I don't know anything about a blacklisting, but around the time you're talking about, ZTT was consumed in legal and personal wrangles with the Art of Noise split, the Holly Johnson and Propaganda contract disputes, and they had a big mess on their hands with Das Psych-oh Rangers (over how the band wanted to be produced and marketed). Plus, I think public taste was sort of changing away from the colorful-situationist kind of pop music (that ZTT was/is so perfect for!) and leaning towards slighty more straightforward bands like That Petrol Emotion and Big Audio Dynamite who were getting popular at the time. So they were up against a lot of things, some of which they brought upon themselves (embarrassingly unfair one-sided contracts) and some was just the nature of the beast (changing taste and the music press' having to kill the old guard in order to champion the new). It wasn't until Seal's "Crazy" came along that the fickle world deemed Trevor Horn and ZTT "ok" again. I know things must change, but I remember feeling like it had all been sort of watered-down and made "pretty" in an almost apologetic way. Or maybe I was projecting. haha. It's probably completely naive to say this but I still wish for the label's old sense of campaign to come back, with new bands and better contracts. It could be great.