Motown Cast as ‘Icon’ in Battle

Just days ago, one of America’s most beloved pop singers offered to team up with Motown Records chief Jheryl Busby in a pitched legal battle against MCA Records, Motown’s minority-owner and former distributor.

An angry Stevie Wonder said he would personally take Motown’s case to top executives at Matsushita Electric Industrial Co., MCA’s Japanese parent.

“Stevie told me, ‘This can’t happen to Motown,’ ” Busby recalled. “ ‘It has gone beyond pure business . . . This is an attack on a black icon and a piece of Americana.’ ”

With those words, Wonder hit on the two factors that separate the Motown-MCA dispute from other business battles: Motown’s importance as an emblem of black entrepreneurial success and the goodwill it still generates as the record label that helped set the 1960s to music.

Motown and its allies have skillfully exploited those issues in the four months since Motown first charged that MCA had mishandled the marketing and distribution of its records.

Especially sensitive for MCA are subtle insinuations by Motown that racism played a role in driving the two companies apart, since other Japanese companies and public officials have come under persistent criticism for slurs against blacks.

MCA denies that the dispute has anything to do with race, pointing out that it has been a leader in hiring black executives and promoting black artists. Others note, too, that MCA has nothing to gain from Motown’s failure.

But the entertainment conglomerate has been frustrated in its efforts to publicly distinguish Motown-the-legend from Motown-the-business, which is now controlled by a white-owned investment firm called Boston Ventures.

“This is an economic dispute,” said one MCA executive who requested anonymity. “It has never been a sexy, controversial, racially tinged matter. The black community knows what we’ve done. When you get past the emotions, what you’ve got is people fighting over a contract.”

Those tensions started soon after founder Berry Gordy sold Motown--the record label that had been home to Marvin Gaye, the Supremes and the Temptations--for $61 million in 1988.

Boston Ventures, run by a group of former bankers whose investments include the National Enquirer, agreed to buy 70% of Motown. MCA took an 18% interest. Busby--who had been running MCA’s black music division--received 10%; a variety of parties owned the rest.

Motown had been in decline since the early 70s, when its original superstars defected or fizzled out in the face of the disco craze. The new owners’ revitalization plan called for Busby--known as a talented music executive but a poor administrator--to handle creative matters, while MCA took responsibility for business affairs, including the promotion of Motown.

As Motown’s creative team added new acts--such as Boyz II Men and Another Bad Creation--to replace the ‘60s stars whose pictures still grace the walls of the label’s Hollywood offices, the business ties became more strained.

Boston Ventures, which had agreed to pay MCA a healthy 25% fee to aggressively market and distribute the label, accused its partner of reneging. MCA said Boston Ventures actually was upset because it realized that the 10-year agreement limited Motown’s resale potential.

By 1989, the sides had entered into talks about restructuring the deal. But the outcome was only further animosity--a result that many attribute to a clashing of corporate cultures.

One source said the “stiff” New Englanders at Boston Ventures were unable to come to terms with MCA’s “take no prisoners” deal-making style.

Both sides accuse the other of secretly escalating the war.

MCA says Boston Ventures and Motown quietly took on counsel soon after the deal soured. Motown says it first learned that MCA had hired attorneys when MCA’s law firm mistakenly sent its bill to Motown in January.

By May the matter had landed in the courts. Motown maintained that MCA failed to promote its songs to pop radio stations, that it mishandled distribution of the “Do The Right Thing” sound track album and that it had botched the marketing of the popular Motown catalogue.

In a countersuit, MCA denied the accusations. It said the case was just the latest strategic move in Boston Ventures’ ongoing bid to better its contractual agreement.

“We had every conceivable financial interest in maximizing the Motown’s success,” said one MCA executive. “We have more money invested in Motown than Busby or Boston Ventures.”

The race issue is a subtle but significant undercurrent in the case.

Busby has complained to the press that Motown was treated “like a Third World country.” He has also accused MCA of acting disrespectfully toward him, while pampering executives at other labels, including Geffen Records. There even have been references to a “plantation mentality” on the part of MCA.

Wonder’s involvement could further fan the race issue, especially if he follows through on talk of publicly appealing to MCA’s Japanese owners. Wonder’s office declined comment on his next move, but the singer has been an effective advocate of black causes in the past.

The final effort at reconciliation came in August, when MCA Chairman Lew R. Wasserman called the sides together for a meeting at the posh Hotel Bel-Air.

Busby, who began the meeting by talking at length about his dreams for Motown, stormed out when MCA President Sidney J. Sheinberg brusquely interrupted him. According to several sources, Sheinberg said: “OK, you’re a dreamer. You’re a visionary. But let me give you a dose of reality.”

Only last week, Motown’s operating committee proved that it was serious about severing its ties to MCA by signing a new distribution pact with PolyGram N.V., the European company that has aggressively worked to capture more of the American recording market recently. PolyGram took control of Motown’s catalogue on Sunday, after Motown agreed to defend PolyGram against any lawsuits.

A frustrated MCA held that Motown had hastily entered into a bad business deal with PolyGram. In a bid to unload its Motown records before the PolyGram versions reach stores--and possibly to compete with PolyGram--MCA over the weekend slashed prices on its Motown catalogue by 15%.

MCA predicted that the quick change in distributors would wreak havoc at record stores. But Motown said the transition, aided by PolyGram’s sales staff, was proceeding smoothly.

Russ Solomon of the Tower Records chain said he did not foresee any problems, due to Motown’s relatively small size. “If Guns N Roses changed distributors tomorrow, it might be a little hysterical,” Solomon said. “But this will be a fine transition, one way or another.”