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MCA puts biz on the brink

Hollywood loves a cliff-hanger. Now it has a real one.

An announcement on the completion of Seagram’s $5.7 billion acquisition of 80% of MCA is expected June 5. The long, drawn-out drama about Creative Artists Agency chairman Michael Ovitz’s expected move to MCA may also play itself out by that day.

Rival agencies have their assault forces on full alert to try and pry clients as well as agents away from CAA.

But the question remains: Will Ovitz and Seagram CEO Edgar Bronfman Jr. close their deal?

Major players were digging in last week, anticipating the biggest realignment of power since the Justice Dept. forced MCA itself out of the agency business in 1962.

Executives at MCA’s black tower were undergoing a painful re-evaluation of their positions as well.

As of June 2, however, highly placed sources at CAA, MCA and Seagram reiterated that as yet no agreement had been reached with Ovitz.

Indeed the situation is so volatile that it could have changed radically over the weekend.

Sources close to Bronfman said the sides are still a ways apart on money issues. Nor have the tax implications of the deal been untangled.

At CAA late last week, it was Code Red.

Ovitz called a meeting of the entire CAA staff June 1 to address the latest round of media reports that there was “a preliminary agreement” for him and partners Ron Meyer and Bill Haberto join MCA.

Ovitz said he had been approached – and that it wasn’t the first time someone had offered him a job – but nothing had yet been decided.

He also reminded the troops that CAA was their company, too, and asked them to refrain from expressing their opinions outside the agency.

On June 2, a senior CAA agent told Variety that if CAA principals ever found out who spoke to this paper, they were going to fire him or her. The fact is, CAA is no longer the impenetrable fortress it once was, and the place now leaks like a sieve.

“It’s a tough place for them to be,” said one top agent at a rival agency. “In realizing that there is going to be a shift in the balance of power – not knowing how dramatic or how immediate it may be or whether (Ovitz) leaves or not – it’s clear that just the prospect of him and his key executives leaving has created such a sense of instability that a feeding frenzy is developing.”

Tele-TV too?

Were Ovitz to link up with MCA, speculation has centered on a long-term plan to fold Tele-TV – the CAA-advised Bell Atlantic, Pacific Telesis, Nynex venture – into the MCA mix. Eventually the new entity might be used as a springboard to acquire a broadcast network, most likely CBS.

One source close to Bronfman said that, apart from the Ovitz negotiations, difficulties have arisen in dealings with current MCA chairman Lew Wasserman and president Sid Sheinberg. The source said Wasserman and Bronfman have not yet been able to come to terms and Sheinberg’s deal is not yet done.

Seagram officials had no comment.

Despite a meeting June 1 at which Ovitz tried to reassure his staff, some CAA agents, who have been bombarded by calls from clients and peers, are frustrated at being kept in the dark.

“We find out what’s going on from people outside this agency,” groused one CAA agent. “Many of us believe that the deal is done, and we’re just not being told.

The agency has battened down the hatches and is doing its best to keep agents and clients calm.

At MCA, similar insecurities prevail. With Wasserman expected to step aside and Sheinberg expected to segue to his own Universal-based production company, speculation at the studio focuses on the fate of MCA exec VP and motion picture group chairman Tom Pollock and studio president Casey Silver, president of production Hal Lieberman as well as other key executives.

Producers’ fate

A question mark hangs over those doing business with Universal, namely lot-based producers who are concerned about their own fate.

“The mood here varies from depressed to upbeat,” said one Universal-based producer. “No one is sure what is going to happen yet. Some people are tired of all the rhetoric and are saying, ‘I’ll believe it when I see it’ and others are still in denial. And there are still those trying to figure out who to suck up today to keep their jobs tomorrow.”

Despite the uncertainty, one thing remains clear: senior execs in MCA’s movie division are well protected – at least financially – no matter what may transpire at the company they have called home for the better part of the last decade. The studio also has a number of deals with producers and directors, including with former executives who have segued to producing.

Pollock, who has nearly four years remaining on his lucrative contract, has over the last year turned over much of the day-to-day operations to Silver, who a year ago was upped to a new position of Universal Pictures prexy.

The change in effect put Silver – instead of Pollock – on the creative front lines and allows Pollock more time to focus on the company’s growth internationally and on other fronts.

Sources, who said Pollock lately has spent a lot of time with Bronfman, speculate that the former entertainment lawyer will stay with the company in another capacity. Pollock declined comment.

Silver, who very well may stay in his present capacity, does indeed have a deal which would allow him to segue into a lucrative multiyear producing contract with Universal. Sources said Silver might prefer to leave the exec ranks for producing, while others say he might opt to leave the studio to work for another. Silver declined comment.

Lieberman’s options

On the other hand, sources say Lieberman, who last summer was upped to president of production and has spent recent months retooling his team, is hoping to stay in his current slot. Lieberman may also have an opportunity to segue to producing, but sources say that’s not where his heart lies.

“Hal is hoping for his shot and I think he has earned it,” said one lot-based producer. Lieberman also declined comment.

Several producers on the lot said they are banking on their longstanding relations with CAA agents to help them through the transition. Regardless, many feel they are in good standing.

“Nearly every production company at Universal has had strong dealings with CAA over the years,” said one producer. Some are even repped by CAA, including Ron Howard and Brian Grazer and Ivan Reitman.

“We have worked very closely with CAA in making movies at Universal,” said another producer. “These people are not strangers.”

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