Seagram Hopes to Announce Ovitz Signing Next Week : Executives: But the Creative Artists Agency chairman is wavering about accepting the post, sources say.

Seagram Co. Chief Executive Edgar Bronfman Jr. appeared closer Thursday to signing talent agent Michael S. Ovitz to head MCA Inc., with sources saying that Bronfman hopes to finalize and announce the deal as early as next week.

However, sources close to Ovitz said the Creative Artists Agency chairman has been wavering, and they insisted that as of Thursday he was still undecided. Still, many Hollywood executives said they now believe the move is a fait accompli .

Ovitz and CAA declined to comment. Both have consistently said over the past two months that Ovitz is not negotiating to take the job.

Sources said Bronfman has been planning to fly to Los Angeles on Monday. Should Ovitz agree to a deal in the next few days, an announcement could come as early as Tuesday.

But first, Seagram is preparing to announce Monday that its $5.7-billion acquisition of 80% of MCA from Japan’s Matsushita Electric Industrial Co. is final, following the expiration of time for any potential challenges under the Hart-Scott-Rodino Antitrust Improvements Act. The deal was recently cleared by European and Canadian officials.

Sources close to Ovitz denied reports that a preliminary agreement has been reached between him and Bronfman, although Hollywood executives said they believe basic parameters have probably been worked out.

If a preliminary agreement was worked out earlier this week, that would appear to contradict a statement made by Bronfman at the annual shareholders meeting Wednesday in Montreal.

At the meeting, Bronfman said: “No decision has been made with regard to management at MCA. It would be inappropriate to do so before we close the transaction.”

Asked about that statement Thursday, Seagram spokesman Chris Tofalli said: “We stand by what he said. We don’t want to contradict him.”

A Seagram senior executive reiterated Bronfman’s remarks, saying a final decision on who will run MCA still had not been made as of Thursday.

Nonetheless, sources said Bronfman clearly wants Ovitz and is doing everything he can to lure him to MCA, including offering a huge compensation package said to be worth at least $250 million.

The two are close friends, and Ovitz has counseled the 40-year-old beverage and spirits heir in his entertainment investments that started when Bronfman bought nearly 15% of Time Warner Inc. two years ago. Seagram agreed to buy control of MCA--parent of Universal Pictures, MCA Music and the Universal Studios theme park--from Matsushita in April.

Regardless of what Ovitz does, rival agencies are already trying to take advantage of the uncertainty at CAA. Said one top United Talent Agency agent: “We’d be crazy not to.”

Other agencies “are working overtime to take full advantage of” the uncertainty, said one entertainment lawyer. “If they weren’t, they’d be conducting agent malpractice.”

Sources said Ovitz called a general staff meeting Thursday night to ease anxiety at the agency amid the media blizzard over his possible departure.

Much of the speculation concerns which CAA agents Ovitz might take with him.

Names often mentioned include Sandy Climan, who handles CAA corporate deals; motion pictures head Jack Rapke, and former AT&T; executive Robert Kavner.

Should Ovitz, 48, go to MCA, he would probably bring MCA in as a partner in Tele-TV, a joint venture of regional phone companies Pacific Telesis, Bell Atlantic and Nynex that Ovitz has been advising. Sources said that those companies have a “key man” clause allowing them to opt out of the project should Ovitz leave CAA.

Two studio chiefs said they are skeptical of rumors that Ovitz may take a batch of CAA agents, because it would not be in his interest to weaken the agency in any significant way.

“He’s not going to leave an unsteady agency behind, because he wants to use it. That would be dumb,” one of the chiefs said.

One also noted that talent contracts typically require that from one to five agents leave before a star can legally jump ship.

The clauses are written into contracts to protect against an exodus when an agent leaves or dies. For that reason, some Hollywood executives are skeptical of rumors that CAA President Ron Meyer would join Ovitz, since Meyer is undoubtedly one of the key agents listed in many contracts.

Ovitz would still need to work out an agreement to sell his majority stake in the agency while minimizing the tax consequences. Some have valued his 56% stake at about $200 million or more, although one studio chief noted that any numbers are highly speculative because “no more than four people have probably seen [CAA’s] books over the years.”

Still another possibility to allow Ovitz to cash out his stake would be a sale of the agency to a third party interested in getting into Hollywood, a move that could also free up CAA partners Meyer and Bill Haber to join MCA. The agency would presumably be run by some remaining senior agents as well as CAA’s younger, increasingly powerful agents, some of whom are known in the industry as “the Young Turks.”

Neither MCA nor Seagram could legally buy it, so the possibilities might include some sort of Bronfman-guaranteed financing that would be paid off with cash flow over time.

CAA rivals are quick to add that they hardly expect CAA to come tumbling down overnight. They have a healthy respect for the agency and talent pool of agents who would remain. And they believe Ovitz would try to leave the agency in a healthy condition.

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Free-lance writer Judy Brennan contributed to this report.