Biondi Departs Universal; Meet Joe Black Gets Lukewarm Reception
The departure of 53-year-old Biondi comes at a time when Universal is in a box-office slump. Its latest big-budget offering, Meet Joe Black, has been hammered by critics and given the cold shoulder by moviegoers. The $90 million, three-hour-long film starring Brad Pitt had taken in only $15.6 million as of November 16. Babe: Pig in the City, Universal's all-ages holiday fare, was still in post-production as of early last week, despite a scheduled debut for the coming weekend.
Biondi has a history of being apparently non-productive but extremely well-compensated. After Sumner Redstone fired him from the chief executive's job at Viacom three years ago, Biondi landed a five-year, multimillion-dollar contract with Seagram. Last June, he received $1 million in salary, a $5 million bonus, $620,000 in "other compensation," and Seagram stock options estimated to be worth between $5 million and $12 million. Not bad for a guy who didn't "deliver anything major in terms of the profitability of the divisions he ran," in the words of portfolio manager Philip Foreman of WM Advisors Inc.
Seagram is imposing a massive reorganization on Universal, in which CEO Edgar Bronfman, Jr. will take a more personal role. Several high-level executives left Universal earlier this year, including Marc Platt, who was president of film production. "The reorganization is very good for Seagram, given the recent performance," says analyst Jessica Reif Cohen of Merrill Lynch. In a prepared statement, Bronfman commented that "The changes will help us to be a more competitive and aggressive organization, better able to manage our entertainment assets for sustained growth and profitability."
From its origins in the liquor business, Seagram has greatly expanded in the past several years, primarily into the entertainment industry. In addition to its beverages division, the conglomerate now owns the Universal film and music companies and the Universal theme parks. A $10.4 billion purchase of PolyGram is expected to be completed by the end of this year.
Bronfman has been aggressive in his pursuit of growth for the company, but he hasn't always been wise in his allocation of funds; the Biondi fiasco is just one of many wrong moves made by Seagram's top gun. Last year, Bronfman decided that Universal Studios' revolving-globe logo needed modernizing. The Wall Street Journal reported that he spent more than $750,000 on the makeover, only to decide that the old one was actually better. The final result looked almost identical to the original, but slightly updated---something he could have gotten by giving a handful of movie tickets to any high-school kid with a personal computer.