MCA Reported in Talks to Buy Motown’s Recorded Music Unit

MCA is holding discussions with Motown Records Corp. to acquire its recorded music business, industry sources said Wednesday. The sources indicated that if the deal is completed, the purchase price is not likely to exceed $75 million.

MCA, parent of the Universal Studios complex, has stepped up efforts to expand its music business since 1983, when the company recruited former rock star manager Irving Azoff to run its Universal City-based records group. Shortly after Azoff was hired, the company negotiated the right to distribute Motown’s records for five years in the United States, and later tried unsuccessfully to buy Polygram Records.

Motown, a privately held company founded 28 years ago by Berry Gordy, holds highly prized contracts with recording artists Stevie Wonder and Lionel Richie, as well as the catalogue of classic hits it released by black pop artists in the 1960s. MCA will insist on the inclusion of the current Wonder and Richie contracts if a deal is negotiated, two sources said.

The talks do not include Motown’s music publishing business.

Motown’s corporate offices in Hollywood were apparently closed Wednesday for the holidays; the switchboard did not answer a reporter’s calls.

Azoff, contacted by telephone, declined comment.

However, MCA President and Chief Operating Officer Sidney J. Sheinberg said he “refused to deny” that the company is engaged in talks to acquire the record company.

Several industry executives said Motown’s sale could be motivated by tax law changes scheduled to take effect next year, which will end the tax break for capital gains. And one former industry executive speculated that Gordy might simply be “tired of the business.”

Gordy, who boxed briefly as a professional before he took up song writing, groomed such recording stars as Smokey Robinson and Diana Ross before moving Motown to Los Angeles from Detroit in 1971. The company eventually lost some of its best-known black artists (Ross, Gladys Knight, the Four Tops, Marvin Gaye and Michael Jackson) to other labels, but Gordy suggested in a rare interview three years ago that he was not ready to retire.

“I’m as excited today as I was in the beginning,” Gordy told the Times’ pop music critic Robert Hilburn in 1983. “We’ve got a backlog of 10 years of great ideas.”