Editing PolyGram (section)

=== Sale to Seagram and divestiture (1998–1999) ===
In 1996, [[Cor Boonstra]] became CEO of Philips; by the time he took over, Philips was seen as a bloated company, laden with too many layers of management and unrelated companies that they could not leverage effectively. As a result, Boonstra began to sell or dispose of various non-core assets.<ref>{{Cite web |title=CAN HE FIX PHILIPS? HECK, CAN ANYONE? NEW CEO COR BOONSTRA IS AN OUTSIDER WHO TALKS A GOOD TURNAROUND GAME FOR THE ELECTRONICS GIANT--BUT MAY HAVE TO MOVE FASTER. - March 31, 1997 |url=https://money.cnn.com/magazines/fortune/fortune_archive/1997/03/31/224067/index.htm |access-date=2024-05-05 |website=money.cnn.com}}</ref> While Philips began to withdraw from other media activities, Boonstra denied that PolyGram was for sale.<ref>{{Cite web |author=Variety Staff |date=1997-07-22 |title=Philips quitting media biz, except for Polygram stake |url=https://variety.com/1997/biz/news/philips-quitting-media-biz-except-for-polygram-stake-1116676468/ |access-date=2024-05-05 |website=Variety |language=en-US}}</ref> However, by early 1998, he had changed his attitude, instead deciding to pursue a manufacturing-only business plan.<ref>{{Cite web |last=Week |first=Marketing |date=1998-06-11 |title=Why Phillips must sharpen up its act |url=https://www.marketingweek.com/why-phillips-must-sharpen-up-its-act/ |access-date=2024-05-05 |website=Marketing Week |language=en}}</ref> (In hindsight, analysts have pointed out how Philips ultimately benefitted from the manufacture and sale of blank CDs, which played a significant part in the [[music piracy]] that began to affect the industry in the early 2000s.)<ref>{{Cite web |last=McCullen |first=Aidan |date=2023-10-27 |title=Killing Your Business While It's Still Working: That (Kodak) Moment |url=https://theinnovationshow.io/killing-your-business-while-its-still-working-that-kodak-moment/ |access-date=2024-05-05 |website=The Innovation Show |language=en-GB}}</ref>

After weeks of speculation, on May 22, 1998, Philips announced that they would sell PolyGram to [[Seagram]] for $10 billion.<ref>{{cite web|url=https://www.independent.co.uk/news/business/seagram-buys-polygram-from-philips-for-106bn-1158030.html|title=Seagram buys PolyGram from Philips for $10.6bn|date=22 May 1998|website=The Independent}}</ref> Some of the reasons cited for the deal were a lack of pop hits from the music side of the company, and an equal lack of box-office successes from the film side.<ref>{{Cite web |last1=Eller |first1=Claudia |last2=Philips |first2=Chuck |date=1998-05-07 |title=Philips Puts PolyGram Empire Up for Sale |url=https://www.latimes.com/archives/la-xpm-1998-may-07-fi-47137-story.html |access-date=2024-05-05 |website=Los Angeles Times |language=en-US}}</ref> Alain Levy resigned as CEO of PolyGram on June 23 to prepare for the merger,<ref>{{cite news |title=Chief Executive at Polygram Resigns |url=https://www.nytimes.com/1998/06/23/business/chief-executive-at-polygram-resigns.html |access-date=5 November 2019 |work=The New York Times |date=23 June 1998}}</ref> and the deal was closed on December 10, 1998, with PolyGram's operations folding into [[Universal Pictures]] and [[Universal Music Group]].<ref>{{cite web |url=https://www.deseret.com/1998/12/11/19417434/seagram-absorbs-polygram-creates-world-s-largest-music-company |title=Seagram absorbs Polygram, creates world's largest music company |date=11 December 1998}}</ref>

