New CEO Is Taking the Reins at Motown : Music: East Coast R&B; <i> Wunderkind </i> Andre Harrell has a mission to sign new acts and bolster the firm’s market share.

In a move foreshadowing major changes at the world’s most famous African American record label, East Coast R&B; Wunderkind Andre Harrell takes over the reins today at Motown Records.

“Chapter 3 in the Motown Story is about to be written,” said outgoing Motown Chief Executive Jheryl Busby, who will step down after eight years. “Motown Records has a rich African American heritage. Berry Gordy founded this great company and passed the torch to me. Now it’s my turn to pass the torch to Andre.”

Motown, with a catalogue that includes more than 30,000 recordings dating back to 1959 by such stars as Stevie Wonder, Smokey Robinson, the Temptations, the Jackson Five, Marvin Gaye and Diana Ross and the Supremes, generates more than $100 million in revenue a year.

PolyGram, which purchased Motown two years ago for an estimated $300 million, declined comment on whether Harrell had been hired. But sources said the New York-based record conglomerate, a subsidiary of Holland’s Philips Electronics, which also owns A&M;, Mercury, Island and Def Jam, will announce the changing of the guard this morning in New York.

Harrell, the record executive responsible for launching the careers of such smash R&B; acts as Mary J. Blige and Jodeci at MCA-owned Uptown Entertainment, said he was thrilled to be offered the job.

“The idea that I’ve been handed the keys to the largest African American pop company in the world is almost too much to take in,” Harrell, 35, said. “Motown has always been the symbol of black excellence for me. I can’t tell you how excited I am.”

Representatives for Harrell, Busby and PolyGram refused to discuss details of the deal. But sources speculated that Harrell’s five-year agreement for the job of president and chief executive at Motown could be worth as much as $20 million in salary and bonuses.

His mission is to sign new acts and bolster Motown’s anemic 2% share of the domestic market. Sales have been sluggish in recent years thanks to poor showings from albums by aging Motown superstars such as Wonder and Ross.

Boyz II Men and Queen Latifah are the primary contemporary acts that have kept Motown competitive with new African American labels such as Death Row, Bad Boy, and Uptown Entertainment, the MCA-owned company Harrell just left.

Harrell’s contract is said to grant him the power not only to sign new recording artists, but also to green-light small film and television projects for Motown.

Harrell, who will report directly to PolyGram Chairman Alain Levy, is also expected to shift the power base of Motown from its current Los Angeles headquarters to New York within the next 18 months. Sources said that some restructuring of the company and staff cuts could take place.

Motown was founded in Detroit 26 years ago by Berry Gordy, a former songwriter who had composed hits for Detroit R&B; singer Jackie Wilson. The 29-year-old Gordy borrowed $800 from a family trust, bought a used two-track recorder from a local deejay and purchased a tiny house on West Grand Boulevard in Detroit that he named Hitsville U.S.A.

By the mid-1960s, Gordy’s company was pumping out hits. Outside of the Beatles, few hit-makers could match the chart-topping strength of the Motown sound. In the decade between the Miracles’ 1961 “Shop Around” and the Temptations’ 1971 “Just My Imagination,” Motown produced more than 100 top 10 hits.

Motown’s company motto, “The Sound of Young America,” was more than a public relations ploy. At its peak, Gordy’s payroll for the West Grand Boulevard enterprise supported 450 non-artist staff members, with an average age of 23.

Gordy abandoned Detroit and moved Motown’s headquarters to Los Angeles in 1972, after which the label had less success developing new acts. Gordy sold the label for $61 million in 1988 to Boston Ventures and MCA.

Busby, a 25-year veteran in the music business who took over as president and chief executive of Motown in 1988, gave Harrell his first job as a producer at MCA Records eight years ago.

Sources said PolyGram began negotiating with Harrell to succeed Busby about two months ago. This was done without Busby’s knowledge and it angered the longtime chief executive, sources said. PolyGram could not sign Harrell until MCA released him from his Uptown contract, which did not expire until 1999. Harrell was released from his MCA contract on Friday morning and signed the PolyGram deal hours later.

Busby, who earned an estimated $30 million when PolyGram purchased Motown two years ago, leaves Motown effective today. “This is a young man’s business, and Motown needs somebody young and on the edge to move it into the next century,” Busby said. “I brought Andre into the business and wish him the best of luck.”