LAFACE OFF The news last week that industry legend Clive Davis, 66, is likely to be replaced come June by LaFace Records co-owner L.A. Reid as president of Arista Records knocked many for a loop. Worse, the perception that Arista parent BMG is forcing him out has left Davis looking like a pawn in a larger corporate game. Whitney Houston was quick to offer support: ”Clive and I are family. It hurts me to think he’s being treated with disrespect.”

In a statement, Strauss Zelnick, prez and CEO of BMG Entertainment, says it’s just business: ”I have a responsibility to make decisions based on what’s right for the company, and that includes making sure we have an appropriate succession plan in place at Arista.” For his part, Davis—who founded Arista in 1975 and brought up such artists as Houston, Patti Smith, and Santana—announced he has ”no plans whatsoever to retire” once he steps down and that he is mulling offers from BMG involving ”a new public media company.”

Despite denials from BMG, some in the industry firmly believe that Davis is being ousted, possibly because of overspending on the making and marketing of recent albums by Houston and Puff Daddy. ”Nobody likes the way this is going down,” says Elektra Records chairman and CEO Sylvia Rhone. ”I think the way [BMG has] handled Clive has been very disrespectful and improper.” Rhone, the most powerful African-American woman in the music biz, sees the potential appointment of Reid, who is also black, as ”bittersweet…. It’s not the best way for him to come in…. Hopefully, people will be smart enough not to point the finger at [Reid] but at Zelnick and whoever else sits up in BMG’s corporate offices.” Reid won’t comment, but the problems he’ll face are implicit in Kenny G‘s reaction: ”It’s very simple. Clive Davis is Arista Records.” (Additional reporting by Adam Winer)