* The purchase that same summer of Island Records by PolyGram, a subsidiary of the Dutch electronics company Philips N.V. Estimated price: $300 million.

* The $500-million acquisition in 1989 of A&M--the Hollywood-based independent label started by Herb Alpert and Jerry Moss--by Philips, which also owns Mercury, Vertigo, Polydor, London and Fontana.

* David Geffen's sale in 1990 of his Geffen label to MCA for $550 million in preferred stock.

* The purchase of MCA Inc. itself the same year by Matsushita Electrical Industrial Co. Ltd.--the Japanese electronics giant whose brand names include Panasonic and Quasar. Price: about $6.6 billion in cash and securities.

In addition MCA, in a joint venture with Boston Industries, paid $61 million in 1988 for Berry Gordy's fabled Motown label, and Capitol-EMI in 1989 bought 50% of London-based Chrysalis Records (whose roster includes Sinead O'Connor and Billy Idol). Capitol-EMI also paid $26 million earlier this year for the remaining 50% interest in SBK Records (home of Vanilla Ice and Wilson Phillips).

The deals demonstrate that investors are bullish on pop music.

"I think the record industry is one of the strongest industries in the world at the moment," said Virgin Groups President Richard Branson, the noted British entrepreneur who personally signed Janet Jackson to his Virgin label.

"Despite the recession, it has hardly been affected at all. And my guess is that over the next 10 years, the industry will grow much faster than almost any other industry. I'm sure that is one of the reasons why the (large foreign conglomerates) are showing such an interest in the business."

Jeffrey Logsdon, senior vice president of Seidler Amdec Securities Inc., a Los Angeles brokerage firm, challenges that assumption. He doesn't believe the economic outlook is dramatically different for the record business than for other industries.

"I wouldn't look at what happened in 1990 as being indicative that the record industry is recession-proof," Logsdon says. "While it is true that successful artists can generate enormous amounts of profit, there is no way to gauge how long consumers will continue to purchase CD versions of old catalogue items which helped support the market last year."

But John Branca, the Los Angeles attorney who represents such major acts as the Rolling Stones and Prince and several major record companies, believes the flurry of corporate moves--and the dollar amounts involved--are bound to result in artists and their agents asking for a greater share of the pie.

Just as it's the superstar baseball players who lure customers into the park, it's the superstar artists who draw them into the stores.

"If you analyze what makes a record company profitable . . . what really drives the company, the superstar is the locomotive," says attorney Grubman, who represents such artists as Michael Jackson, Bruce Springsteen and Billy Joel. "And that's how these large contracts came to be. The same executives who were involved in restructuring the record business a few years ago now understand that the stars should be compensated for their true value."

Azoff, former head of MCA Records as well as onetime manager of the Eagles and Stevie Nicks, compares superstars to priceless artwork.

"When you're talking major artists, it's like auctioning a painting," he says. "There are only so many of them, and you need at least one to hang on the wall. When you're buying a Michael or a Janet, it's like now buying Picassos.

"The deal isn't just, 'Can I ever hope to make back the money on signing this artist?' It's also about what will this do for the worth of my company and the morale of my employees."

Some observers believe that Azoff's Picasso theory was clearly at work in the Jackson deals.

The Sony record division had just gone through a change of management, and it was important to send a signal to the industry--and to investors--that everything was under control. It just wouldn't look good to have the biggest record seller in history walk away.

The issue was particularly delicate because of widespread industry speculation that one reason Sony replaced Walter Yetnikoff as president of the record division was that he had lost the confidence of such key Sony artists as Jackson and Springsteen.

"In Michael's contract, the change of administration at Sony during the negotiations added to Jackson's bargaining power," says Bertram Fields, one of the attorneys who represented Jackson in the Sony negotiations. "This situation is really analogous to a drug company that announces it has some new hair-growing tonic.