Seagram Unit Fires Chief of PolyGram Filmed

PolyGram Filmed Entertainment chief Michael Kuhn on Thursday became the first executive casualty in PolyGram’s movie division stemming from Seagram Co.’s $10.4-billion takeover of the music and film giant.

Sources said executives from Seagram’s Universal Studios Inc. unit told Kuhn of their decision Wednesday on the eve of Thursday’s formal takeover of PolyGram.

Sources said Kuhn, who led music giant PolyGram’s push into Hollywood, is so far the only executive to lose his job. They said decisions on the fates of the hundreds of other executives in PolyGram’s movie units will come later.

On Thursday, Seagram announced that it would begin to integrate PolyGram’s film operations into Universal for now as part of its takeover of PolyGram from the Dutch-based Philips Electronics.

Seagram has failed to find a buyer for the movie operations, whose films have included “Four Weddings and a Funeral,” “Fargo” and “Bean.” It did cut a deal to sell PolyGram’s film library to Metro-Goldwyn-Mayer Inc. for $235 million in cash.

Although pieces of the PolyGram operation could still be sold, Universal sources said the company is preparing to mesh most of the operation into Universal.

Chris McGurk, president and chief operating officer of the Universal Pictures unit, has been lobbying hard to retain most of the operation, such as PolyGram’s specialized film distributor, Gramercy Pictures, and its successful London-based operation, Working Title.

PolyGram’s film and video group will report to McGurk, while its TV operation will report to Universal Television and Networks Group Chairman Blair Westlake.

In a statement, Universal Studios President Ron Meyer said the company continues to explore the sale of PolyGram’s film operation, but “we believe that a substantial portion of [PolyGram Film] is complementary to Universal’s filmed entertainment operations and globalization strategy,” Meyer said.

Universal’s film operation has been in chaos.

Earlier this month, film Chairman Casey Silver was fired in the wake of two disappointing films, “Meet Joe Black” and “Babe: Pig in the City.” Earlier this week, Seagram said that Universal’s film unit will show a pretax loss of $65 million in the quarter ended Dec. 31. A year earlier, Universal’s movie operation had earnings of $98 million before interest, taxes, depreciation and amortization.