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Clive Davis Named Chairman/CEO Of BMG North America submitted by: Lisa D. source: Los Angeles Times, The Wall Street Journal, Hollywood Reporter, New York Post, New York Daily News Date: February 3, 2004 Clive Davis Promoted to BMG's U.S. Unit Chief The music executive will head a reorganized division four years after the firm demoted him. By Jeff Leeds, Times Staff Writer Clive Davis is having the last laugh -- again. Davis, 70, is taking charge of Bertelsmann Music Group's entire North American record division, a sharp turnabout for a legendary executive who only four years ago was all but driven out of the company. In his new role, Davis will preside over a broad reorganization of the division's three major record labels. He said Monday that he was ecstatic. "It's thrilling; it's emotionally very, very gratifying," he said. "The flowers don't stop coming in." Davis' appointment as chairman and chief executive of BMG North America had been expected since the ouster three weeks ago of Antonio "L.A." Reid as CEO of Arista Records, after lackluster financial results at the New York-based label, once one of BMG's biggest units. Davis' control will now reach beyond RCA Music Group, the BMG unit where he had been chairman, and will effectively put him back in charge of Arista, the label that he founded and sold to Bertelsmann in 1979. In addition, Davis will oversee Jive Records, home to such acts as Justin Timberlake and Britney Spears. And Davis' top lieutenant at RCA Music, Charles Goldstuck, will be promoted to chief operating officer of BMG North America. Davis' ascension marks the latest twist in the remarkable career of the man who discovered Santana and Janis Joplin. It also means that Bertelsmann has essentially undone almost every major management choice made by former BMG CEO Strauss Zelnick. Zelnick -- who once held the title Davis assumed Monday -- was the one who forced Davis out as chief of Arista in 2000, after Davis rebuffed demands that he name a successor. Zelnick then installed Reid, a Grammy-winning producer who had delivered a series of hits for Davis, to take over the label, which has been home to Whitney Houston and Aretha Franklin. Aiming to defuse the uproar Davis' ouster sparked among artists, songwriters and others, BMG's management offered him $150 million to start J Records, a joint venture label then consisting primarily of acts he recruited from his former Arista roster. Under Davis, J Records got off to a fast start, scoring three debuts on Billboard's Top 10 in less than eight months, including a breakthrough from R&B ingenue Alicia Keys. Meanwhile, in late 2000, Zelnick and then-BMG Chairman Michael Dornemann were shown the door amid fallout from the Davis dispute and other clashes with Bertelsmann leaders. In November 2002, BMG's new management brought Davis back into the fold, buying out his stake in J Records and merging it with RCA, and placing him in charge of the joint operation. Then, BMG fired Reid, who sources say had racked up heavy financial losses despite owning a top spot on the nation's pop chart with a double CD from rap duo OutKast. Reid is close to a deal to take over rival Vivendi Universal's Island Def Jam unit, according to industry sources. Davis and Goldstuck have been on a roll since taking over the joint RCA division. Last year, they revitalized the careers of a number of aging acts, including Rod Stewart and Annie Lennox, while delivering hits from such new acts as Maroon 5 and the winners from "American Idol." The BMG North America reorganization is likely to lead to the consolidation of several back-office operations. BMG declined Monday to discuss how many people might be laid off in the restructuring. Davis' promotion puts him in a better position if BMG's planned merger with Sony Corp.'s Sony Music Entertainment is approved by regulators. In fact, BMG's management structure now more closely resembles that of Sony Music, where a single executive, Don Ienner, an ex-Davis deputy, oversees all U.S. operations. Davis declined to discuss specifics about the future, but said he was looking forward to it: "You've got to be pretty jaded not to understand this is really exciting," he said. "This is a terrific shot." Veteran Music Executive Davis To Get Expanded Role at BMG By Merissa Marr Veteran music executive Clive Davis was named to an expanded role as head of North American music operations at Bertelsmann AG's BMG, where his new responsibilities will include overseeing the Arista Records label from which he was famously ousted four years ago. BMG is consolidating its music labels under one umbrella in North America and handing the role of chairman and chief executive to Mr. Davis, as it prepares to merge its recorded-music operations with those of rival Sony Corp. Mr. Davis already oversees BMG's RCA and J labels; his new duties will add oversight of Arista and Jive