Motown Sues to End Accord With MCA : Entertainment: The record company contends that MCA failed to properly promote and distribute its label.

Motown Record Co. moved to sever its long-term promotion and distribution agreement with MCA Inc. on Tuesday in a lawsuit that accuses MCA of “ineptitude and deliberate misconduct.”

Motown maintains that MCA has undermined efforts to revive the label that is still best remembered for such classic 1960s hits as “I Heard It Through the Grapevine” and “Can’t Hurry Love.” MCA is also charged with violating specific contractual obligations to Motown.

Efforts “to build a valuable roster of new artists, to profitably sell new records and to maximize sales of its existing catalogue of classic recordings all have been frustrated by MCA’s misconduct,” Motown charges in the lengthy Los Angeles Superior Court filing.

MCA, a diversified entertainment company owned by Matsushita Electric Industrial Co. of Japan, denied the accusations in a formal statement. Sources close to the company said the suit reflects a “desperate” effort by Motown to renegotiate its contract, which guarantees MCA a distribution fee of 25% of all revenue, a figure far above the industry norm.

Motown’s current deal with MCA dates back to 1988, when Motown founder Berry Gordy Jr. sold the company to MCA and Boston Ventures Limited Partnership for $61 million. MCA, which took an 18% interest in Motown, also signed a 10-year distribution deal with the label.

MCA agreed to provide promotional, marketing and legal services to Motown in return for the high distribution cut. Two promising young MCA artists--Johnny Gill and The Boys--were also turned over to Motown. And Jheryl Busby, who was credited with reviving MCA’s black recording artist roster, was named Motown’s chairman and chief executive.

In a statement released late Tuesday, MCA said it has honored all of its pledges to Motown.

“MCA has evidenced a commitment to Motown long before the purchase, having distributed Motown Records since 1983,” said Zach Horowitz, executive vice president of MCA Music Entertainment Group. “Because we have a significant financial investment in Motown, a belief in the Motown legacy, as well as a long-term commitment to our core business of building record companies, we have every reason to maximize Motown’s value and success.”

Busby, however, said relations between the two companies steadily deteriorated after former MCA Records chief Irving Azoff, who negotiated the distribution deal, was replaced by Al Teller in 1989. MCA continually frustrated his efforts to revitalize the label, which today boasts a mix of newer artists such as Gill, The Boys and Another Bad Creation and such Motown standbys as Stevie Wonder and Diana Ross, Busby said.

The suit specifically charges that MCA failed to promote Motown songs to pop radio stations, that it botched distribution of the sound track album to “Do the Right Thing,” that it overcharged Motown for compact discs and that it failed to properly market the Motown catalogue. Motown claims to have lost tens of millions of dollars as a result of MCA’s alleged “failures.”

Motown, one of the pioneering black record labels, maintains that it has been forced to assemble its own staff and promotion system to compensate for MCA’s lack of services.

Motown still has managed some success. The label ranked fourth on Billboard magazine’s black album charts last year, up from 10th in 1988.