The New King of Pop.

IT'S 10 A.M. ON COLUMBUS DAY, AND THE CORRIDORS ON THE NINTH FLOOR OF 6 West 57th Street, New York, headquarters of Arista Records, are anything but deserted. The music coming from the office that occupies the biggest section of the floor, in fact, is so loud you have to strain to hear your own thoughts. No, it's not the mischievous deed of an intern sneaking a quick break from a fast-food run to groove to a new R&B CD from LaFace Records. It's Antonio "L.A." Reid, putting his office sound system through its usual paces.

Today, he's reviewing a track that Rozonda "Chilli" Thomas--one-third of the R&B girl group extra-ordinaire, TLC--created with superproducer Dallas Austin (who is also the father of her young son). Reid nods his head and slaps his knee a time or two in time with the strong bass line of the song. Great beat, but it's not going to be a hit, he tells us.

"I can usually tell if a song will be a hit within 30 seconds, and this is about my fifth time listening to this one," he says. "I think I'm going to have to call Chilli and tell her that she can't release it."

Reid's passion for music is reflected in the sprawling office space. Photos of his three kids--ranging in age from 11 to 21--share space with a computer and printer on his desk. Most noticeable are the photos of various singing sensations--including Usher, a pet project of Reid's from his LaFace Records days as half of the dynamic producer-management team of L.A. and Kenny "Babyface" Edmonds--propped up on the table behind his desk. When it comes to songs that are connected to his name, Reid is dead serious: Everything he releases must be a hit.

"He's been extremely careful with his releases. In 1998, I asked him why he wasn't putting out a lot of records, and he said `I don't want to put out people I don't have faith in,'" says Clarence Avant, former chairman of Motown Records, who was responsible for arranging the 50-50 joint venture with LaFace Records and Arista 11 years ago.

It's that ear for music that compelled BMG Entertainment, the German parent company of Arista Records, to recruit Reid to succeed legendary Arista Records founder Clive Davis as president and CEO. "There were no other candidates," says Strauss Zelnick, president and CEO of BMG. "He has a wonderful style, he's comfortable with the artists, and they respect him." BMG Entertainment is the $4.7 billion worldwide entertainment division of Germany media powerhouse Bertelsmann AG. BMG acquired Arista Records in 1979.

The appointment was hardly without controversy, however, and Avant commends BMG for sticking to its guns in choosing Reid. "I have to take my hat off to Strauss Zelnick for never budging to the negative press [about removing Davis]," he says.

After reigning as Arista's head honcho since starting the company a quarter of a century ago, Davis did not have his contract renewed by BMG, Arista's German parent company. The official reason for his departure was succession. It was time for a new CEO. However, published reports claim that Davis was ousted because he was 67 and had reached the retirement age set by company policy. Reports say the news was delivered unexpectedly, even poorly, considering Davis' position in--and relationship to--Arista. The suddenness of the decision even sparked rumors that some of the label's topselling artists, among them Whitney Houston, had threatened to leave. When all was said and done, a few executives--including Charles Goldstuck, the general manager--had left, and Reid was thrust into the limelight as the new chief music maker.

Reid has felt a chill from folks in the industry since replacing Davis. Davis has since founded J Records--a 50-50 joint venture with BMG, worth a reported $150 million, of which Goldstuck is now president and COO. "I come from a purely creative background and I stepped into a position that was truly controversial," explains Reid. "My guess is that I have about six months to make a difference, as opposed to the three to five years most CEOs get," he says, responding to the pressure he's been feeling since starting in the post in July.

Nonetheless, he speaks confidently about his new position. "I may not get those three to five years, but that's okay. It won't take me that long anyway," he says.

In accepting the post, Reid sold the remaining 50% interest of LaFace records to BMG for $100 million. Reid believes LaFace was responsible for most of Arista's high points over the past 10 years, because LaFace's artists composed the majority of Arista's roster. "To be quite honest, I've made a huge contribution to Clive's career," says Reid, referring to the 50 million albums LaFace artists sold for Arista in that time.

Despite a history with Arista, Reid still has to prove himself as a businessman capable of managing a $500 million record company. Arista proper has around 41 domestic artists, plus 11 more on its international roster. Now that LaFace has been acquired by Arista, that roster will increase by 17. There are also three other labels, including Scan "Puffy" Combs' Bad Boy Records, that Arista promotes and distributes.

