COMPANY TOWN: SPOTLIGHT ON MCA : MCA, the Thriller : Tension High as Leaders Head Into Matsushita Meetings

When MCA’s corporate jet lifts off today, the ambitions of MCA President Sidney J. Sheinberg will take flight as well. He and MCA Chairman Lew R. Wasserman are traveling to meet with senior executives from Matsushita Electric Industrial Co. to discuss the strained relations between the Japanese parent and its frustrated Hollywood subsidiary.

By all accounts, Sheinberg is not seeking a “High Noon” showdown, but this meeting and others to follow will help determine whether the 59-year-old executive stays with MCA after his contract expires next year. For Sheinberg and the 81-year-old Wasserman, the emotional stakes are high because they are the only executives--other than the late MCA founder Jules Stein--to have headed MCA in its 70-year history.

Osaka, Japan-based Matsushita called for the meeting in the wake of MCA’s distress several weeks ago when it was blocked from pursuing a bid to acquire a stake in a broadcast network (reportedly NBC), several sources said Monday.

But the get-together became public knowledge only when two of MCA’s most talented associates--filmmaker Steven Spielberg and music and film mogul David Geffen--announced last week that they intend to launch a new studio with former Walt Disney Studios Chairman Jeffrey Katzenberg. Reports swirled that the three businessmen might back a bid for MCA if Wasserman and Sheinberg proposed a buyback of all or part of the company they sold in 1990.

News reports of the ongoing talks and conjecture about a possible buyback deal are said to have angered executives at Matsushita, who are sensitive to public criticism. One source said Sheinberg was also angry about the leaks.

Because of the barrage of publicity, MCA officials were taking pains Monday to clamp some secrecy on today’s meeting, now at an undisclosed spot after earlier reports had it taking place in Hawaii.

Sheinberg tried to downplay the drama of the upcoming session, saying: “I really have no vendetta against this company or many of its people, which is not to say relations are not strained between certain people. Hopefully these discussions will yield opportunities to enhance the value of their assets.”

MCA insiders--including Sheinberg--refused Monday to discuss any hope Sheinberg and Wasserman might harbor of buying back a stake in MCA. Pundits, meanwhile, expressed the opinion that Geffen, Spielberg and Katzenberg will seek a controlling stake if they bid for an existing studio--and MCA turns out to be too expensive for even their bank accounts.

Alan Kassan, an entertainment analyst at Morgan Stanley, estimated MCA is worth between $8 billion and $8.5 billion; others think it could fetch even more, given that Paramount Communications sold for $10 billion.

But some analysts are doubtful that Matsushita will consider selling any portion of the entertainment company. “The Japanese don’t sell things,” said Lee S. Isgur, a San Francisco-based analyst with Jefferies & Co. “I think the Japanese got involved in this because they believe wealth and power are measured by content.”

The gush of publicity, however, may hurt MCA’s negotiations. “This is not the way to conduct business in New York or Japan,” one top entertainment company executive said reprovingly.

Still, after months of suspense, some MCA insiders are thrilled that Sheinberg and Wasserman seem prepared to go to the mat for the company. “The way it’s set up now is not working,” said one executive who has despaired of Matsushita’s conservative ways and preoccupation with other problems in its consumer electronics business.

Troubled Talks

MCA Chairman Lew R. Wasserman and President Sidney J. Sheinberg are in troubled contract negotiations with their parent company, Matsushita. Though MCA’s Universal Studios ranks reasonably well in film market share, entertainment is a small part of Matsushita’s revenue. The company’s record division (UNI), however, is lagging. Steven Spielberg, a hit maker for Universal, is key to negotiations.

Film Market Share (Jan. 3-Oct. 16):

Buena Vista: 19.0%

Paramount: 15.0%

Warner Bros.: 14.8%

Universal: 13.8%

Fox: 10.8%

Others: 26.6%

*

Entertainment: 8.2%

Audiovisual equipment and appliances: 42.2%

Information, communications and industrial products: 49.6%

Music Market Share (Jan. 3-Oct. 9):

WEA: 22.05%

Sony: 15.45%

BMG: 13.05%

PolyGram: 12.01%

CEMA: 11.27%

UNI (MCA): 10.63%

Universal’s top films

(Spielberg projects are in bold and with a double (**) asterisk.)

Box office (million) E.T., The Extra-Terrestrial $399.8 Jurassic Park** $356.7 Jaws $260.0 Back to the Future $210.6 The Sting $156.0 National Lampoon’s Animal House $141.6 The Flintstones** $130.5 Smokey and the Bandit $125.0 On Golden Pond $119.3 Back to the Future II $118.5

Sources: TradeLine; Entertainment Data Inc.; company reports; industry sources

* Box office revenue still being tracked