labels. The appointment of Mr. Davis, credited with launching the careers of hit artists including Janis Joplin, Whitney Houston and Alicia Keys, marks the third major executive change in the music industry during the past month. Antonio "L.A." Reid, who succeeded Mr. Davis as president of Arista in 2000, stepped down last month after BMG lost patience with the label's losses, despite recent hits including Outkast's "Hey Ya!" and Kelis's "Milkshake." Meanwhile, Time Warner Inc.'s Warner Music Group said last week it was hiring rap executive and entrepreneur Lyor Cohen from Vivendi Universal SA's Universal Music Group to run its domestic recorded-music operations. Faced with dwindling sales and rampant piracy, the music industry has been under the restructuring gun, prompting a new round of consolidation among the five big players. Sony Music and BMG, which rank as the world's second- and fifth-biggest music companies, respectively, announced a deal late last year to merge their recorded music operations. Mr. Davis historically has had a rocky relationship with BMG. After founding Arista in 1975, the 70-year-old executive sold the label to BMG in 1979. But by late 1999, BMG's then-chief executive, Strauss Zelnick, was looking for someone new to head the label, and Mr. Davis stepped down in 2000. Mr. Zelnick subsequently left BMG and current CEO Rolf Schmidt-Holtz re-employed Mr. Davis as chairman of a restructured RCA Music Group, overseeing the RCA and J labels. "This is an emotionally gratifying day," Mr. Davis said, calling the move "a major milestone career-wise." An old-school music executive whose career stretches back to the 1960s, Mr. Davis hasn't been known for pinching pennies. But people close to BMG said Chief Executive Rolf Schmidt-Holtz had been impressed by his ability to turn around RCA Music Group in the past two years. Under Mr. Davis, RCA Music Group has boosted its market share and bottom line by double-digit percentages, producing a string of hits from Monica, Luther Vandross and Clay Aiken. Mr. Davis said he would apply the same model he used at RCA to BMG North America. Mr. Davis will combine the support functions of the four labels under BMG North America while boosting the artist-and-repertoire operations. Mr. Davis acknowledged that there would be cuts but said it wasn't clear where at this stage. Mr. Davis will report directly to Mr. Schmidt-Holtz. Davis Moves to the Top of BMG Charts By Tamara Conniff LOS ANGELES - Music industry veteran Clive Davis, the man who propelled such artists as Whitney Houston and Carlos Santana to stardom, has been named chairman and CEO of BMG North America, it was announced Monday. Davis, who was chairman and CEO of BMG's RCA Music Group, reports to BMG chairman and CEO Rolf Schmidt-Holtz. The new BMG North America structure will combine the operations of Arista, J Records, RCA and Jive under one banner. Additionally, Charles Goldstuck, president and chief operating officer of the RCA Music Group, has been promoted to president and chief operating officer at BMG North America. Goldstuck, who reports to Davis, will oversee the consolidated business operations. With the recent ousting of Arista chief Antonio "L.A." Reid and the proposed merger between BMG and Sony, Davis' and Goldstuck's moves are not unexpected. Davis also will oversee BMG Distribution, BMG Strategic Marketing and BMG Canada. Davis' BMG North America group does not include RCA Label Group-Nashville, which will continue to be led by chairman Joe Galante, and BMG Classics, which is led by chairman Nicholas Firth. Davis' ascension to this top BMG post has been one of the most closely watched music industry sagas. It brings Davis full circle to his roots at Arista Records, the label he founded in 1975. Davis left Arista a few years ago after a highly publicized power struggle that ended with Reid taking the reins at Arista and Davis securing his own label, J Records, in a joint-venture deal with BMG reportedly worth $150 million. With J Records, Davis achieved huge success with Alicia Keys, Luther Vandross and Rod Stewart. In late 2002, Davis was named head of the RCA Music Group, which was formed by a merger of J Records and RCA Records. With Reid's exit and Davis' new role at BMG, Arista is once again Davis'. "It's really a tremendous opportunity for Charles and myself to make a stand for creativity," Davis said. "And obviously, it's emotionally gratifying." Davis said his plan for BMG North America is to make a "creative haven for artists." "That is what BMG North America is going to be," Davis said. "We started with J with Alicia (Keys) and Luther (Vandross) and Rod (Stewart), along with RCA's rock roster with Dave Matthews, the Strokes, the Kings of Leon, the 'American Idol' franchise. We're diversified. We're in urban; we're in hip-hop; we're in rock." Of note is Jive Records president Barry Weiss' role in the new structure. With the integration of Jive's Zomba