Clive Davis Expected to Sign Deal With BMG

Bertelsmann is expected to sign a joint-venture label deal today with Arista Records founder Clive Davis worth an estimated $150 million--about half of what Davis originally sought, sources said.

The agreement, following nearly a year of dramatic back-room battles, is likely to be announced late this afternoon.

Davis decided to sign the pact with Bertelsmann’s music group even after the German conglomerate drove him from power at Arista, the New York label he founded and has overseen for the last 25 years. The reason: the 66-year-old music veteran couldn’t rustle up a better offer anywhere else.

Indeed, none of BMG’s competitors who had publicly championed him during the lengthy corporate power struggle were willing to finance the $300-million venture Davis was pitching.

Davis was also abandoned by Arista superstars such as Carlos Santana, who stopped praising Davis and began praising BMG soon after the conglomerate sweetened his recording contract.

A few Arista executives will follow Davis to his new venture, but most of his former staff will continue taking orders from their new Arista boss, Antonio “L.A.” Reid.

Reid, who previously ran BMG’s LaFace division, has already installed a new management team at Arista and has managed to quickly calm the waters inside of the demoralized label, sources said.

Davis’ label is expected to be up and running by late September.