Motown to Sever Ties With MCA Records : Entertainment: The company says it will switch to another distributor. But MCA says it will enforce its long-term contract.
Motown Record Co., which is engaged in a bitter court fight with its distributor, MCA Records, on Wednesday said it will terminate its deal with MCA and hire a new distributor.
Motown’s operating committee voted to formally sever the MCA agreement, which is supposed to run through 1998, as of Sept. 8. Steven Marenberg, Motown’s attorney, said the record label has already entered into discussions with other possible distribution companies.
“We expect an orderly transition from MCA to another distributor,” Marenberg said late Wednesday. “But we will also continue to vigorously prosecute our lawsuit against MCA.”
Sources predicted that MCA would move to block Motown’s plans in court.
The entertainment giant, a unit of Matsushita Electric Industrial Co. of Japan, issued a press release saying: “We have a long-term agreement with Motown that extends years beyond Sept. 8, and we intend to vigorously enforce all of MCA’s rights under that agreement.”
Motown’s latest move comes nearly three months after it filed a lawsuit in Los Angeles Superior Court alleging that MCA had botched the promotion of its songs to pop radio stations, mismanaged the distribution of the soundtrack to the Spike Lee film “Do The Right Thing” and overcharged it for compact discs.
MCA countersued, claiming that it was owed millions of dollars by Motown’s majority owner, Boston Ventures Management Inc. MCA, which holds an 18% stake in Motown, also accused Boston Ventures of interfering with MCA’s management of Motown’s product and preventing Motown from realizing profitable business opportunities.
Both companies have denied any wrongdoing.
Relations between MCA and Motown have steadily deteriorated since 1988, when Motown was sold by founder Berry Gordy for $61 million. The record label, which is best known for such 1960s hits as “I Heard It Through the Grapevine,” has struggled in recent years to reclaim its past success.
Motown President Jheryl Busby will lead the search for a new distributor.