Andre Harrell Fired as Head of Motown Records

After two tumultuous and unsuccessful years, Andre Harrell was fired Thursday as president and CEO of PolyGram-owned Motown Records--the latest signal of trouble in the Dutch entertainment conglomerate’s music kingdom, which ranks last place in current U.S. market share, sources said.

Harrell’s dismissal is seen in music circles as an embarrassment for PolyGram Chairman Alain Levy, who personally lobbied Harrell in 1995 to leave MCA-owned Uptown Records with a lucrative five-year deal worth an estimated $30-million in salary and bonuses--$20 million of which was paid on signing, sources said.

Representatives for Harrell and PolyGram declined comment, but sources said the two parties agreed on an estimated $5-million exit package for Harrell after a week of heated negotiations. PolyGram, a subsidiary of Holland’s Philips Electronics, also owns Island, A&M;, Mercury and half of Def Jam.

Motown, whose storied catalog includes more than 30,000 recordings dating to 1959 by such stars as Stevie Wonder, Smokey Robinson, the Temptations, the Jackson 5, Marvin Gaye and Diana Ross and the Supremes, was purchased six years ago by PolyGram for a whopping $300 million from MCA.

PolyGram bought the label in the hopes it would put Motown back on the map as a contemporary competitor. But with the rise of such young black companies as Bad Boy, Death Row, LaFace, So So Def, TrackMasters and Aftermath, Motown seems more likely to remain primarily as a nostalgic brand name.

Levy was advised to hire Harrell based on his track record at MCA, where he was responsible for launching the careers of such smash R&B; acts as Mary J. Blige and Jodeci as well as the nation’s hottest producer, Sean “Puffy” Combs.

But Levy and Harrell have been at odds almost since the day PolyGram announced the 37-year-old executive’s arrival at Motown. During the first month of his tenure at Motown, Harrell stunned PolyGram executives by the amount of money he spent on self-promotion--including full-page, color ads Harrell took out in trade magazines touting his new position.

PolyGram executives also were taken aback by Harrell’s bragging about the financial details of his Motown deal in interviews. They also frowned upon Harrell’s lavish spending on office renovations, executive staff and artist signings.

Despite Harrell’s pledge to modernize Motown, the label’s market share continued to plunge during his tenure. This week, Motown registered just half of 1% of the total U.S. market with only one minor hit on the pop chart by R&B; group 702, which was signed before Harrell’s arrival. By comparison, Harrell’s protege Combs and his Bertelsmann-affiliated Bad Boy Entertainment sold more current albums in the last two weeks than Harrell did during his entire tenure at Motown.

Last fall, Levy began to criticize Harrell’s management style and imposed a barrage of fiscal restrictions on Motown. In an April interview with The Times, Levy issued a public warning to his Motown chief: “Andre has a string of albums coming out, and if those albums perform, there is no reason to get rid of an executive who is extremely talented. If there is a total failure with the new acts signed, however, then, yeah, I have a duty to my shareholders and to myself to ask whether the guy is right for the job.”

On Monday, Levy and PolyGram Music Group President Roger Ames decided to remove Harrell and restructure Motown, placing it under the umbrella of its booming Mercury division, which also markets and distributes music by the Def Jam and Capricorn labels. Although no immediate changes will take place at Motown, sources say that staff and roster cutbacks are likely.

PolyGram has no executive on tap to replace Harrell, but the company will report directly to Danny Goldberg, who is expected to be elevated from president to chairman of Mercury Records sometime next week.

Sources say PolyGram initially planned to fire Harrell for cause and considered suing him to recover the bulk of his signing fee. To do that, the company would have to prove Harrell did not deliver what he promised under his contract.

However, Harrell believed he was owed at least $10 million under his contract, and PolyGram abandoned its plan in an effort to avoid a protracted legal battle and the negative publicity associated with it, sources said.