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L.A. Comes to New York

When L.A. Reid replaced Clive Davis as head of Arista Records, the industry reeled, artists threatened to walk, and staffers snubbed him. Half a year in, he's kept the key stars and pumped up new ones. And even "Mr. Davis" is working with him.

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A few weeks into his new job as president and CEO of Arista Records, L.A. Reid got mad. He was meeting with his two top executives to discuss the uncharacteristically meager sales of Whitney Houston's The Greatest Hits, a glitzy retrospective of Arista's franchise singer released seven weeks before he took office. In what one of the executives calls an "out-of-body experience," Reid rose angrily from behind his desk and tossed over a chair.

"I realized that this thing was headed nowhere, and we were going to spend a fucking fortune," Reid explains, his exasperation still fresh. The marketing plan for Houston, he continues, was poor: The record was released in mid-May, instead of later in the year when most superstar records appear, and key decisions about singles and videos were mishandled. "This whole project was just botched up, from the very beginning. This is what I walk into." Reid, a sleek, personable 44-year-old, brakes himself. "Let me collect myself here."

Last year, in the juiciest boardroom intrigue the music business has seen in years, Clive Davis was deposed from the presidency of Arista, the label he founded 25 years earlier, by Strauss Zelnick, president and CEO of BMG, and Michael Dornemann, the company's chairman. In his place, they installed Reid, who took over July 1. Soon after, BMG went back into business with Davis, outbidding other labels by offering him a fund of more than $150 million to start a new label, J Records. Then, just as the situation seemed to settle down, Zelnick and Dornemann left BMG, reportedly ousted by their boss, Bertelsmann chairman Thomas Middelhoff, for their handling of several matters, including their treatment of Davis.

Reid brought to the job a sterling record as a songwriter, producer, and head of

R&B powerhouse LaFace Records. But that didn't make it easy to replace Davis, the 67-year-old industry veteran who revived the career of Carlos Santana and guided the label to spectacular sales. "They hated me," Reid says. "The first two weeks, I heard people say 'Clive didn't do it that way.' " He started keeping a list and eventually fired about 30 employees whose loyalties he said he doubted.

From the time Davis's replacement was first rumored more than a year ago, he and Reid have issued press-release respect and praise for each other without hinting at the resentment between their camps. Reid still takes care to speak graciously of Davis -- whom he refers to as "Mr. Davis" and "the master" over the course of several conversations. But he is also alternately amused, annoyed, and angry over the criticism and rancor that greeted his appointment.

"He has a wonderful rapport with artists," says Toni Braxton. "He can hear a song and go, 'Ahh, you've got to do that one.'"

"The press loves Clive," Reid muses. "I'd read stories about myself coming to Arista, and there'd be a picture of Clive. I never saw a picture of me." He still recalls a story that dismissively labeled him a "rap executive." Then there was the gossip columnist who reported that Reid was spending afternoons shopping at Gucci while Davis was busy signing acts to his new label, including the boy band O-Town.

"I went to Orlando four months ago to see this band Clive signed. I thought it was bullshit then, I think it's bullshit now. I wouldn't have signed it," Reid says heatedly.

The story, he adds, "was racist." He pauses. "I don't play the race card. I'm not that guy. I have an amazing life." Reid is only the second African-American to run a major label (the other is Sylvia Rhone at Elektra), and he doubts that the columnist has reported on the shopping habits of white executives like Jimmy Iovine or Tommy Mottola.

Anyway, Reid adds with a smile, he doesn't shop at Gucci. "I have all my clothes made."

When Reid's promotion was announced, some reporters speculated that BMG bosses had "groomed" him for the Arista presidency by sending him to Harvard to get an M.B.A. in 1998. "I groomed myself," Reid counters. "I've wanted to run a major record company for many, many years."

Indeed, with his largesse, his zeal, and his fearless string of quarrels with close friends, Reid has been a mogul-in-training for years. Along with Kenneth "Babyface" Edmonds, he produced some of the biggest pop and R&B hits of the eighties (Whitney Houston's "I'm Your Baby Tonight," Bobby Brown's "Don't Be Cruel") and manufactured state-of-the-art pop stars with sleek music and distinct images based on class (Toni Braxton), sass (TLC), and ass (Usher). Unlike many of his peers, who know more about marketing than about music, Reid understands music thoroughly and gained renown for his prescience in spotting stars and choosing hits -- a valuable forte shared by Clive Davis, who brought LaFace into Arista.

As the label grew, Reid, who grew up borderline poor in Cincinnati, also earned a reputation for high style. Arnold Stiefel, who managed Toni Braxton, recalls that Reid traveled with "a valet who arrived ahead of him and brought two suits for every day, which were arranged in color-coordinated order in his hotel suite. I always felt underdressed and inappropriately casual when I met with him. He's like a prince."

Reid spread his 40th birthday party, a legendary 1996 bacchanal in Atlanta, over three days. To get in, he says with a lewd chuckle, "you had to either be on the guest list or be really fine."

"That was one of the illest parties of all time," marvels Sean "Puffy" Combs, a close friend. "So much to eat, so much to drink, so many beautiful women -- it was like walking into heaven."

Running a label requires a gift for hand-holding, scolding, and other baby-sitting skills, which Reid has in abundance. "I take care of artists. I give them love and attention," he says. "He has a wonderful rapport with artists," agrees singer Toni Braxton. "He can hear a song and go, 'Ahh, you've got to do that one.' "

"He really loves music," says Combs, whose Bad Boy label is distributed by Arista. Reid is also godfather to Combs's son, Justin. "He understands music. He was an artist, so he understands the artist's point of view."

"That's not to say he's soft," Combs adds. "I mean, he's gonna say no, he's gonna fight if he has to fight, he's gonna scream if he has to scream."


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