"There's definitely going to be a lot of people sitting on the sidelines watching, and a lot of Monday morning quarterbacks second-guessing everything he does," says Elektra CEO Sylvia Rhone, who is the only other African American CEO of a major record label. "Obviously, he will be compared to Clive Davis and the mythological aura that has surrounded him," she states. But she believes "L.A. will be able to forge his own path, and create his own legacy."

WHY L.A.?

James "Jimmy Jam" Harris, of the producing duo Jimmy Jam and Terry Lewis, knows the details of Reid's resume as well as any biographer. He explains why Reid is the best choice to succeed Davis.

"At his age, there's nobody more qualified," says Jam, who knew Reid before the LaFace years when Arista's CEO was a member of the Ohio-based R&B band The Deele. "He signed with Solar Records as a band member, so he has experience as an artist and a songwriter. He also has a publishing company, and experience as a song publisher. He's a producer who started a record label and plugged it in with one of the greatest guys [Clive Davis] ever at Arista. And he signs acts," continues Jam, sounding like a proud father.

But not just any acts. Reid and LaFace partner Edmonds signed the likes of Toni Braxton, TLC, hip-hop group Outkast, and Usher. "Taking all of that into consideration, yeah, who better?" Jam asks.

Edmonds, who was also Reid's bandmate in The Deele, seconds Jam's endorsement. "From the very beginning, L.A. was always a manager of artists. In the band [The Deele], he was the band leader who took on the problems of the other members, and he made sure that we ate and had a place to stay," he says.

In 1989, the duo formed LaFace Records, partnered with Arista, and made their first No. 1 hit, Damian Dame's "Exclusivity." Since then, the duo has boasted 33 No. 1 hits and three Grammy Awards. During that first year, Reid and Edmonds produced and wrote for Whitney Houston's third album, I'm Your Baby Tonight, which sold 4 million copies and gave the label its first No. 1 pop hit

In 1992, LaFace signed TLC and scored three R&B-pop hits with "Ain't 2 Proud 2 Beg," "Baby-Baby-Baby," and "What About Your Friends," from the group's first album, Oooooooh, On the TLC Tip. Later that year, LaFace's triple platinum (3 million copies sold) sound track album for the Eddie Murphy movie Boomerang introduced diva Toni Braxton.

To this day, Braxton and Reid still work closely together, although the two will admit there was tension between them a few years ago when Braxton filed for bankruptcy--and took the LaFace label to court. "The bankruptcy did stress things between us," acknowledges Braxton. "But now we get along fine."

LaFace's superstar group, TLC, also filed for bankruptcy. Reid says these are just minor blemishes on his record, considering both cases were settled, and TLC and Braxton still work professionally with Reid. "I can't say L.A. was responsible [for the bankruptcy]. The system is just corrupt," says Braxton. "It should never be a flaw on him. LaFace was a joint venture, and there were a lot of people involved."

MAKING THE BAND

Reid says that when he first came to Arista, it was apparent many of the people there had not come to work solely for Arista--and they certainly weren't interested in working for him.

"People definitely had issues in the beginning," maintains Reid. "There were clearly a number of people who were here because of my predecessor and they treated me distant and cold. It has taken some time to weed through. But in the months I've been here, I've almost turned the entire company around."

Arista is built on joint ventures, similar to the one it had with LaFace. Reid has implemented his turnaround strategy by building on the company's tradition of strategic partnerships. He began by inking a deal with Flyte Tyme, run by Jam and Lewis.

Jam and Lewis entered into an exclusive, three-year joint venture with Arista in August. Under terms of the agreement, Arista will take over all marketing, promotion, sales, and distribution responsibilities for Flyte Tyme artists, and Jam and Lewis will produce artists for Arista and its other labels.

Even if you are the No. 1 music man, you can't make deals by yourself, says Avant. "You have to surround yourself with the right folks." Taking Avant's advice, Reid quickly began surrounding himself with people who can help him grow the business and that have an allegiance to him.

