The Raging Battle Over the Other Jackson : Execs From 10 Major Record Companies Are Competing to Sign Janet Jackson. The Deal Could Be the Most Lucrative in Record History

The media may be obsessed these days with the ups and downs of Michael Jackson’s new “HIStory” album, but the real industry story is the high-stakes contract war being waged behind the scenes for the other Jackson superstar: sister Janet.

It’s an intense, big-ego battle involving executives from 10 major companies, including such high-profile players as DreamWorks SKG’s David Geffen, Sony’s Tommy Mottola and Warner Music’s Michael Fuchs.

The struggle could lead to Jackson, a free agent due to a unique “exit” clause in her Virgin Records deal, receiving the most lucrative contract in record history.

Where the record for a multi-album contract is now believed to be around the $60-million mark shared by such figures as Michael Jackson, Madonna and Prince, the Janet Jackson total could top that figure if the 29-year-old singer is willing to commit herself to a lengthy, multi-album deal.

“I worked hard to get to this position in my career--and I’ll tell you something, all the attention really tickles me,” said Jackson in a phone interview from her Malibu home. “I’m out there kicking all the tires, checking out the landscape, and seeing who actually intends to play ball. I haven’t even come close to making a decision yet, but it really feels wonderful to be so wanted.”

Free agency is an anomaly in the pop business, where record companies typically bind artists to long-term contracts for most of their careers. The standard pact gives a company options for as many as six to eight albums--usually at a low royalty rate.

Even the multimillion-dollar contracts signed a few years ago by Madonna and the other superstars require them to deliver at least six albums to their respective record labels.

But Jackson’s $40-million, three-album deal in 1991 with Virgin--widely considered to be the shrewdest, most artist-friendly pact ever negotiated--not only guaranteed her substantial advances and a 22% royalty rate, it also contained an unprecedented clause allowing her the choice to bow out after one record.

One reason Jackson’s attorney, Donald S. Passman, was able to secure such favorable terms was that he negotiated the deal when former Virgin Records owner Richard Branson was trying to spruce up his label with superstars to attract financial suitors.

Jackson’s primary attraction, however, was, and still remains, that she is young and has mastered a dance-pop style that is in sync with today’s video-oriented music market. Over the past decade, she has delivered a string of hit singles and videos that helped push sales of her last three albums past the 30-million mark.

Indeed, few artists could get away with releasing a greatest-hits compilation based on songs culled from only three albums, but retailers have high expectations for Jackson’s “Design of a Decade,” due Oct. 10, which they are counting on to become one of the year’s blockbusters.

“Janet Jackson is conceivably one of the best investments available right now in the music business,” said Jeff Pollack, chairman of Pollack Media Group, a Los Angeles firm that consults radio stations around the world.

Geoff Mayfield, director of charts at Billboard magazine, agrees.

“Most of the artists who signed mega-deals a few years back are no longer in their selling prime, but Janet’s graph is definitely still on the rise,” Mayfield said. “She’s about as safe a bet as a record company could hope to find.”

Jackson and her representatives refused to disclose details of the deal that she is shopping, but insiders speculated that it will most likely be a four-to-six-album pact requiring a $10-million-plus advance, plus a 25% royalty rate per sale.

Few analysts expect Jackson’s upcoming deal to trigger a flurry of new superstar pacts. Of the big acts that dominate the record business, sources said that only R.E.M., which owes Warner Bros. only one more album, and Van Halen, which is free from the same label after two more collections, are approaching free agency status.

Jackson’s attorney Passman, whose clients also include Green Day and Bonnie Raitt, said he has no problem playing hardball with record companies when negotiating a contract.

“Everybody knows that the only thing that draws consumers into the store to buy the CD is an artist’s music,” Passman said. “All we’re really talking about here is dividing up a pie that is created by the artist. “

Those who complain that stars of Jackson’s stature make outrageous demands may not understand the complex economics of the $12-billion record business.

While it is true that superstar deals squeeze a big chunk out of a record label’s profit at the retail level, companies have designed other methods to capitalize on their investments. Major record companies rack up huge profits from manufacturing, distribution and foreign sale of recordings--profits they do not share with artists, no matter how big their stature.

Superstars are often compared to priceless artworks that impart cachet to a firm, which can help attract fledgling acts to join the roster. Also, if a company is positioning itself for sale, an artist like Jackson could bolster its credibility among suitors, and, in turn, increase its market value.

In Jackson’s case, she wasn’t the only one to turn a profit on her deal. Virgin’s Branson collected $1 billion when he sold Virgin to EMI, a sale that might not have occurred without Jackson in the fold. In turn, EMI has sold approximately 10 million copies of “janet.” since its 1993 release and is doing everything in its power to keep Jackson from jumping ship.

Jackson is writing new material for her next album and plans to continue meeting with companies that want to be involved in its release. Among the other industry executives seeking to sign her: EMI’s Ken Berry, PolyGram’s Alain Levy, A&M;’s Al Cafaro, BMG’s Strauss Zelnick and Work’s Jeff Ayeroff and Jordan Harris.

From her vantage point as a free agent, Jackson said she thinks it’s crucial for artists to get personally involved in the business as well as the creative aspects of their careers. “It’s very important for artists to learn as much as possible about their craft and their contract,” she added. “It’s unfortunate, but if you’re an artist and you don’t know what’s going on in the business, somebody is going to rip you off.”