Seagram CEO Edgar Bronfman Jr. said he has no immediate plans to replace the senior-most management at MCA Inc. and will further evaluate its operations before offering the top job to anyone else.
Bronfman told top MCA managers of his intentions on June 6, one day after Seagram closed its purchase of 80% of MCA for $5.7 billion and negotiations collapsed with Creative Artists Agency chairman Michael Ovitz to run the company.
“There is no obvious next choice,” said one source at the meeting between Bronfman and about 20 senior MCA managers. “People were definitely put at ease by knowing that no phone call was going to be made tomorrow to another candidate.”
The meeting of MCA senior managers, one attendee said, was brought to a close by Wasserman, who concluded: “I think I speak for all of us at this luncheon in telling you how pleased we are that the deal did not happen.” Not missing a beat, Bronfman quipped: “Thank you for your candor, and I just want you to know that I reserve the right to hire someone equally as offensive.”
Sources with knowledge of the negotiations between Bronfman and Ovitz said there were several reasons for the fallout including the inability of the two sides to reach an agreement on compensation and the buyout of Ovitz’s 56% of the agency. A preliminary agreement between the two was never made, with the principals attempting to come to that initial pact on June 4, the day before the announcement that the deal had fallen apart.
Sources also noted that the complex financial nature of the deal would have taken months to work out. Ovitz’s CAA partners and MCA chairman Lew Wasserman may also have influenced the ability of Ovitz and Bronfman to reach a deal.
It was during the June 6 meeting with senior execs that Wasserman and president Sidney Sheinberg assured their colleagues of their plans to stay on board at least long enough to achieve a smooth transition in ownership of the company. The contracts of both Wasserman and Sheinberg expire at year’s end.
Bronfman said he would rely on Wasserman and Sheinberg to help him learn more about the company and its operations before deciding on management issues. Bronfman declined to tell the executives how long that might take or how long Wasserman and Sheinberg will remain in their current jobs.
Immediately after word leaked out that Ovitz and Bronfman could not reach an agreement, speculation began about who would fill the top slots at MCA. One possibility is that Barry Diller might align with Bronfman to make a bid for CBS, or that Diller himself might be able to buy the network and form a strategic alliance with Bronfman that could lead to an equity swap.
Warner Bros. chairman and co-CEO Terry Semel was quick to quash rumors about his joining MCA by issuing a statement.
Another scenario had DreamWorks principal Jeffrey Katzenberg switching posts with Sheinberg. And still other sources suggested that DreamWorks’ Katzenberg, Steven Spielberg and David Geffen would take the reins of MCA – an opportunity they had been offered early on but declined.
Sources continue to believe that in the end Bronfman will appropriate the chairman title as his own, designate Wasserman chairman emeritus and hire a successor to Sheinberg.