Execs at BMG Entertainment are putting the final touches on a new employment pact for Arista Records prexy Clive Davis that would keep the vet at the label’s helm for another five years, according to insiders.
The new deal, which insiders said could be worth around $70 million, supersedes the pact Davis inked in 1995, which hovered just north of $50 million.
Davis’ new deal is expected to up the vet’s annual salary above $5 million and earn him an eight-figure signing bonus spread over the contract’s term. It also includes a performance bonus worth more than $10 million to be paid near the pact’s end as long as the label continues firing on all cylinders.
While some deal points remain open, the negotiations come as Arista wrapped its most successful fiscal year in the label’s 25-year history, topping $425 million. (Daily Variety, July 23).
The label is also said to be on track to log its best calendar year.
But the 65-year-old Davis must keep the label, a wholly owned division of BMG Entertainment on an upward course, while expanding the business with new deals and artist signings.
Conglom insiders are hopeful that the tony Arista can boost its sales by more than 50% over the next five years.
With the label’s profits surging and revenues growing, talks for a new deal come at a propitious time for Davis.
But insiders said BMG execs have been able to play a little hard ball while negotiating the new deal.
Five years ago, when Davis was renegotiating his lucrative pact, Arista was once again on fire, while BMG’s other labels, such as RCA, were cold. At the time, Arista accounted for almost half of BMG’s domestic market share.
Today, RCA is also doing well and has become BMG’s other marquee label. RCA’s annual revs recently topped $300 million.
And the Windham Hill Group has become an extremely profitable division with its lock on the new age and adult contemporary music marketplaces.
BMG’s deal with Jive, home to chart-toppers Britney Spears and the Backstreet Boys, has also helped fill the conglom’s coffers.
But the Davis-led Arista is still a jewel in BMG’s crown.
While Arista’s acumen for making the most out of albums from label mainstays Whitney Houston and Sarah McLachlan is well known, the label has also struck paydirt with Santana’s “Supernatural,” a left-field hit thanks to tracks boasting Everclear and Rob Thomas. The disc has topped 1.2 million units in just 12 weeks.
Arista stands to benefit strongly from a licensing deal to release the Artist’s next album, which label marketeers are effectively setting up. Arista’s music licensing arm is also earning record coin.
But the slow start of Puff Daddy’s latest album “Forever” couldn’t come at a more awkward time for Davis, who seemingly left no marketing stone unturned to tout the arrival of the disc.
Since its potent bow it has slid on the album sales chart. But Arista execs point to the slow start of Houston’s disc and how it rebounded with the release of a second single.
Arista’s fourth quarter slate of releases is unusually hefty.
None of the parties involved would comment.