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Surprisingly, Davis did not ask for many of the top Arista acts that many assumed he would, sources confirmed. Davis is, however, in advanced negotiations with George Michael to bring the singer/ songwriter to his new venture.
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DAVIS LABEL TAKING SHAPE

Discs To Be Round, Contained In Shrink-Wrapped Jewel Cases—Both Concepts Invented By Davis

BMG Entertainment and legendary music man clive davis',390,400);">clive davis',390,400);">Clive Davis, founder of BMG's Arista Records, have come to terms on a new joint venture label agreement, as expected.

Sources place the new BMG-funded Davis venture to be worth in the neighborhood of $150 million. Insiders see the deal as somewhat of an appeasement to help quiet the turmoil inside the German conglomerate largely caused by the "ugly" public dispute between Davis and BMG Chief strauss zelnick',390,400);">strauss zelnick',390,400);">Strauss Zelnick over a succession plan at Arista. The war of words ended with Davis leaving the company he founded 25 years ago, and producer/songwriter Antonio "L.A." Reid taking over the label's reins. Head scratchers are still scratching their heads in wonderment as to why BMG would fire Davis and then turn around and guarantee him millions of dollars for another venture.

Speculators are speculating that part of the $150 million startup infusion is a contingency fund set up for superstar artist signings. Sources said Davis and his team have their eyes set on a couple of top-level artists whose current contracts at other labels expire in the short term. During negotiations between Team Davis and BMG, both sides vied for whom would approve such signings, sources said.

Such Arista artists as LFO, Deborah Cox, Shannon Curfman and Next will be joining Davis at his new label, sources said. Those artists, while not the biggest sellers on Arista's roster, have done respectable in the U.S. market. Cox's last release sold 836k, LFO's did 1.3 mil, Curfman's is up to 83k and Next's current album has sold 163k, while its previous release topped 1.3 mil. Davis is also free to sign other Arista artists whose contracts will expire.

Surprisingly, Davis did not ask for many of the top Arista acts that many assumed he would, sources confirmed. Davis is, however, in advanced negotiations with George Michael to bring the singer/songwriter to his new venture, sources said (hitsdailydouble.com, Rumor Mill, 6/28).

Last week, Arista re-signed Carlos Santana to a HUGE new deal amid conjecture that he would be joining Davis. Santana renewed at Arista despite Davis' well-documented participation in the mega-selling "Supernatural," and the guitarist's declaration that he would like to continue to work with Davis (hitsdailydouble.com, 6/27). Santana staying put at Arista did not surprise most insiders, and many believe the Santana-Davis re-teaming talk may have been a negotiating tool to secure a bigger contract from Arista.

Meanwhile, Arista will also retain two of its biggest sellers: Whitney Houston, who will begin re-negotiating shortly, and Kenny G.

On the executive front, Davis will be joined by Arista Head of Promotion Richard Palmese, General Manager Charles Goldstuck and Davis' team of A&R execs led by Keith Naftaly. Senior VP Worldwide Marketing and Sales Tom Corson will likely make the move as well.

Davis' new venture is expected to be up and running in late September, just weeks before one of parent company Bertelsmann's top dogs, Mark Woessner, steps down as Chairman of its Supervisory Board. Woessner has long been viewed as a mentor and protector of michael dornemann',390,400);">michael dornemann',390,400);">Michael Dornemann, chairman of Bertelsmann Music Group for the last decade, sources said. Speculation abounds that Woessner's departure foreshadows further shake-ups, including the possible exit of Dornemann.

Bertelsmann Chairman Thomas Middelhoff was not pleased last year when BMG's battles with Davis and affiliate Jive Records spilled out, sources said. Middelhoff personally intervened in the management disputes, encouraging Dornemann and his right-hand man, Zelnick, to quickly put out the fires.

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