Seagram Aims to Replace Ousted Biondi, Sources Say

In a reversal of strategy that could signal continuing management turmoil, Seagram Chief Executive Edgar Bronfman Jr. is searching for a high-level executive to oversee the entertainment assets bought by his family’s liquor conglomerate four years ago.

Sources close to Seagram say Leo Hindery Jr., who is credited with saving Tele-Communications Inc. from financial disaster as its president over the last three years, has been approached about stepping into the vacancy left by Frank Biondi, who was fired last fall as chief executive of Seagram’s entertainment division

Those sources said other undisclosed executives have also been approached, but it is unclear whether any offers have been made or whether Bronfman will follow through on these feelers.

The company denied any such overtures by Bronfman or anyone else in the company. “The company has had no conversations with Hindery or anyone else about coming to Universal Studios,” said Tod Hullin, a spokesman for Seagram, adding that Bronfman has “high confidence” in the new management structure he put in place in November.

Bronfman restructured Seagram concurrently with Biondi’s ouster, dividing the Canadian-based company into three divisions--music, Universal Studios and beverages--and placing Universal President Ron Meyer, who oversees theme parks, TV and movies, directly accountable for the movie division, which has suffered from management turnover and a lack of box-office hits. Music was previously part of Universal.

At the time, Bronfman said no replacement was needed for Biondi because he would be playing that role as “an activist CEO.”

But the fresh efforts by Bronfman to add to his top management undermines that commitment, while underscoring the continuing turmoil that has plagued the entertainment group since his family spent $5.7 billion to buy 80% of MCA Inc., which was renamed Universal Studios Inc.

Hindery could not be reached for comment Thursday.

Hullin insisted that no recruitment effort was underway by Bronfman. But one source close to Seagram said Bronfman has been “looking and having discussions” for months with executives.

Bronfman has his hands full with the recently concluded $10.4-billion purchase of PolyGram to create the world’s largest record company. New Internet technologies are threatening to erode the music business just as it has become a centerpiece of Seagram.

Bronfman added to the corporate uncertainty last February when he stunned Hollywood by spinning off Universal’s television assets to Barry Diller, retaining a 45% interest in the resulting USA Networks Inc. While USA’s rising market value since has increased Seagram’s stock, the move was seen as an affirmation of Bronfman’s lack of confidence in his top management team.

Sources said discussions between Hindery and Seagram are formative and that the TCI executive is under contract with AT&T;, where he became president of the cable division earlier this month after the phone giant completed its $44-billion purchase of TCI.

But people close to Hindery say he is unhappy at AT&T; and eager to be closer to his family in the Bay Area. They say he is considering several options.

Hindery’s departure would be a setback for AT&T; Chairman C. Michael Armstrong’s efforts to transform the telecommunications company into a more nimble, entrepreneurial enterprise.

While Hindery has no experience in Hollywood, one source--predicting an immediate jump in the stock should he join--said he is the kind of seasoned manager who could restore Wall Street’s faith in Seagram.

During Hindery’s tenure at TCI, that stock jumped from $14 a share to more than $66 by the time AT&T; completed its purchase.

Hindery also has an intimate understanding of one of Universal’s best-performing assets as a board member, until recently, of USA Networks Inc.