Polygram Records is expected to announce today it has acquired Motown Records for more than $ 300 million.
Well-placed sources said the Massachusetts-based investment firm Boston Ventures will cash out its 88% share in Motown with an enormously healthy profit on its investment.
Boston Ventures and MCA Inc. had purchased 88% of the company for an estimated $ 61 million in 1988 from founder Berry Gordy Jr., with Boston Ventures purchasing MCA’s 17% share of Motown earlier this year to settle a legal dispute.
Gordy insisted at the time of the ’88 sale that some black interest be retained in the label, so the remaining 12% is owned by Motown president and CEO Jheryl Busby, Diana Ross and other Motown stars. Sources could not confirm whether the minority shareholders would also sell their stake in the label.
Announcement of the sale will likely be made simultaneously with Polygram’s earnings statement. It is also expected that Tabu Records president Clarence Avant will be named chairman of Motown Records and may also be given control over other R&B labels owned by Polygram.
Motown’s current roster includes Johnny Gill, Another Bad Creation and Boyz II Men, as well as one of the deepest catalogs in music. Gordy still retains Jobete Music, the publishing arm of Motown.
With Motown, Polygram acquires a label that has an enormous legacy in R&B music but has only two albums on the Billboard 200 chart of the nation’s top-selling albums: Johnny Gill’s “Provocative” and the 2-year-old “Cooleyhighharmony” by Boyz II Men.
The sale to Polygram ends a tumultuous two years for the label that began with a falling out between MCA and Motown in spring 1991. A series of suits were then filed filled with accusations of mismanagement and financial malfeasance by both parties.
Polygram was drawn into the dispute in September 1991 when it agreed to distribute Motown product. Earlier this year, all aspects of the suits were settled out of court. As a result, Boston Ventures bought out MCA’s share for an undisclosed sum and MCA agreed to drop its claims against Polygram.
At the time of the settlements, speculation began that Boston Ventures, which has a reputation for quickly selling its acquisitions, would seek to flip Motown , with Polygram a likely purchaser.