Bronfman/15inches/LK1st/jc2nd/mark2nd
By FRANK SWERTLOW
Staff Reporter
With its movies stumbling badly at the box office and its top executives being ushered out the door, Universal Studios Inc. is looking more and more like a bad investment for Seagram Co. Ltd. and its chief executive, Edgar Bronfman Jr.
The studio’s latest flop is “Primary Colors,” which despite being plugged on the cover of Time magazine is likely to fall out of the weekend top 10 after just five weeks in release. It’s just the latest in a string of disappointments, including “Dante’s Peak” and “Blues Brother 2000.”
Howard Weitzman was ousted two weeks ago as executive vice president of corporate operations, and production chief Marc Platt announced he was leaving the studio last week.
The rumor mill is rife with speculation that Universal Chairman Frank Biondi and studio President Ron Meyer might be the next to go.
On top of that, Universal officials were forced last week to deny a New York Post story that the studio was about to be acquired by DreamWorks SKG, which has been looking for a home and whose co-founder, Steven Spielberg, is already based on the Universal lot.
“Unequivocally, it is just a rumor,” spokeswoman Iris Gelt said last week. “There is no truth to it.”
One thing is certain: Bronfman is taking a larger, and more public, role in the company.
Bronfman, who has seldom appeared at public forums since Seagram acquired Universal in 1995, made two appearances in recent weeks first at a New York media conference in late March and again last week at an Advertising Club of Los Angeles luncheon.
At the Ad Club lunch, Bronfman denied he has plans for mass firings or executive suite shuffles.
“It is easier to cut and burn than support your own people,” Bronfman said. “We are going to have to be patient.”
Patient? Industry experts were not convinced.
Universal “needs shaking up, and that is what he is doing,”
said Jessica Reif Cohen, an analyst at Merrill Lynch in New York.
Since taking control of Universal, Bronfman has spent $100 million on consultants to try to help the studio operate like other businesses.
To bolster studio income, he has proposed increasing the price of a movie ticket, now $8 in Los Angeles, to correspond with the budget of a film. The higher the cost of production, he has argued, the higher should be the price of a ticket.
The idea has met with little enthusiasm from movie-goers, studio competitors and theater owners. Nonetheless, Bronfman floated the notion again last week in Los Angeles.
He also sold off much of Universal’s television division to his longtime friend Barry Diller, which added $1 billion to the net worth of the company.
“I think there is a lot of pressure on Edgar one way or the other to reduce losses,” said Alan P. Kassan, an analyst at the investment bank of Deutsche Morgan Grenfel in New York. “We’ve seen this pattern before. The press starts to get on a CEO like they did with (Viacom Inc. Chairman) Sumner Redstone, and then he finds someone to turn Blockbuster video around and he is a genius. I bet he (Bronfman) is next year’s genius.”
