Universal Film Unit Big Loser in Seagram Portfolio

Lately, the movie business has been nothing but trouble for Seagram, Ltd. The Montreal-based liquor and entertainment conglomerate reported losses totaling $199 million on a net income of $461 million for its third fiscal quarter, ending March 31.

The loss came despite a 62% increase in revenue---$3.22 billion vs. $1.99 billion---for the same period a year ago. The company's stock has risen 50% in the past year, after its multi-billion-dollar purchase of PolyGram NV made the Universal Music Group one of the world's major players. Seagram sold most of its shares in Time Warner and its television production business to offset the PolyGram purchase. Seagram's CEO, Edgar Bronfman, Jr., predicted that cash flow from his music division would equal about $850 million for the current fiscal year. The company's liquor and theme-park divisions are also doing well---cash flow for liquor rose 20% for the quarter, and doubled at the theme parks.

But Universal Studios, Seagram's film division, is in a slump and shows no signs of pulling out of it. Universal Studios has churned its management in the past several months without a noticeable improvement in box-office receipts. A series of films that failed to catch fire with the viewing public---such as Meet Joe Black---has contributed to the problem.

The company's most recent box-office flop is EDtv, whose poor performance is a loss for Universal and movie fans alike. EDtv wasn't well promoted, and has suffered from following in the wake of The Truman Show, to which it has been erroneously compared. The two share a premise, but the similarity ends there. The Truman Show is about a man who slowly discovers that everything he thought was real is fake, and sets out to discover what reality is. EDtv is about a career slacker who agrees to put his life on TV 24 hours a day, and in the process discovers strength of character he never knew he had. Seagram, Universal Studios, and Edgar Bronfman, Jr. will all survive quite nicely whether EDtv breaks even or not, but moviegoers who haven't seen it may find that it's an undiscovered treasure. The film is still playing at theaters throughout the country.