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Tue, 01 Dec 1998 19:04:04 -0700
More turmoil ahead at Seagram as PolyGramdeal nears
By Sue Zeidler
LOS ANGELES (Reuters) - When Seagram Co. Ltd. completes its
$10.2 billion acquisition of PolyGram NV (NYSE:PLG - news), which
could be as soon as next week, it is likely to trigger not only the
most massive restructuring in music history but also more turmoil
at the entertainment giant.
Seagram Chief Executive Edgar Bronfman Jr.'s foray into the
entertainment industry so far has been hit by box-office
disappointments, but the music lover and sometime songwriter
has been doggedly working on plans to make his purchase of the
music giant PolyGram sing.
``The pressure's really on Bronfman to boost results after the
PolyGram deal,'' said Steve Cesinger, managing director of Greif
& Co.
On Monday, Universal Pictures chief Casey Silver got the ax --
becoming the second high-level head to roll in as many weeks
at the troubled studio -- following a dismal year at the box office
and a particularly bad debut for the ``Babe'' sequel.
At the time, Bronfman, 43, announced a restructuring to give him
more control over operations as the company nears the completion
of the PolyGram deal, which will create the world's biggest music
company.
According to sources familiar with the situation, Seagram plans
to consolidate its U.S. music division into four large groups, two on
the East Coast and two on the West Coast.
Each of the U.S. units would be pared to about 100 acts and 175
employees and would be targeted to generate at least $200 million
a year in album sales.
The combined music company, commonly referred to as Unigram
in music circles, is expected to rely heavily on PolyGram overseas,
where it has led the industry for a decade.
Interscope co-founder Jimmy Iovine would be in charge of the new
[West Coast] group. Sources said Universal plans to buy the half of
Interscope it does not own. Universal bought 50 percent of Interscope
three years ago for $200 million.
The Interscope/Geffen/A&M unit will be the largest of the U.S. groups,
with expected yearly sales topping $300 million.
-- Prarit....[email protected] U2 news: http://www.members.home.net/u2-news/u2.html
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