -- Strauss Zelnick.''

He had kind words for the departing Davis. "I have the greatest respect for Clive Davis. It's going to be very tough filling those shoes, but I've got a great staff to work with and I'm looking forward to the challenge.''

Reuters/Variety

NEWSMAKER-Clive Davis-A record industry legend
By Derek Caney

NEW YORK, May 3 (Reuters) - In 1967, Clive Davis, then president of Columbia Records, was leading rock singer Janis Joplin and her band Big Brother & The Holding Company into a stark conference room as he prepared to sign her to a $250,000 contract -- an extravagant sum at the time.

Davis, whose extraordinary career in the record industry reached another milestone this week, told Joplin not to be put off by the austere surroundings and that the staff was indeed informal. At that point, a band member rose from the conference table to reveal he was wearing no clothes at all. "This is how informal we are,'' Joplin said with a laugh.

Joplin suggested that she and Davis consummate the contract by having sex but Davis declined. Instead, as he had with so many other music careers, he helped guide Joplin and her band to the top of the show business charts.

The story symbolizes the seismic changes Davis brought to the record business. He finds talent, spends freely, has a legendary ear for a hit single and makes friends and admirers.

On Tuesday it was announced that the 67-year-old executive would step down as head of Arista Records, the hit label he founded. Arista's parent, Bertelsmann AG(BTGGga.D)-owned BMG Entertainment, named rap executive Antonio "L.A.'' Reid to succeed Davis as president and chief executive of the label.

A boardroom battle over Davis' future with BMG has been going on for months and a BMG spokesman says Davis is still in discussions with the label regarding his future.

"Clive is one of the rare people in the business who's a music person,'' Arif Mardin, a record producer who has worked with Aretha Franklin, Phil Collins and others, told Reuters in an interview late last year.

Davis is credited for bringing Columbia Records into the rock 'n' roll market, signing Bruce Springsteen, Billy Joel and Chicago, as well as Joplin, during his six-year tenure.

Joe Smith, a former chairman of Capitol Records, was a vice president at Warner Brothers, Columbia's chief competitor, at the time and recalled, "We had a pretty potent management team at Warner at the time. And Clive was a single guy at Columbia and he was beating the pants off of us.''

Davis would spend extravagantly to attract the likes of Neil Diamond to Columbia. But he was also fired from Columbia for using corporate funds for personal use, and pleaded guilty to income tax evasion in 1975.

That year, he founded Arista Records, home to Whitney Houston and Barry Manilow. Last year, Davis shepherded Santana's album Supernatural to the top of Billboard's Top 200 charts for the first time since 1971. The album won nine Grammy awards, including two for Davis himself for his work as a producer.

He was also awarded the Lifetime Achievement Award by the National Academy of Recording Arts and Sciences at the Grammy awards in February and inducted into the Rock 'n' Roll Hall of Fame in the nonperforming category in March.

"This has been one of the most satisfying years of my life,'' Davis told reporters at the Hall of Fame Induction Ceremony in March. "I hope you all have as many options at the end of your career as I have in mine.''

When Davis joined Columbia at age 28 as an attorney in 1960, Columbia was the home to Tony Bennett, Andy Williams and Mitch Miller, a bandleader who was the antithesis of rock 'n' roll. When he became president in 1967, Columbia had only dipped its toe into the widening rock 'n' roll pool.

The label was home to Bob Dylan, as well as folk-rock stalwarts Simon & Garfunkel and the Byrds. But Columbia under Davis dove head-first into the music, signing the bands Santana, who had two No. 1 albums in 1970 and 1971 and Blood Sweat & Tears, who had three No. 2 hits in 1969.

Davis was not King Midas, however. In 1972, he would buy from Atlantic the contract of Delaney & Bonnie, a blues rock act with modest success, for $600,000. The group made one album that did not chart before splitting up.

In 1967, Aretha Franklin, who languished for seven years on Columbia without a hit, would defect for Atlantic where she would rule the pop and R&B charts into the mid-1970s.

Davis would eventually redeem himself, however, by signing Franklin to Arista in 1980, where she would hit the top 10 in 1985 with "Freeway of Love'' and "Who's Zoomin' Who.''

Throughout the years, Davis also acquired a reputation for a sizable ego. "He's certainly had his clashes over the years,'' Smith said. "And there are some people who will tell executives, 'Never get bigger than your talent.' That's not Clive.''

In 1983, Davis visited a Manhattan nightclub to see a 19-year-old singer named Whitney Houston. When he signed her, her lawyer Paul Marshall insisted on a "key-man'' clause, which stipulated that if Davis left Arista for any reason, Houston would become a free agent. Houston subsequently had a string of 19 Top 10 hits, 11 of which went to No. 1.