Music Veteran Leaving PolyGram Over Dispute

Less than a week after publicly criticizing the chairman of PolyGram, music entrepreneur Chris Blackwell is leaving the corporation, sources said.

PolyGram, which purchased Blackwell’s Island Records label eight years ago for $300 million, is ousting the well-known music veteran after an interview published Wednesday in The Times in which he questioned the ability of creative enterprises to operate within the Dutch conglomerate, sources said.

Blackwell, who said last week that he and PolyGram chief Alain Levy had “not seen eye to eye for a long time,” apparently will leave the company without an exit package--despite having more than a year left on his contract, sources said.

Blackwell and PolyGram declined to comment.

Sources close to the negotiations say Levy was incensed by Blackwell’s comments and summoned him to a meeting Friday at PolyGram’s New York headquarters. Levy and other PolyGram officials at the meeting told Blackwell that he had shown disloyalty and asked him to step down immediately, sources said. The paperwork sealing Blackwell’s departure from Island had not been completed Monday, but he is expected to be out by the end of the week.

Blackwell, whose company introduced the world to ska and reggae music, is highly regarded in entertainment circles for his business instincts as well as his dedication to artistic development. The 60-year-old entrepreneur has run Island for more than three decades, transforming it from a one-man operation into an entertainment powerhouse that included music, movies, resort hotels, animation and a line of independent theaters.

Sales at Island Records, however, have been sluggish recently. The label, whose U.S. market share has sunk to a paltry 1.5%, currently has only two albums on the nation’s pop chart. Sources at PolyGram say Levy has been displeased with the performance of Island for more than a year and recently asked Blackwell to devote more attention to the label.

Sources say Blackwell has had run-ins with PolyGram over the choice of executives installed to help him run Island. Blackwell has also voiced disappointment over Levy’s rejection of proposals to buy a chunk of Interscope Records and of alternative music cable station the Box.

Last week wasn’t the first time that Levy has been upset by Blackwell’s public comments. Three months ago, Blackwell lashed out at a decision by PolyGram’s film studio to edit “The Gingerbread Man,” an upcoming film by Robert Altmanagainst the wishes of the director.

Blackwell resigned as head of Island films in support of Altman, who later reached an agreement with the company. Levy subsequently wrote Blackwell a letter suggesting that he consider resigning from the board of directors. Last month, Blackwell wrote Levy a letter, in essence agreeing.

Blackwell launched Island from a tiny office in Kingston, Jamaica, in 1962. He moved its headquarters to London and began selling Jamaican ska music. By the late 1960s, Island expanded into rock music and scored a flurry of hits. In the 1980s, it nurtured U2 into a global pop sensation. In recent years, Island scored critical and commercial breakthroughs with P.J. Harvey and the Cranberries.

Before last week, Blackwell had been developing a PolyGram-financed firm that would create and sell DVD audio and video projects direct to the consumer. Sources say Blackwell plans to launch such a company after he leaves PolyGram.