Word: mca
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Dates: during 1990-1999
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Imagine if two battling behemoths like King Kong and Godzilla decided to join forces. Talk about a knockout combination. That's how the entertainment industry reacted last week to the disclosure that Japan's Matsushita Electric Industrial, the world's largest maker of consumer electronics, is negotiating to buy MCA, the American show-business giant, in a deal that could be worth more than $7 billion. The acquisition would represent an even more titanic version of the hardware-meets-software combination pioneered by Matsushita's rival Sony, which bought CBS Records for $2 billion in 1988 and Columbia Pictures...
...MCA (1989 revenues: $3.4 billion), based in 420-acre Universal City, Calif., is like a department store of American amusement. MCA's Universal divisions have produced such blockbuster films as The Sting, Jaws, E.T. and Back to the Future, as well as such TV programs as Major Dad and Murder, She Wrote. Universal Studios Tour in California is the third most popular amusement park in the world, after Disney's two U.S. attractions. MCA Records is a hit factory with platinum stars that include Tom Petty, Bobby Brown and Fine Young Cannibals. In book publishing, the company owns G.P. Putnam...
...everything has gone smoothly for MCA lately. Cineplex Odeon theaters, an upscale venture that charges as much as $7.50 for a ticket, lost $12 million in the first quarter of this year after expanding rapidly. And the $640 million Universal Studios amusement park in Florida, which opened in June, has been plagued by technical failures. But MCA chairman and patriarch Lew Wasserman, 77, apparently believes MCA's biggest strategic shortcoming is its failure to find a merger partner that would enable it to compete with such giants as Fox Inc. and Time Warner...
Matsushita faces another challenge, which is the difficulty of blending its conservative corporate culture with MCA's Hollywood approach. The clash was less pronounced for Sony, which is considered more worldly and innovative. As did Sony, Matsushita is paying for the services of a Hollywood matchmaker, superagent Michael Ovitz of Creative Artists Agency, who is acting as middleman...
Sensitive to the brewing backlash against Japanese investors, Matsushita officers are taking pains to characterize the MCA bid as a proposed "merger," a word with less aggressive overtones than "takeover." While many Japanese bureaucrats are uncomfortable about Matsushita's high-profile shopping trip, the government would not interfere with the acquisition of MCA. The Japanese know that in the 1990s hardware and software will go together like song and dance...