PARADISE LOST
Old Boyz Network at Arista set up "LA" Reid as a Patsy.
Less than a year after Reid takes control of Arista, the once glorious label is falling apart at the seams.
This is not news...
News is allegedly objective. This is anything but. This is about interpreting the news into information that you can use. The key to predicting the future is in interpreting the past. In real terms, this means understanding how the big players interpret their mistakes and their recent acquisitions.
And they make some big ones of both. Let's take a look.
PARADISE LOST: ARISTA BECOMES A HELL-HOLE AND CLIVE GETS THE LAST LAUGH
Readers: Every major periodical is working on a similar story to this, but remember where you heard the "inside" facts first. This past week a source at BMG informed me that the German Giant is preparing walking papers for
Arista's new president, Antonio "LA" Reid. It seems a year later the management at BMG is questioning their wisdom of de-throning legendary old-school record man Clive Davis and replacing him with La Face Records', "LA" Reid. For those who haven't been following this: when Clive scoffed at
his early retirement, BMG's then CEO Strauss Zelnick began eyeing Reid as his protege in order to gain control of Arista.
Reid had the street cred but not the book savvy to run the $3,000,000,000 company so Zelnick, hoping to groom Reid into someone whom he could make more presentable to the collegiate board of BMG, made Reid his "pet project" and sent him to a 10 week summer seminar at Harvard Business School. He got the Germans to back this plan and the rest has become record industry history: BMG forces Clive out only to give him his own label deal at a start up cost of about a hundred million and puts Reid in the driver's seat. Now, a year later Clive is back in the game with a vengeance while Arista has turned into
a veritable ocean of pink slips and mismanagement.
A healthy pissing match between Davis and Reid would have been interesting for all to watch. But when Reid's mentor, Zelnick, was fired it left no layer of insulation between "LA" and the rampant budget cuts that have been
sweeping through BMG's labels for over a year. Mr. Reid had to make his own executive decisions, and with only his instincts and Harvard Summer Camp training to assist him, the multi-platinum song writer has become increasingly paranoid, cleaning house of the remains of the Davis regime, even if it means paying off six-figure compensation packages.
Now cash that could be used for artist development is going to pay off fired executives so they can keep up with their Lexus payments. These are not just mailroom clerks, but A&R people with proven track records like, Richard
Sweret who brought Ace of Base and Sara Malachlan to the label. The lack of sanity is beginning to take on costly and comical proportions. Several times in the last six months the secretarial pool and the mail room staff have
received free catered lunch served by waiters because no one bothered to cancel catering orders for the executive meetings that had been canceled days earlier.
Ironically, "LA"'s motto for this year's brutally expensive corporate retreat in Puerto Rico was, "ONE FAMILY, ONE VISION." That vision seems to be manifesting itself in the firing of all loyal employees and replacing them with twice the amount of temps. Most of them younger, less experienced, and apparently less qualified folk who will work for less money. To the casual observer the result in the staff cuts seems to be that there are more
inexperienced employees working for lower salaries, but no significant reduction of headcount, which was the main point of BMG's budget cuts to begin with.
Once again artist development will take the hit and the "welcome to the family" greeting for a new Arista exec comes with the mental image of "LA" poised over the entrance of the executive wash room with a sickle, like the angel of death.
But don't think Clive is out-of-the woods. While Davis' new label, J Records is sopping up buzz with signings like Soil out of Chicago and Alicia Keyes, they are also feeling the pressure to economize in addition to showing the world that Clive is not too old to Rock and Roll. Despite the fact that acts like Usher and Outkast demonstrate that Reid has the golden ear, the industry seems to be backing the "old Man" at J Records with cautious optimism. Meanwhile, remaining employees at Arista say that the place feels like the
Titanic.
And things are about to get way worse for Mr. Reid. Last month, quite suddenly, Senior Director of Marketing, Shanti Das, quit without notice or comment. Unlike the other causalities of war, she'd been with Reid at La Face Records for years in Atlanta. "LA" brought her in to run his division at Arista. She is the first of the Reid crew to jump ship of her own accord.
How long can this continue? In business pages last week BMG announced NO PROFITS for the music division this year. There is talk that they may sell it off.
WHAT IT ALL MEANS
I like "LA". I love his work, and he's got amazing ears. But it's clear that he's being played for a patsy. My only question is, does he see it? BMG has been trying to downsize Arista for years, hoping to take BMG public.
That's why they wanted to get rid of Clive in the first place: his $4,000,000 a year salary looks real whaced when you're trying to attract investors.
But old imprints don't just die. They must be strategically crippled until their only remaining value is their catalog. In BMGs case they needed a fall guy for Arista. Someone to blame for its "failure." Reid is the prefect choice. He was the win/win scenario when they let Zelnick put him in power
and fired Zelnick shortly afterward. If Reid fails, they would blame Zelnick for his experiment. If he succeeded they would take the credit and Reid would be in their hip pocket. It's Julis Creaser in modern times.
So, if you have a new deal on J Records, Arista (or really any BMG label) you need to watch your back. If the German Giant can't get lean enough to sucker in some serious cash you may find your contract sold off to some three-deep label with lame distribution. They have the power to do that. (Look at the clause in your contract called "Release Obligations.")
The sad part is that "LA" may really have the skills to pay d'bills as an executive, and I'm sure in his mind a year ago when he got the opportunity of a lifetime, he felt that he could have been a junior Clive Davis. But the deck was stacked against him and now it looks to this observer that "LA" Reid is BMG's sacrificial lamb.
Hey, you know the old saying, just because people really are out to get ya, doesn't mean that you're not paranoid.
SOME CASUALTIES OF REID'S WILD SWINGING AXE
Richard Sweret SVP A&R. Booted in October 2000.
Marc Zimet - VP Video Promotion, Jim Elliot - VP Top 40 Promotion, Derek Lafayette - Director Urban Artist Development, Dana Hill - Sr Director Urban Marketing. All booted in November 2000.
Ken Krongard - Director A&R, Michelle Ozbourn - Manager West cost A&R. Booted in January.
Pete Ganbarg - Sr VP A&R, Ken Levy - SVP Creative Services. Booted in February.
And in June: Rob Schneck - Director New Media (after recent promotion), Lou Simon - Sr Director A&R (hired in Feb), Lynn Salliveras - Promotion, Director - (hired in November.)
RIP to all.
Moses out.
NEW ON MOSESAVALON.COM
I know many of you have ordered your advanced copy of my new book Secrets of Negotiating a Recording Contract: The Musician's Guide to Locating and Avoiding Sneaky Lawyer Stuff. According to Backbeat Books (my publisher)
over 4000 copies have been pre-sold through Amazon thus far. But--FYI the pub date has been moved up to September 1. So, those who paid for advanced orders through my site, MosesAvalon.com, will be receiving their books long before the rest who ordered on Amazon. Look for your orders sometime in early August. That also goes for you attorneys out there who ordered Pro Packages, which included Advanced Recording Contract Negotiations for Musician's and Attorneys. For more information on these books go to my site www.MosesAvalon.com and click on the animated icon that reads "Click here To Save The World."
Frankly the demand for the new books has overwhelmed everyone. And I am burning the midnight oil making last minute changes to the manuscripts so that it will have the latest and nastiest revelations of scams that have been conjured by sneaky label lawyers.
___________________________________________
Any views stated or information contained on this page do not necessarily reflect those of this website. This page is reproduced with permission.