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Reid loses his groove with Arista

Move reportedly not related to pending music merger

A correction was made to this article on Jan. 14, 2004.

Antonio “L.A.” Reid has ankled as prexy and CEO of BMG’s Arista Records.

Rolf Schmidt-Holtz, chairman-CEO of BMG, made the announcement and has put chief operating officer Michael Smellie in charge of the label and its executive management.

A BMG exec said the move is not related to the pending merger of BMG and Sony Music, which is under review by the European Union. “The label has been terrific for artists, but we need fiscal restraint. We can’t be operating with losses,” the exec said.

Once the merger is completed, Smellie will report to Sony Music Entertainment chairman-CEO Andrew Lack, who will be chief exec of the new company.

Reid, who ran La Face Records with partner Kenny “Babyface” Edmonds starting in 1989, took the reins at Arista on July 1, 2000, the end result of a maneuver by BMG’s then-honcho Strauss Zelnick to remove Clive Davis from the imprint’s top job. Davis founded Arista in 1974 and, in late 2000, created J Records, which BMG now owns and distributes. Davis is the chairman of the RCA Records Group.

It’s believed Reid had about 18 months left on his contract.

The Arista roster, which includes La Face artists, is led by Whitney Houston, whom Reid inked to a $100 million deal in 2001, as well as Avril Lavigne, Pink, Outkast, Sarah McLachlan, Santana and Dido.

One of Reid’s early hires, former Palm Pictures and Island exec Larry Mestel, remains the label’s No. 2, continuing as exec VP and general manager.

“L.A. is one of the music industry’s top record men. His passion for working with and developing some of the world’s best artists is unparalleled,” Schmidt-Holtz said in a statement. “I sincerely wish him the best of luck in all future endeavors.”

BMG owns more than 200 record labels in 41 countries including Ariola, Jive Records and RCA. A decision to approve the merger with Sony or require more extensive examination is expected in the next six weeks.

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