Universal Studios Chief Expected to Get the Ax

Seagram Co. chief Edgar Bronfman Jr. is planning a major restructuring of his liquor and entertainment conglomerate that sources say will put Universal Studios Chairman and Chief Executive Frank J. Biondi Jr. out of a job by next month.

The 53-year-old executive, who has 2 1/2 years left on his contract, has been haunted by rumors of his demise for the last year, ever since Bronfman announced a deal to sell a controlling interest in Universal’s cable television business to Barry Diller. The surprise sale, which blindsided Biondi, stripped him of the area in which he had his most experience as an executive.

Biondi said Thursday that he considers himself a victim of “rumormongering,” adding, “No one has said anything to me, and I’m not leaving.” Said a Seagram spokesman, “I never comment on rumors and speculation.”

But one source told The Times that Biondi had not yet been informed that he is being let go--which is far from unheard of in Hollywood, where top managers sometimes learn their fate from media reports.

Sources said Biondi’s departure is expected to coincide with Bronfman’s reorganization of Seagram when the company completes its $10.4-billion acquisition of PolyGram in December. One scenario, they said, would be to divide the company into three operating units: music, beverages, and movies and theme parks.

Seagram now operates two global business segments: liquor and entertainment. This week, the company announced a reorganization of its beverage business--which accounts for nearly half of Seagram’s revenue--by moving its top management to New York and streamlining operations under one roof.

Biondi, the former chief executive of Viacom Inc., oversees Seagram’s entertainment operations, which include filmed entertainment, television, home video and music as well as theme parks and retail stores.

Some speculate that under a new structure, Universal Studios President Ron Meyer would be put in charge of movies and theme parks. Currently, the movie, music and recreation divisions report to Meyer and he reports to Biondi. One source suggested that Meyer, who before joining Universal was one of Hollywood’s top agents and maintains strong relationships with talent, would take a more hands-on role with the movie division, which has been beleaguered by a prolonged box-office drought.

The division’s poor showing has put the job of its chairman, Casey Silver, on the line. Silver’s future at the studio depends on the performance of the upcoming films “Meet Joe Black,” which opens this weekend amid negative reviews; “Babe: Pig in the City,” which is still not finished, despite its planned Thanksgiving opening; Gus van Sant’s remake of “Psycho”; and “Patch Adams,” a Robin Williams vehicle that many in Hollywood are touting as the film to beat this Christmas.

If the current quarter’s results show another loss on the movie side, sources at Universal say, Silver, too, will be out of a job by early next year.

Following the completion of the PolyGram deal, Bronfman is expected to revamp Seagram’s music business. As reported in The Times this week, a massive restructuring to integrate dozens of businesses in a combined entity called Universal Music Group will result in thousands of layoffs and the shuttering and downsizing of various music labels.

Bronfman is expected to play a strong hands-on role in music, a business in which he has a keen interest and dabbles as a songwriter.

Sources said Biondi has had little involvement in the plans to consolidate the Universal and PolyGram music groups, suggesting that he’s not participating in key decisions about the future of the company.

Biondi Lost Top Job at Viacom

Since acquiring 80% of Universal Studios for $5.7 billion in 1995, Bronfman has been responsible for a dramatic remaking of Seagram--transforming it from a liquor company with investments in the chemical industry to an entertainment-based concern with liquor assets.

He’s under considerable pressure from investors because the company’s stock has trailed the overall market. From the beginning, Bronfman has had trouble settling on managers who can make the company’s entertainment assets perform at full potential.

Rumors about Biondi’s shaky status at Universal began to be heard last fall, when Bronfman acknowledged that his chief executive wasn’t privy to negotiations to sell Universal’s USA Network, Sci-Fi Network and domestic TV production and distribution business to Diller until “we started to get a little traction.”

When speculation ensued about Biondi’s diminished role at the company, Bronfman jumped to his defense, crediting him as a valued executive who helped build a profitable business from one that had been losing $50 million a year when Seagram bought the company.

Turning over most of Universal’s TV business to Diller clearly was a blow to Biondi, who had a long history as a cable executive at Viacom and Time Warner’s Home Box Office.

It also is widely known in Hollywood that there was no love lost between Biondi and Diller. The two executives dueled acrimoniously when they were on opposite sides of the battle to take over Paramount Communications, which eventually became part of Viacom’s empire.

Biondi is well-respected in industry circles and on Wall Street for his financial expertise, deal-making abilities and experience and steadiness in managing diversified entertainment companies. He was recruited by Bronfman shortly after being fired unexpectedly by Viacom Chairman Sumner Redstone in January 1996. Redstone said Biondi’s laid-back management style didn’t fit at a company that had grown to Viacom’s size.

His ouster came as a shock to many in Hollywood and in the financial community who have trouble viewing Biondi as too passive since he was instrumental in such multibillion-dollar transactions as the merger of Viacom, Paramount and the giant home video chain Blockbuster Entertainment.