Just a few days after taking the helm at Arista, Reid, who reports directly to Zelnick, began changing his lineup. On July 10, he named former Palm Entertainment COO Larry Mestel as executive vice president-general manager, replacing the previous GM, who quit upon Davis' departure. Former Columbia Records senior vice president Jerry Blair was named executive vice president in charge of non-urban promotion and marketing, while Arista veteran Lionel Ridenour remained as executive vice president, overseeing urban promotion and marketing.

From LaFace, Reid named Dorsey James senior vice president of Arista Ventures, and Mark Shimmel senior vice president of artist relations. Other appointments include executives from BMG's corporate offices: Matt Flott will be vice president of finance, and Steve Grawley will be vice president of business and legal affairs.

Reid says his new staff allows him to run the company and still focus on his A&R strengths. He maintains that he was not brought to Arista just to manage the business. "My role is to find stars and make hits," he says. He says he will do whatever it takes to cut costs and help Arista run more efficiently, but that ultimately the top line is through hits. "My job is to identify stars, find hits, and forge relationships with creative people. That's the only reason why I'm here. I'd never have a corporate job. I know how to build a business, and I know how to count, but what I do is music."

FAST FORWARD

Reid has come a long way from playing in local bands in his hometown, Cincinnati. But he's still not sure if he's made it. "I'm not sure if I'm at the pinnacle of my career, or if I'm starting a whole new career altogether," says Reid. "I'm building from scratch, and I really have my work cut out for me."

He cites the expansion of Arista's artist roster as among the biggest challenges ahead of him. With the exception of Arista's all-time greats, such as Aretha Franklin, Whitney Houston, and Carlos Santana, Reid says Arista's lineup was in need of a strong shot of star power.

In 1999, Arista's gross revenues were approximately $525 million, says Laura Swanson, spokesperson at Arista. Santana--who was re-signed by Davis in 1999 and represents the former CEO's last great contribution to the label--accounted for $23 million of that figure alone, she says, with a mega-platinum smash album, Supernatural, that earned eight Grammy awards this year.

Not to be outdone, though, Reid is trying to fight his way out of Davis' shadow. In late October, Reid signed his former LaFace partner, Babyface Edmonds, to a long-term recording contract. A superproducer, gifted songwriter, and R&B crooner in his own right, Edmonds has written and produced hits for the likes of Eric Clapton, Celine Dion, and Madonna. His installment as an Arista artist became effective after his latest album, Babyface: A Collection of His Greatest Hits, was released by Epic Records, a Sony company, on November 14.

With his former partner on the Arista ticket, Reid intends to outdo the contributions the two made while heading up their Atlanta-based label. "LaFace contributed 25% to 30% of the Arista top line for the past five consecutive years," estimates Reid. Currently, Arista's biggest artists are from the LaFace label, with Braxton, Outkast, and Usher currently serving as the label's superstars, says Reid.

Pink, an alternative rock-pop artist, is also a LaFace artist who had one of the label's biggest releases this year. "Pink is No. 1 on the Australian Top 10, and in the States, her sales are already more than $2 million," boasts Reid.

Worthy of mention, however, is the lineup of artists for Davis's new label, J Records. As part of the deal with BMG, J Records' initial roster includes several former Arista artists: Deborah Cox, LFO, Next, and Q-Tip (formerly of A Tribe Called Quest).

Staying true to his core competencies, Reid still finds songs and sits with his artists. He also does record sequences, decides radio mixes, and selects treatments for music videos. On Columbus Day, he shared a screening of what he calls "the most creative video ever made." It was for Outkast's song, "Ms. Jackson."

Doubling the revenues and adding significant market share are two of Reid's goals as CEO. At the end of day, however, Reid still sees the artists and their music as the main ingredient. "My strategy is really simple: more stars and more hits."

Clarence Avant: The Godfather's blessing

Behind all great people, there are others just as great. Clarence Avant, called "Godfather" by many in the music industry, is one of those people. The former chairman of Motown Records (1993-1998) began his career in the entertainment industry 34 years ago, and is still running two of the companies he established in the '60s and '70s, Avant-Garde Publishing and Interior Records. He can be considered partly responsible for Antonio "L.A." Reid's success at Arista, as he spearheaded the joint venture between LaFace and Arista Records in the late '80s. That business venture was Reid's first introduction into the company of which he is now CEO.

