What now, Edgar?
Warner Bros. co-head Terry Semel has decided to "stay home," as he put it, dashing any hopes that Seagram Co. Chairman Edgar Bronfman Jr. and MCA President Ron Meyer may have had to lure the seasoned executive over to help run the show.
The truth is, neither Bronfman nor Meyer, one of Semel's closest friends, really held out much hope that Semel would leave his 20-year nest at Warner to become chairman and chief executive at MCA. Nor was it a given that Semel would have been the right candidate for the MCA post.
Some say Semel and Meyer share enough similar qualities--particularly with their main strength being movies and talent relationships--that their responsibilities at MCA might well have been redundant.
Then again, there are those who believe Meyer may be in over his head and might have benefited from Semel's broader knowledge of the industry.
Meyer, who helped build Creative Artists Agency into Hollywood's most powerful talent house, spent 30 years as a successful agent to the stars and naturally has less experience running a diversified company than Semel does.
With his years as head of Hollywood's most consistently successful studio, and the fact that he and longtime partner Bob Daly not just oversee movies, but television, theme parks, consumer products and merchandising, Semel might have brought an added dimension to MCA's new operational team.
But there are many industry insiders who believe Semel never had any intentions of leaving Warner and, as one studio chief put it, "just played the 'I'm going to leave card' " as leverage in renegotiating a better deal for himself at Warner. Semel publicly acknowledged last week for the first time that he had considered leaving, possibly for MCA, if things didn't work out.
He and Daly got what they had long wanted. Not only do their new contracts provide them a bigger piece of the Time Warner pie with the company's successful music operation being put under them, they're now rid of their arch nemesis, Warner Music Group Chairman Michael Fuchs.
As for Bronfman and Meyer--neither of whom would comment--sources close to the two say they were never actively seeking a chief executive and still aren't.
Both are concentrating heavily on trying to learn as much as they can about MCA's business. Eventually, sources say, Bronfman will determine whether or not there's a need for a chief executive.
"My guess is he won't," said one MCA executive.
"Ronnie's job is to be a leader and Edgar's job is to point the direction in which he is headed," said the source. "He [Bronfman] is not a micro-manager." The source added, "I think Edgar is our chairman and CEO whether he takes that title or not."
The more Meyer is on the job, the more confident he's becoming, sources close to the executive observe. They say he's aggressively managing the company on a day-to-day basis, while Bronfman is largely concentrating on longer term strategic direction MCA will take.
Bronfman, too, appears to be increasingly comfortable in his new world.
Much of the time he used to spend traveling internationally, he now spends at MCA headquarters in Los Angeles. He's dividing his time about 50/50 between Los Angeles (where he rents a home in Malibu) and New York. And, because of the steep learning curve he has at MCA, Bronfman is devoting more than half his time to the entertainment side of Seagram's business than to the beverage side, which he knows well.
Judging from the swift actions taken since Seagram took over an 80% ownership of MCA this summer, Bronfman is aggressively looking for ways to increase shareholder value and dramatically improve MCA's margins, which under the prior regime were significantly worse than any other of the company's competitors--particularly in film and TV.
Bronfman and Meyer have already begun to clean house.
Late last week, MCA music chief Al Teller was ousted and Doug Morris installed as his successor. While the music operation may be MCA's most profitable division, it has been losing ground in country and black music and has never gained a foothold in the lucrative rock market. MCA only ranks fifth in domestic ratings and internationally is severely behind its competitors.
"He [Teller] couldn't grow the division . . . it needed a shot in the arm," said an MCA insider.
In late August, Tom Wertheimer was forced out as chairman of MCA TV Group and executive vice president of MCA Inc., cutting another tie to the former regime. After months of seeking a replacement, Meyer hired former Twentieth Television President Gregory Meidel as Wertheimer's successor.
MCA's TV business, which is marginal at best with mostly a handful of old shows airing on the networks, is badly in need of being reinvigorated.
Monday, as expected, Casey Silver took over as the studio's Motion Picture Group chairman, a post formerly held by current MCA Vice Chairman Tom Pollock.
MCA's Universal Pictures has historically had fewer hits than its rivals and its hits have often not delivered the kind of profit its rivals see. That's in large part due to the fact that Steven Spielberg, whose Amblin Entertainment has provided many of the studio's biggest pictures, has walked away with the lion's share of profit on the movies he directs and produces.
Under Spielberg's new DreamWorks endeavor with David Geffen and Jeffrey Katzenberg, MCA won't be risking any production or marketing dollars but will simply be paid a distribution fee to release the start-up's movies theatrically overseas and on video.
Just as on the TV side MCA is expected to be much more aggressive in signing writer-producer deals, so on the movie side is the studio expected to make some major alliances with filmmakers in the coming weeks. And, to help keep costs down, Universal is also expected to improve its development to production ratio--i.e. make more of the movie projects it develops.