Motown Founder Won’t Sell, Ends Talks With MCA

Motown Records Corp. ended negotiations Wednesday to sell its recorded music business to MCA Corp., making the decision on the last day that Motown might have taken advantage of certain tax breaks before a new law goes into effect today.

Jay Lasker, president of Motown’s music group, said the decision was made by Berry Gordy Jr., the company’s founder, chairman and controlling shareholder.

“Mr. Gordy decided not to sell the company at this time,” Lasker said. The Motown executive said the negotiations ended amicably, however, and noted that Motown records will continue to be distributed by MCA for another 18 months under a previously negotiated deal.

“MCA is a wonderful company and we’re . . . negotiating a new long-term distribution agreement,” Lasker said.

One source familiar with the negotiations said that if the deal had proceeded, Motown would have received between $50 million and $60 million, depending on the company’s near-term performance.

Two record industry executives said they believe Gordy suffered “seller’s remorse,” deciding he couldn’t part with the company he founded in Detroit 28 years ago and moved to Los Angeles in 1971.

Several executives recalled that at least once before, Gordy pulled out of a sale, when he was on the verge of selling Jobete Music, the publishing arm of Motown, in 1980.

Gordy could not be reached for comment, and Irving Azoff, president of the MCA Music Entertainment Group, declined to talk about the negotiations.

In its ‘60s heyday, Motown released a phenomenal string of hits from such black artists as Smokey Robinson, Diana Ross, Gladys Knight, the Four Tops and Marvin Gaye. Although a number of those singers defected to other labels, Motown currently holds contracts with Stevie Wonder and Lionel Richie.

Some sources speculated that black community leaders might have opposed the sale because Motown is such a popular symbol of successful black enterprise.

But Lasker demurred, saying sentiment for Motown “transcends the black community.”