Embroiled in lawsuits, the venerable pop-soul label is in deep trouble

Mention the name Motown and the ear almost tingles with sweet memories. During the ’60s and ’70s, the hit factory pumped out hundreds of Top 40 classics by Marvin Gaye, the Four Tops, Diana Ross and the Supremes, and a ledger of other legends. But three decades after its start, the fate of the world’s most famous pop-soul label hangs in the balance.

Sold by founder Berry Gordy Jr. to MCA and the investment group Boston Ventures for $61 million in 1988, Motown is rocking through both the best and worst of times. Even as it toasts multimillion sales for its new sensations Another Bad Creation and Boyz II Men, the label is reeling from defections by old stalwarts. Smokey Robinson has skipped, Lionel Richie is about to, and even company icon Stevie Wonder may follow. But the most dangerous defection might be its own. Motown is rebelling against MCA, and the resulting bitter, costly lawsuits could cripple the music maker.

In 1988, MCA had pledged to manufacture, market, and promote Motown’s records for a larger-than-usual fee. But Motown execs soon complained that MCA wasn’t living up to its end of the bargain. Last May, Motown sued MCA and vowed to cut distribution links with the company. Two weeks later, MCA countersued Motown and its ally, Boston Ventures. The battle took a radical turn in late September, when Motown defiantly broke its distribution deal with MCA and switched to PolyGram — a move that led to a price-cutting war between PolyGram and MCA.

The man in the middle of Motown’s mutiny is Jheryl Busby, 42, a longtime MCA mogul who took over as Motown’s president and CEO in 1988. Busby often talks about his ”vision” for ”the second chapter of Motown,” but he claims MCA sabotaged this vision by treating Motown ”like a Third World country.” Speaking of his old company, Busby says, ”They just love to fight, and I love to create and have visions, and that doesn’t sound like a good match, does it?”

An MCA spokesperson, however, says, ”It makes no sense to think that MCA would do anything to harm Motown. MCA benefits by selling as many Motown records as possible.”

So far, Busby’s instincts about Motown have been right on target. His ”second chapter” features new gold and platinum acts like the Boys and Johnny Gill, and a production deal for R&B star Michael Bivins (New Edition, Bell Biv DeVoe) that has yielded Another Bad Creation, Boyz II Men, and rapper M.C. Brains.

But Motown’s battle with MCA threatens to blindside Busby’s vision, and things seem to be getting worse, not better: A recent peacemaking powwow between Busby and MCA executives ended in an exchange of tirades. ”If you’re a Christian like me,” says Busby, ”you realize there is a God. And last time I checked, He was on Motown’s side.”