1996 Proves a Less-Successful Sequel to ’95

The year 1995 was marked by a New Year’s Eve-like giddiness celebrating some of the biggest mergers in the history of the entertainment industry.

The year 1996 seemed like the morning-after hangover. A lot of heads rolled, and companies realized that their acquisitions were full of problems. And a former studio owner, who everyone thought was out of the business, came back with a roar by buying Leo the Lion.

Here’s a look back at some of the biggest stories and issues confronting the entertainment business in 1996.

1. Corporate Tagamet Needed

The year 1996 proved that merger digestion can quickly turn into indigestion.

At Walt Disney Co., ABC proved more problematic than anyone realized as the network’s prime-time ratings went into the tank. Disney hired NBC programming whiz Jamie Tarses, hoping that she can work some magic into the schedule.

Over at Viacom Inc., the company’s acquisition of the Blockbuster chain of video and music stores continued to disappoint many investors.

Blockbuster’s soft results led, in part, to the dismissal of Viacom Chief Executive Frank J. Biondi Jr., who landed on his feet when he was named CEO of MCA, now Universal Studios Inc. Viacom hired former Wal-Mart executive Bill Fields to try to set Blockbuster on the right course.

Time Warner proved skeptics wrong by managing to complete its acquisition of Turner Broadcasting Systems. But the company has yet to prove to investors, already disappointed over the inability of Time and Warner to develop much “synergy,” that it can make the Turner deal work well. The company’s stock continues to languish where it has for the past three years.

2. Can’t We All Get Along?

Feuds in entertainment come with the territory. But 1996 proved to be one of the nastiest years in memory.

Universal Studios and Viacom Inc. got nasty in a Delaware court in a dispute over Viacom’s decision to launch a new cable channel, which Universal contends violates their joint ownership agreement of USA Network. Neither side came off looking good when testifying in the trial, especially Viacom Chairman Sumner Redstone and Edger Bronfman Jr., CEO of Universal parent Seagram Co.

DreamWorks SKG continued to feud with Walt Disney Co., with partner Jeffrey Katzenberg suing Disney for $250 million he says he’s owed in unpaid bonuses.

Some of the enemies Michael Ovitz made while Hollywood’s top talent agent celebrated when he finally agreed to leave Walt Disney Co. after an aborted stint as company president under Chairman Michael Eisner.

NBC West Coast head Don Ohlmeyer called Michael Ovitz “the antichrist” in a feud stemming from Ovitz’s recruitment of NBC executive Jamie Tarses to ABC.

But no feud came close to the dispute between moguls Rupert Murdoch and Ted Turner. Turner compared Murdoch with “the late Fuhrer” and called him a “scumbag.” Murdoch’s New York Post got personal with Turner, dredging up the old “Hanoi Jane” tag for Turner’s wife, Jane Fonda, stemming from her controversial visit to Hanoi during the Vietnam War.

3. So Many Movies, So Little Time to See Them

Nearly everyone in Hollywood complained about the glut of movies being released by studios, and how they cut into each other’s results at the box office.

Studios paid a lot of lip service to the idea that they will release fewer movies in the future, but few are following through.

Compounding the problem was the skyrocketing cost of making movies--several stars broke the $20-million-a-film mark--and the huge amounts of money needed to market them.

4. Make Sure the Door Doesn’t Hit You on the Way Out

Hollywood’s revolving door revolved quite a bit faster in 1996.

Thank Sony Pictures for much of that. President Alan Levine was ousted for former United Artists President John Calley. Movie chief Mark Canton also was sent packing. Other departures for production deals or other studios included Columbia President Lisa Henson, marketing chief Sid Ganis, TriStar President Marc Platt and TriStar production chief Stacy Snider.

Sony wasn’t the only place that saw turnover. The highest-profile departure was Michael Ovitz as president of Disney after just 14 months on the job. Sumner Redstone fired Chief Executive Frank J. Biondi Jr., who ended up at Universal Studios Inc.

5. Not Always the Happiest Place on Earth, or Even in Burbank

The shake-up in the executive suite at Disney, culminating with the Ovitz departure, wasn’t the only thing that kept the company in the news.

Disney was under attack by religious groups and others, which complained about some of the company’s adult-oriented movies and its policy of offering health benefits to partners of gay employees. China expressed displeasure with an upcoming film about the Dalai Lama, which put Disney on the spot before it formally declared it would continue to support the film project.

The company stumbled over ABC’s prime-time schedule, and “The Hunchback of Notre Dame,” although solidly profitable, didn’t perform as well as Disney’s previous animated hits such as “Aladdin,” “The Lion King” and “Pocahontas.”

6. Sony Doesn’t Pull the Plug . . . Yet

The housecleaning of Sony management was only part of the story.

The company’s film division had a dismal year with such disappointing films as “The Cable Guy,” “Multiplicity” and “The Fan,” although it ended on an up note with the Tom Cruse film “Jerry Maguire” and big critical reviews for “The People vs. Larry Flynt.”

Its executives continued to take a lot of heat for such moves as paying Jim Carrey $20 million to star in “The Cable Guy” and giving a production deal to actress Alicia Silverstone, who is barely out of high school.

Sony’s dismal box-office performances renewed speculation that the Japanese electronics company will throw in the towel on Hollywood.

The company continues to deny that it will sell, and also denies that it plans to bring in Michael Ovitz to run its entertainment operation, despite having conversations with him. For the first time, Sony placed on its Culver City lot a senior Japanese executive to keep close tabs on things.

7. The Sound of Controversy

Music continued to be a lightning rod of controversy.

Critics such as William Bennett focused on MCA as a target for its relationship with Interscope. The rap world saw the gunning down of Tupac Shakur, and the jailing of rap mogul Suge Knight on probation violations.

Wal-Mart chose not to carry the latest album by singer Sheryl Crow because it contained a lyric suggesting that Wal-Mart sells guns to minors.

8. Sour Notes at Cash Registers

For the second year in a row, music sales were flat. Except for a handful of artists such as Celine Dion and Alanis Morisette, blockbuster hit records were rare.

Music retailers are suffering due to shrinking demand for older compact discs from their catalog and fierce competition from such aggressive retailers as Best Buy.

9. Kirk Rolls the Dice

Las Vegas casino owner and former studio owner Kirk Kerkorian shocked nearly everyone by emerging as the winning bidder when he and Australian partner Seven Network teamed up with the management of Metro-Goldwyn-Mayer to buy the studio for $1.3 billion.

Kerkorian wants to prove his critics wrong by rebuilding the studio, which critics say he stripped bare when he owned it previously. Internally, sources have said that Kerkorian is in disagreement with MGM Chairman Frank Mancuso over budget matters, specifically the size of MGM’s overhead.