In 1972, Gordy relocated to Los Angeles, where he produced the commercially successful biographical drama film on Billie Holiday, Lady Sings the Blues, starring Diana Ross (who was nominated for an Academy Award), Richard Pryor, and Billy Dee Williams (cast in a role originally for Levi Stubbs of the Four Tops). Initially the studio, over Gordy's objections, rejected Williams after several screen tests. However, Gordy, known for his tenacity, eventually prevailed, and the film established Williams as a major movie star. Berry Gordy soon after produced and directed Mahogany, (Tony Richardson was the original director, but Gordy fired Richardson and took over direction himself after a dispute over minor casting) also starring Ross and Williams. In 1985, he produced the cult martial arts film The Last Dragon, which starred martial artist Taimak and one of Prince's proteges, Vanity.
Although Motown continued to produce major hits throughout the 1970s and 1980s by artists including the Jacksons, Rick James, Commodores, Lionel Richie and long-term signings Stevie Wonder and Smokey Robinson, the record company was no longer the major force it had been. Gordy sold his interests in Motown Records to MCA and Boston Ventures on June 28, 1988, for $61 million.