Meidel to stick with Diller

Two days after calling it quits, Universal TV Group chairman Greg Meidel reversed his decision Friday and inked a new deal to join Barry Diller at the newly created USA Networks Inc.

The surprise shift capped a week of topsy-turvy negotiations, posturing over money and wrangling over Meidel’s role at the new company. In the high-stakes game of chicken, sources say it was Meidel who ultimately blinked.

According to a short statement released at the end of last week, Meidel has inked a five-year agreement to be chairman and CEO of USA Networks’ TV production and distribution arm. That’s essentially Universal TV minus the international production and distribution arm, which remains at the studio. Meidel and Diller would not comment.

Last month, Universal’s parent company, Seagram, sold most of the studio’s TV assets to Diller’s HSN Inc. for $4.1 billion, meaning that Diller’s Silver King stations and Home Shopping Network cabler will be merged with Universal’s TV production and domestic distribution arms, and the USA Networks cable nets.

Meidel initially planned to join Diller at the new company, but that changed last Wednesday after the two parties failed to agree on a new contract.

A Universal spokeswoman issued a statement Wednesday night saying that “Greg and Barry Diller were unable to come to an agreement,” and Meidel “will not be joining the newly formed USA Networks Inc.”

A source from Diller’s camp said the decision to end talks all came down to money. Meidel, the source said, gave Diller a take-it-or-leave-it ultimatum, citing his indispensability. Diller passed on the proposal.

The sticking point, one source said, was that Meidel wanted his current contract at U, with three years to go, paid out to him before signing an agreement with Diller at USA Networks.

One source said Meidel had “overplayed his hand” with Diller. Meidel’s lawyer Ed Hookstratten, as well as some of the exec’s closest associates, later urged the two parties to come back to the negotiating table.

One source close to Meidel said the final contract was a “compromise” that will give him “motivation compensation,” meaning that “if the company performs well, he gets rich.”

But some Hollywood insiders believe Meidel may have lost some face in the very public on-again, off-again negotiations.

“He tried to play poker with Diller, and Diller said, ‘Bye,’ ” one agent said. Another source close to the negotiations said Diller did not sweeten the pot at all, because he’s not one to cave in to ultimatums.

While sources close to Meidel deny it, some insiders believe he may have been pushing for a role overseeing some of USA Networks’ cable entities and stations, which he didn’t get.

As it stands, Meidel will essentially have the same responsibilities at the new company that he has had at U, except for international distribution. Meidel will likely remain a liaison with the studio on international matters, but the international sales staff, under Universal Intl. TV president Armando Nunez Jr., will no longer report to him.

What’s unclear is how important Universal TV’s network and syndication divisions will be to the new USA Networks.

Judging from Diller’s stated plans — and the new company’s name alone — the cable networks appear to be the main focus of Diller’s new empire. The mogul hopes to create a broadcast-cable hybrid network combining the distribution of USA Network and the Silver King station group. Meidel won’t have any role overseeing this new broadcast-cable network.

With Meidel’s duties remaining as is, some insiders speculate that Kay Koplovitz, founder and chairman of USA Networks, will take a more prominent role in the overall company, if she and Diller can continue to see eye to eye.

“I’m enjoying my working relationship with Barry Diller very much,” Koplovitz said Friday. “I look forward to an expanded role. This is going to be a very exciting year coming up for this company.”

What is interesting about last week’s head-butting is that Diller and Meidel have known each other for 18 years and had publicly praised one another.

While the short-lived rift may signal a rocky road ahead, U sources insist personalities had nothing to do with the business dealings, and all is now well between the two execs. And regardless of the power struggle, the mood at Universal late last week was one of jubilation and relief.

With Meidel staying on board, his team also appears to be safe. While James McNamara, president of worldwide TV distribution, is unlikely to move to USA Networks, Universal TV prexy Ken Solomon is expected to do so. Steve Rosenberg, exec VP for domestic syndication, is also negotiating a new deal that will elevate him to the chief domestic syndication post.

Notably, Koplovitz was the only major player at HSN or U willing to go on the record Friday about the Meidel-Diller dealings.

“I am glad that Greg is staying,” she said. “He’s good to have on our team, and I’m pleased everyone was able to iron out their differences. It’s a situation that unfortunately prematurely leapt to the pages of the trades. But it’s history now.”

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