Angered MCA Execs Kept in Dark While Matsushita Negotiates Sale
E. SCOTT RECKARD
Apr. 07, 1995
UNIVERSAL CITY, Calif. (AP) _ Matsushita bargained to sell MCA Inc. to Seagram Co. without telling the executives who spent more than nine decades running the entertainment company, MCA's president says.
``We have heard not a single word from the Matsushita people,'' Sidney J. Sheinberg said in an interview Thursday. ``In an odd way it saddens me more than makes me angry. I've learned in the past how they behave.''
To executives at MCA, such a snubbing would be only the latest in a long list of troubles that have plagued relations between MCA and its Japanese parent.
Since Matsushita Electric Industrial Co. bought MCA in 1990 for $6.6 billion, the former talent agency has felt shackled, unable to make acquisitions and deals it felt necessary for Hollywood growth.
MCA was the talent agency Music Corporation of America when founder Jules Stein promoted Lew Wasserman to president in 1946. Wasserman is now chairman.
With movie attendance dwindling, MCA got into television production in the 1950s. Known as the Octopus for its far-reaching powers, it bought the faltering Universal Pictures movie studio in 1959 and sold the talent agency to satisfy anti-trust laws.
Since 1973, Sheinberg has been president of MCA, home to ``Jaws,'' ``E.T.,'' ``Jurassic Park,'' ``Murder, She Wrote,'' the Universal Studios theme parks, and the MCA and Geffen record labels.
Sheinberg and Wasserman had thought Matsushita would leave them free to build MCA in an era of consolidation, new entertainment genres, alliances with telephone, cable and other companies offering new distribution pipelines.
Instead, such proposals as buying Virgin Records or joining in a bid for CBS were rejected _ even using stock instead of cash.
In the end, Sheinberg said, it became unpleasant even to listen to new proposals, knowing that they probably would be vetoed.
``You simply don't focus (on new proposals). And as you don't focus on those kind of investments the world passes you by,'' he said.
He and Wasserman had told Matsushita that without the autonomy they had expected, they would quit when their contracts run out at the end of 1995.
Sheinberg declined to talk about his future, specifically whether he might team up with Steven Spielberg, David Geffen and Jeffrey Katzenberg at their DreamWorks studio.
Spielberg and Geffen, refugees from MCA, had said they would consider having MCA distribute their films _ but only if Sheinberg, a near-father figure for Spielberg, remained.
Top MCA executives said Sheinberg doesn't expect to stay on even if asked by Seagram. One, speaking on condition of anonymity, described the company as in near-chaos, with workers jockeying for the best positions after a sale.
Matsushita's shackling of MCA executives leaves the company in need of heavy investment to realize its potential, PaineWebber analyst Christopher Dixon said. He figures the company will be unable soon to equal its near-record operating earnings of $400 million last year.
Its movie division will be hard-pressed to top its performance last year, when Spielberg's ``Jurassic Park'' and ``Schindler's List'' were released.
Worst of all is the reputation for being sidelined at a time of rapid change in the entertainment industry.
``The reality is you want to play. And the reality is that MCA is out of the game,'' Dixon said. ``In Hollywood, to be out of the deal flow spells death.''