BMG TO SHUTTER RCA
BLACK MUSIC DIVISION

RCA Records is getting out of the black-music business, with at least some of its acts and employees to be absorbed by Arista Records.

The cost-cutting move is seen as a preemptive strike by BMG CEO Rolf Schmidt-Holtz, as Bertelsmann seeks to reduce overhead in the wake of a reported $150 million in losses for the fiscal year ended June 30.

Insiders said Arista has the option to pick up any of the affected RCA Black Music artists and executives, which includes 20 employees in its dedicated promotion, marketing and publicity divisions.

BMG, RCA and Arista declined to comment on the report.

Among the artists affected by the move are Tyrese, whose latest LP, 2000 Watts, is at Gold; Kevin Edmonds, whose 24/7 has scanned more than 400,000 units; Public Announcement, whose Don't Hold Back passed 175,000 units; and Before Dark, whose Daydreamin' is at 19,000 sold. Among the executives who might be affected are VP Urban Promotion Jodi Williams and VP Urban Media & Artist Relations Mary Moore.

BMG's planned cutbacks, which were originally scheduled for Sept. 17, will now begin this week, according to sources.

Following a series of top-level managerial changes in recent months, along with orders to reduce its work force, BMG sent out voluntary early-retirement packages to many of its approximately 8,000 employees in July. The voluntary retirement plan was offered to people older than 50 who have been with the company more than 10 years. Those that accept will be included in the planned 600 employees in North America who will be let go.

BMG's Schmidt-Holtz, along with Michael Smellie and Bob Jamieson, have been in discussions about RCA's black-music unit for some time.