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Bertelsmann, Clive Davis Launch J Records Venture


After months of behind-the-scenes wrangling, Bertelsmann announced on Thursday the launch of J Records, a new $150-million joint-venture deal with music veteran Clive J. Davis.

The label, named after Davis' middle initial, will be up and running next month and is scheduled to release its debut CD in late October by nascent pop act O-Town. J Records plans to open with its own promotion and marketing staff as well as a small roster of artists culled from Bertelsmann's Arista division.

Davis signed the pact with Bertelsmann just three months 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 66-year-old veteran left Arista following a dispute last year with BMG Chief Strauss Zelnick over a succession plan for the label.

In an interview on Thursday, Davis downplayed his differences with Zelnick.

"You know [Al] Gore and [Joseph] Lieberman have differences but they unite for a ticket," Davis said, citing the Democratic presidential running mates. "This was a situation of where a contract was coming to an end. There was never anything--not the issue of succession or any other aspect of this--that ever reduced my belief from day one that we should be in business together."

Bertelsmann has committed more money to J Records than any of its competitors have ever sunk into a start-up, including Interscope Records and DreamWorks SKG. Zelnick scoffed at competitors who criticize the pact as a costly face-saving solution to a botched corporate power struggle.

"BMG is not running scared like some of our competitors seem to be. We are in a growth mode," Zelnick said in an interview. "We think this is a great time to invest in the record business, and who better to invest in than Clive Davis?"

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