parent into BMG and the pending merger with Sony, the fate of Jive had been unclear. Both Davis and Goldstuck emphasized Weiss' importance. "Barry runs a very solid operation and very successful operation," Goldstuck said. "One of the great things about what has happened here is that we get to work with Barry now." As for Arista's future, Davis said: "It's the label that I founded and named, and it is vital. I look forward to seeing my old friends, and we certainly will be looking for one or two top creative executives to help us with the challenges (involved with) this whole group of companies." Goldstuck said the streamlining of all BMG North America's operations will be a priority, but no time frame has been set. "Our philosophy here will be very much like how we handled the RCA/J merger to form the RCA Music Group," Goldstuck said. "We will be looking to consolidate administrative and (back office) functions and create better efficiencies and a better structure to service the creative centers." Bertelsmann and Sony Corp announced in December a binding deal to merge BMG and Sony Music in a 50-50 joint venture. If approved, Schmidt-Holtz would be named chairman of the board, and Sony Music chairman and CEO Andrew Lack would be CEO of the joint company. "This has really nothing to do whatsoever with the proposed merger discussions," Davis said. "This is just a strengthening of BMG North America." BMG Puts Davis Back On Top By TIM ARANGO February 3, 2004 -- Clive Davis is back on top. As The Post reported two weeks ago, Davis, the music legend credited with discovering such talents as Whitney Houston and Santana, is taking on a much bigger role at Bertelsmann's BMG. Yesterday the company named Davis as chairman and CEO of BMG North America, giving him control over such labels as RCA, J, Arista and Jive. His top deputy, Charles Goldstuck, will become president and chief operating officer of BMG North America. The move brings Davis, who most recently was head of RCA, back to the pinnacle of the music industry, and once again gives him control of Arista, the label he founded in 1975. Davis was booted from Arista in 2000, in what turned out to be a public relations fiasco for BMG. "It really is thrilling," Davis told The Post. "It certainly is emotional. It does seem to complete the full circle." BMG and Sony Music have proposed to merge, and the deal is currently pending before regulators in both the United States and Europe. "We'll be looking to consolidate and combine where it makes sense," Goldstuck told The Post. "We will be looking to bring in senior A&R [artist and repertoire] people." In late 2002, Davis and Goldstuck took the helm at RCA, and in 2003 the label saw its market share rise more than 60 percent. BMG Spins Clive Davis To Top Of Its Music World By Phyllis Furman, Daily News Business Writer Clive Davis is having the last laugh. Four years after BMG booted him from Arista, the legendary hit-maker who now runs RCA Group soared back to the top of the charts yesterday when he was named chairman of all of BMG North America. That means Davis, the fabled music exec who launched superstars Whitney Houston, Barry Manilow and Alicia Keys, will now be in charge of two other major labels, Arista - the label he founded - and Jive, as well as RCA. "This is very emotional," Davis told the Daily News. "It reflects what the music business really should be all about - creativity." Music insiders have been expecting Davis' promotion ever since BMG ousted L.A. Reid from Arista three weeks ago. Reid, who succeeded Davis at Arista, had big hits, but his heavy spending saddled the company with $100 million in losses last year. He's now the leading contender to replace music honcho Lyor Cohen at the helm of Universal Music's Island Def Jam. But over at RCA, Davis and his partner Charles Goldstuck pumped out mega record sales from the likes of Keys, "American Idol" Ruben Studdard, Rod Stewart, and Dave Matthews. And they also churned out $40 million in profits, music sources said. "In this environment you have to have hits coupled with bottom-line performance," Goldstuck, who was named president of BMG North America yesterday, told The News. RCA currently boasts four of the top 25 records in the country and last year boosted its market share by 65%. When Davis hosts his glitzy pre-Grammy party at the Beverly Hills Hotel on Saturday, he'll be toasting 20 Grammy nominations. But there won't be much celebrating among the employees at BMG, who are bracing for layoffs as Davis and Goldstuck now look to consolidate their three New York-based labels. Davis and Goldstuck are taking over as BMG gets set to merge with rival Sony Music. Yesterday, execs at the music giant denied the duo's promotion was connected to the merger, which must still meet regulatory approval. But an exec close to BMG said, "This is all about shoring up before the merger." Site design by: Dolphin Webpage Designs © 1996-2004