Spin Control.

Clive Davis is out, "LA" Reid is in at Arista 

There's been a changing of the guard in the music industry. Germany-based Bertelsmann Music Group (BMG) has announced that Antonio "LA" Reid, the co-founder and co-president of Atlanta-based LaFace Records, has been appointed president and CEO of New York-based Arista Records, a division of BMG. Reid replaces Arista founder--and industry legend--Clive Davis.

Reid's appointment comes after months of speculation about his new post, which becomes effective July 1, 2000, the date Davis' contract expires. "To be given the honor and challenge to lead Arista, a label that is home to legendary talent and a rich legacy, is an extraordinary opportunity," says Reid.

Under the terms of Reid's appointment, BMG, which owns 50% of LaFace, will purchase the remainder of the company for an estimated $100 million, giving BMG 100% ownership. The LaFace imprint will remain intact and company headquarters will stay in Atlanta. Kenneth "Babyface" Edmonds, Reid's longtime songwriting and producing partner, will enter a new (as yet unnamed) joint venture with Arista, where he will serve as CEO. A spokesperson for Reid would not comment on geid's or Edmonds' financial packages, including whether Reid will receive an equity stake in Arista.

In a statement released by his publicist, Davis says, "Though I regret the imposition of the Bertelsmann retirement-age policy, it's time now to turn a new and vital chapter in this fast-changing world of music." BMG traditionally enforces a retirement age of 60 (specifically for its Europe-based employees), and had been discussing a succession plan with Davis, now 67, for some time. However, when Davis was approached in early fall of 1999 about plans to hire Reid as his successor, he rejected the idea as an attempt to oust him from the label.

Nelson George, former Billboard black music editor and author of Hip Hop America (Viking, $24.95), comments, "It's no question that Davis is not leaving of his free will. BMG wanted a younger executive who could run the label well into the 21st century. Reid is just that executive. Davis would have been well-served to groom a replacement of his own, so the transition would not have been as bitter as it seems to have been."

All of which means Reid has some big shoes to fill. Davis entered the record business at Columbia Records at the age of 28 and is credited with signing such extraordinary musicians as Janis Joplin, Bruce Springsteen, Billy Joel and Chicago. In 1975, leveraging his success at Columbia, Davis founded Arista and built the label into the titan it now is, home to some of the industry's most successful acts, including Carlos Santana, Aretha Franklin, Whitney Houston, Sarah McLachlan, Kenny G and others. Davis is also credited with spearheading Santana's comeback with the 1999 album "Supernatural."

And Arista's artists revere Davis. When rumors spread late last year of BMG's plans, Arista luminaries like Whitney Houston openly expressed their support for Davis, which resulted in BMG entering into negotiations with him on a new venture to prevent turmoil. (However, this proposed deal is reportedly off the table.) Whether Houston and others will now stay with the label is uncertain, but except for her, artists at Arista reportedly do not have "key man" clauses in their contracts that would allow them to exit after Davis's departure.

In facing the challenges, Reid, 43, brings tremendous record industry experience. Before cofounding LaFace as a joint venture with Arista in 1989, Reid and Edmonds produced 33 No. I singles and garnered three Grammy awards. Derrick Thompson, vice president at BMG Music Publishing and A&R consultant for RCA Records, contends that, "Reid's appointment is brilliant and very important for all blacks in the music business. White executives make decisions regarding black music all the time. However, it's easy for blacks to be pigeonholed in the industry into only black music positions."