Craig Seymour
November 19, 1999 AT 05:00 AM EST

The record industry was sent spinning on Wednesday in the wake of rumors that Clive Davis, president of Arista Records, may be replaced by L.A. Reid, president of Arista subsidiary LaFace Records. If the rumors pan out, Arista will become the highest-grossing record company to be led by an African-American in the history of the business. (Arista posted $425 million in sales last year; sales at labels like Elektra, Def Jam, and No Limit, all run by African-Americans, hover at around $200 million.) This news puts the spotlight on the relatively unknown Reid, who didn’t even appear on EW’s recent list of the top 20 most influential minority executives in entertainment.

As president of LaFace, which grossed $75 million last year, Reid guided the careers of Toni Braxton and TLC, multi-platinum acts that have boosted Arista’s fortunes. He also brought two pivotal players into the Arista camp: Dallas Austin, the producer behind TLC and budding Arista diva Monica, as well as Sean ”Puffy” Combs, whose Bad Boy Records is also an Arista subsidiary. As early as 1995 Austin said, ”L.A. had the vision to bring youthful urban producers, songwriters, and artists to Arista when they weren’t even thinking about it.” Combs, whose Bad Boy Records made $130 million dollars in 1997, has said: ”If it wasn’t for L.A., I wouldn’t be at Arista.”

Davis, who has admitted that he’ll ”never get rap music,” has credited Reid with helping him stay current with hip-hop and R&B. But they haven’t always seen eye to eye. The moguls disagreed about whether ”Waterfalls,” one of TLC’s biggest hits, should even be released. ”He didn’t like ‘Waterfalls,”’ Reid said earlier this year. ”He didn’t understand why I wanted to release it or why I wanted to spend this huge amount of money on the video. He didn’t quite believe in it.”

According to the Wall Street Journal, BMG has offered Davis the choice of staying at Arista in a newly created advisory position as Chairman or undertaking a new-media venture backed by BMG. But it doesn’t look as if he’s going to step down willingly. ”I would like to make it clear,” he said in a press release on Wednesday, ”that I have no plans whatsoever to retire.”

For the time being, Reid is keeping quiet. Last month, he told the Cincinnati Enquirer, ”All the success and all, I certainly don’t take it lightly… But now, I’m more concerned with having peace and just happiness in my life.” Of course, there’s nothing like a great new job to put a smile on your face.

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