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Knocked Off Balance by Poor Spin Control

October 04, 1994|ALAN CITRON

In the course of finally closing the book on the controversial Peter Guber era last week, Sony Corp. of America President Michael P. Schulhof managed to create a whole new uproar.

Executives at New York-based Sony Music were stunned Friday to read a story in which Schulhof was quoted as saying that Jeffrey Sagansky, his new second in command, would help oversee all U.S.-based operations--including music--in the wake of Guber's departure.

Schulhof's public statement that "Jeff will move to New York to help me manage the entire U.S. group" was seen as contradicting his earlier promise of a hands-off role for Sagansky in the music area, which is the most successful of Sony's American entertainment operations.

Confronted with the inconsistency, Schulhof issued an internal memo in which he again reversed field and pledged that Sagansky will have "no operating responsibilities for Sony Music Entertainment." He added that "Thomas D. Mottola will continue to direct and oversee Sony Music Entertainment's worldwide operations, reporting directly and only to me."

Schulhof blamed the mix-up on "press coverage," but the truth is that executives often get entangled in their own clumsy, misguided efforts at spin control--which are sometimes carefully devised and sometimes knee-jerk reactions to negative news. Schulhof's recent accounts of changes at his company have been studded with inconsistencies. Walt Disney Co. Chairman Michael D. Eisner has also been guilty of sending contradictory signals recently.

Schulhof's problems started last month when news leaked that Sagansky was being hired as his second in command. When most of the entertainment media took that as another sign that Guber's days as Sony Pictures Entertainment chairman were numbered, Schulhof insisted they were wrong. As recently as two weeks ago, company operatives speaking on his behalf were saying that Guber would be in place until the turn of the century, if not longer.

Now it's clear that Schulhof knew otherwise. Last week, when Guber resigned to start his own company, Schulhof casually mentioned that Guber's exit had been in the works for months. "Four months ago, Peter came to me and said, 'I think my time is up,' " Schulhof told The Times. "When he told me what he had in mind, to create an entertainment company, I said, 'Not only will I support it, I'll invest in it.' "

The handling of the Sagansky hiring also exacerbated bad feelings at Sony Music, where executives have long complained of being treated like stepchildren and where Sagansky has yet to overcome strained relations with Mottola. Schulhof briefly calmed concerns that Sagansky would have a destabilizing effect on the music operation early in the discussion by saying that he would be limited to a strategic role, but he again found himself on the hot seat with Friday's remarks about Sagansky having full oversight.


Eisner's troubles have come in response to a growing public feud with Jeffrey Katzenberg, the recently deposed chairman of Walt Disney Studios. Arguably the key point of contention is whether Eisner promised Katzenberg the No. 2 corporate post at Disney. If so, Katzenberg's bitter feelings at being rejected would be more understandable.

Katzenberg says the promise was made during a conversation last year. When the account appeared in the New Yorker, Eisner denied making such a commitment. Now, in the upcoming issue of Vanity Fair magazine, he repositions himself. Eisner concedes that Katzenberg may have been led to believe he would someday get the job that was held by Frank Wells before his death in a helicopter crash last April.

"(Jeffrey) says I said to him, 'If Frank wasn't there, it would be a different story,' " Eisner is quoted as saying. "In other words, that I gave him the body language to believe that. I can't say whether I did, and it's unfortunate if this has become a misunderstanding. I wish I had made the message clearer."


Clock puncher: Unemployment isn't putting much of a dent in Katzenberg's intense work routine. After wrapping his 10-year run at Disney on Friday, Katzenberg was back on the job Sunday, as he set up his new office at the Maple Drive complex in Beverly Hills.

Katzenberg plans to devote the next several weeks to weighing job offers and other opportunities. Friends say it's too soon to tell what his next step will be--whether taking over a company or starting his own--but no one expects him to remain at loose ends for long.

Katzenberg spent his final week as studio chairman in New York, partly to participate in New York Film Festival activities. He returned to Los Angeles on Friday, where he was thrown an emotional going-away party by several hundred studio employees. Sources say that senior Disney studio executives personally paid for the party, because the company nixed an official send-off. Eisner was in Florida on business and did not attend.

Those who did show up for the get-together at a Santa Monica Airport hangar likened it to an Irish wake. "People still had a little disbelief, but this made it real," said one. "People were sad and angry. It signaled the breakup of the team that had been together 10 years."

Katzenberg and his wife, Marilyn, spent the night individually saying goodby to Disney staffers. He then cited his pride in Disney's accomplishments in a very brief speech. Senior executives had planned to show a video made in Katzenberg's honor but ultimately decided it was too private. Since life goes on in work-obsessed Hollywood, the party ended at 11 p.m.

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