Epic Holds Breath as L.A. Reid Era Comes to Ugly Close
Last summer, a handful of the 100 employees at Sony’s Epic Records packed up their belongings and followed Epic’s CEO, Antonio “L.A.” Reid, across the country as he moved the thriving record label’s headquarters from New York to Los Angeles, promising to grow the label’s clout in the entertainment world.
Less than a year later, Epic’s fate has been thrown into jeopardy following Reid’s unceremonious exit on May 11 in the wake of a sexual harassment claim made by one of his female assistants, leaving the label’s artists and staff in the lurch. Reid’s departure after six years also leaves Sony’s new CEO, Rob Stringer, with two daunting positions to fill: Reid’s, and Stringer’s previous job running Columbia Records, with few obvious candidates in the wings.
Sony announced Reid’s goodbye in a one-sentence press release on May 11 and hasn’t indicated who might take the reins, leading to some speculation that Sony could go so far as to eventually fold Epic altogether. Sources tell Billboard that many of the urban artists who’ve flocked to Epic are angered that Reid -- whose keen ear for hits and grand vision convinced most of them to sign in the first place -- left without warning, despite the fact that his future at the label had been on the rocks for at least two months. Reid, 60, who had previously run Universal’s Island Def Jam, was the only black CEO of a label at any of the three major record companies. Under his direction, Epic had steadily grown its market share to 3.63 percent, up from 2.56 percent when he took over in 2011.
While sources tell Billboard the notoriously free-spending Reid had never been keen on the prospect of working for Stringer, a peer six years his junior, Reid’s swan song began in March, before Stringer officially took over from outgoing Sony CEO and Reid mentor Doug Morris, when a lawyer for one of Reid’s assistants sent a letter to Sony’s general counsel alleging “unlawful harassment of an employee.”
Seeking a settlement, the lawyer alleged that Reid had harassed his client on a daily basis over the course of a year, humiliating her with inappropriate remarks about her appearance and icing her out when she rebuffed his advances. The letter also alleged that other high-ranking Epic executives knew about Reid’s supposed misconduct, with one of the assistant’s superiors warning her not to speak out. “Before you say anything more, think about what that means for you. Just think about what it means,” the executive allegedly told the assistant.
A lawyer for Reid declined to comment, while one person in Reid’s camp disputed the letter’s accuracy. The claimant and her lawyer declined to comment.
But upon investigation, Sony found at least some of the assistant’s claim to be credible, a source tells Billboard, and impossible to downplay against a backdrop of its three-year legal saga stemming from sexual abuse allegations made by pop star Kesha against producer Lukasz “Dr. Luke” Gottwald. Dr. Luke, whose defamation suit against Kesha is still pending, left his job as the head of Sony’s Kemosabe Records in April.
Moreover, several sources tell Billboard that the March harassment claim wasn’t the first complaint made against Reid over the course of his career, with an executive telling the magazine that one of Reid’s former labels had resolved another claim by a female employee “successfully and quietly.” That claim alleged a hostile work environment, says an insider. A representative for Reid said he was unavailable for comment.
Reid co-founded LaFace Records in 1989 and then sold that label to Arista Records, which he ran before it was absorbed into Sony. Reid then led Island Def Jam from 2004 to 2011.
Last week, Stringer took action, sanctioning Reid’s exit before working out the financial terms of his departure. On the night of May 11, Epic Instagrammed the message “We Love You L.A. Reid!” but removed the post as rumors swirled about the reasons for his departure.
Epic president Sylvia Rhone, Reid’s No. 2, has been running the company since, assuring artists and their managers that business will continue as usual, with releases planned in coming months that include Camila Cabello’s solo debut album and a new album by Cabello’s former group, Fifth Harmony. One manager told Billboard that while he was personally saddened by Reid’s departure, he was confident that Epic would continue to provide what he considers the label’s most crucial service for his client: radio promotion.
Other artist reps told Billboard they were concerned their future releases could suffer without the guidance of Reid, a drummer and producer known for giving big deals to young acts and for getting more involved in the music than most other major-label heads.
Epic’s remaining lieutenants include executive vp urban Benny Pough; CFO Lynn Hazan; A&R heads Paul Pontius and Joey Arbagey, executive vp promotion Todd Glassman and Laura Swanson, who leads media and strategic development. Sony’s next possible moves could include replacing Reid, promoting Rhone or another executive from within to the top job or merging Epic with another label such as Columbia.
While the harassment allegations cast a pall on the music industry, the resulting corporate turmoil at Sony has the record company’s competitors celebrating their relative stability. Universal Music Group’s top brass are locked in long-term contracts, sources tell Billboard, while Warner Music Group is readying to install Max Lousada as its new global head of recorded music after Lousada passed on the vacant Columbia Records job. Sony is the second-biggest record company, with 26.73 percent of the market.
Sony also has been upstaged on the charts since Reid’s departure, with We the Best/Epic artist DJ Khaled’s “I’m the One” ceding No. 1 on the Billboard Hot 100 to Universal’s “Despacito” by Luis Fonsi and Daddy Yankee..
Reid, who bought an $18 million home in Bel Air last year, has yet to announce his next move, though an insider said he is considering starting his own entertainment company. In the meantime, Reid has hired crisis PR guru Mike Sitrick while his lawyer negotiates the terms of his exit from Sony, a deal that a source tells Billboard is likely to be completed in the coming days.
L.A. Reid’s Career Over the Years
The veteran executive had success at every stop he made, having risen from journeyman artist to major-label chief.
Drummer for the Deele (1981-1988)
After a stint drumming for Pure Essence, his R&B group The Deele reached No. 10 on the Billboard Hot 100 with “Two Occasions” in 1988.
Co-President, LaFace (1989-2000)
President/CEO, Arista (2000-2004)
BMG acquired the rest of LaFace and Reid landed atop Arista, scoring diamond-certified albums from Usher and OutKast.
Chairman/CEO, Island Def Jam (2004-2011)
Chairman/CEO, Epic (2011-2017)