Considered one of the most influential African Americans in the entertainment industry, Avant has been described as a selfless man. Quincy Jones, producer extraordinaire and good friend to Avant, once said that if Avant worked as hard for himself as he did for other people, he'd have been a billionaire a long time ago. When asked if he was president, owner, and CEO of his current music publishing and record companies, Avant simply said that he didn't call himself anything, he was just a businessman.

When asked if he was ready to pass the baton after all these years, he said, "I don't really have a baton to pass. The record business doesn't really work that way. You come along and make your contribution, then it's someone else's turn." He says that black music is responsible for 50% or more of the profits in the record business today, whereas it was responsible for about 20% 10 years ago. And while people like Reid are making significant strides on the corporate side of the business, blacks are a long way from pulling in 50% of the dollars or enjoying 50% of the power in the industry. Avant admits, "This is a big jump for [Reid], from LaFace to Arista, but Arista is not Sony or Time Warner Group or Jive."

But Avant has had a hand in grooming Reid and has seen him rise to his current position. And it's a pretty safe bet that Reid won't be the only African American to make strides in the industry, if Avant has anything to do with it.

--Sonja Brown Stokely

ARISTA (including artists from the following labels(*))

Ace Of Base Blue Brand Nubian Castro Coffee Brown Jimmy Cozier Gigi D'Agostino Dido DJ Quik Dyme Electrasy Faithless Fierce Aretha Franklin From Zero Funkmaster Flex Kenny G Grateful Dead Havana Whitney Houston (1) Alicia Keys Kenny Latimore Leon Annie Lennox Barry Manilow Sarah McLachlan (2) Monica Abra Moore Lennon Naughty By Nature Pushmonkey Run DMC Rustic Overtones Santana (3) Carlos Santana Carly Simon Sister 7 Sky Farn Smith

INTERNATIONAL ICLA

Another Level Bachelor Girl Crash Test Dummies Eurythmics Five Beth Orton Spiritualized Lisa Stansfield Angle Stone Westlife (4)

TIME BOMB

Amazing Crowns Aussie Youth Bail Chlorine Death In Vegas No Knife Peter Scancy Reverend Horton Heat (5) Social Distortion Soul Circle Starling Sunny Day Real Estate

MELISMA

Angie Aparo (6) Color

LaFACE

1 Life 2 Live Raphael Brown Joy Enriquez Donnell Jones Goodie Mob Latrelle L.G. (Bren) Outkast (7) Pink Sam Sakes Shanice T.L.P. T.L.C. Toni Braxton Usher (8) Christina Wilson Young Bloodz

BAD BOY

112 Asia & Ashley Black Rob Mark Curry Cheri Dennis Dream Faith Evans Thelma Gayton Puffy Shyne Carl Thomas (9) Mario Winans

(*) As of September 2000.

ANTONIO "L.A." REID

Occupation: CEO and president of Arista Records

Age: 43

Family: Divorced; three children; remarried in 2000

Education: Hughes High School, Cincinnati, Ohio (1974); 12-week Advanced Management Program at Harvard Business School (1999)

TIMELINE

1957   Born in Cincinnati, Ohio
1975   Hits the road with local bands
1980   Joins The Deele with Kenny "Babyface" Edmonds
1983   Signs with Solar Records and makes first hit,
        "Body Talk"
1984   Moves to Los Angeles with Babyface to write and
        produce songs
1989   Begins LaFace as a production company with
        Babyface
1989   Grammy nomination - Songwriter, "Don't Be Cruel"
1989   Begins LaFace label as joint venture with Arista
1989   BMI - Songwriter of the Year
1992   Signs TLC, who sold 4 million copies of their
        debut album Oooooooh, On the TLC Tip.
1992   LaFace soundtrack for Boomerang goes triple
        platinum (3 million copies sold)
1992   Grammy Award - Producer of the Year
1992   Grammy Award - Best R&B Song, "End of the Road"
1994   Signs Usher
1996   Outkast goes platinum with "Atliens"
1997   Usher's first No. 1 hit, "You Make Me Wanna"
1997   Sound track for Soul Food goes double platinum
2000   Sells LaFace to Arista for $100 million; becomes
        CEO and president of Arista