Seagram however, was only interested in PolyGram's music division, and in October 1998 they announced that they would begin divesting PolyGram's entertainment assets, while the remainder would be folded into Universal Pictures.<ref>{{cite news|url=https://www.latimes.com/archives/la-xpm-1998-oct-09-fi-30635-story.html |work=Los Angeles Times |first=Claudia |last=Eller |title=Seagram May Settle for Sale of Film Library |date=October 9, 1998}}</ref> Prior to this announcement, the company announced the sale of their 75% stake in children's distributor [[Abbey Home Entertainment]] back to its original founders and the acquisition of Astrion plc.<ref>{{cite web |url=https://books.google.com/books?id=9wkEAAAAMBAJ&pg=PA68 |title=P'Gram Video Making Moves In U.K. Market |date=18 July 1998 }}</ref> On October 23, [[Metro-Goldwyn-Mayer]] (MGM) agreed to purchase [[PolyGram Filmed Entertainment]]'s pre-April 1996 library for $250 million, which included over 1,300 films from various assets PolyGram had acquired within that point, but did not include the [[ITC Entertainment]] library, which was sold on January 19, 1999 to [[Carlton Communications]] for £91 million.<ref>{{cite web|url=https://www.latimes.com/archives/la-xpm-1998-oct-23-fi-35357-story.html|title=MGM Agrees to Acquire PolyGram Movie Library|date=23 October 1998|via=LA Times}}</ref><ref>{{cite web|url=http://news.bbc.co.uk/2/hi/entertainment/258411.stm |title=Thunderbirds are going, going, gone |agency=BBC News |date=1999-01-19 |access-date=2013-06-22}}</ref> On April 8, 1999, [[USA Networks]] announced they would purchase PolyGram Filmed Entertainment's domestic division (including PolyGram Video's US and Canada operation), among other assets.<ref>{{cite web|url=https://www.latimes.com/archives/la-xpm-1999-apr-08-fi-25336-story.html|title=USA Will Buy Some Seagram Film Assets|date=8 April 1999|via=LA Times}}</ref> After the sale, the divisions were renamed USA Films and USA Home Entertainment respectively. The assets of [[Slash Records]] and [[London Records]] were sold to [[Warner Music Group]]. What remained of PolyGram was folded into both Universal Music Group and Universal Pictures.<ref>"Universal Music shake-up." ''The Times'', Friday, January 15, 1999</ref>

On February 10, 1999, Universal announced that they would pull out of their [[CIC Video]] and [[United International Pictures]] ventures with [[Paramount Pictures]] and rename PolyGram Filmed Entertainment's international division (including PolyGram Video's international operation) as [[Universal Pictures Home Entertainment|Universal Pictures International]].<ref>{{Cite web|last1=Carver|first1=Benedict|last2=Dawtrey|first2=Adam|date=1999-02-10|title=U to start int'l distrib|url=https://variety.com/1999/film/news/u-to-start-int-l-distrib-1117491165/|access-date=2022-01-09|website=Variety|language=en-US}}</ref> Whilst the home video division rebranding was successful (with CIC being renamed [[Paramount Home Entertainment|Paramount Home Entertainment UK]] toward the end of 1999<ref>{{Cite news|url=https://www.highbeam.com/doc/1G1-55478353.html|title=Paramount to retain CIC Video operations.|date=1 March 1999|access-date=6 April 2018|archive-url=https://web.archive.org/web/20180407053538/https://www.highbeam.com/doc/1G1-55478353.html|archive-date=7 April 2018|url-status=dead|publisher=[[Screen Digest]]}} {{link note|note=Partial rendition of story contained in HighBeam Research archive}}</ref><ref>{{cite magazine|last1=Groves|first1=Don|date=24 January 2000|title=CIC Video builds new identity after split|url=https://go.gale.com/ps/i.do?p=GPS&u=wikipedia&id=GALE|magazine=[[Variety (magazine)|Variety]]|volume=377|issue=10|page=24|access-date=6 April 2018|url-access=subscription |via=General OneFile}}</ref>), the theatrical division rebranding would prove to be a failure, as films from the rebranded Universal Pictures International flopped at the box office, the company therefore announced in October 1999 that their operations would be downgraded to the home video market only and renewed their UIP deal with Paramount for five years, the remains of PolyGram's theatrical assets would then be folded into United International Pictures. ''[[Mickey Blue Eyes]]'' would become the last film distributed under the ex-PolyGram unit.<ref>{{Cite web|last=Petrikin|first=Chris|date=1999-10-15|title=U, Par extend UIP pact|url=https://variety.com/1999/film/news/u-par-extend-uip-pact-1117756685/|access-date=2022-01-09|website=Variety|language=en-US}}</ref>

The PolyGram name now survives via reissue of music under the Polydor Records label as well as a publishing arm of [[Universal Music Publishing Group]]. The Japanese branches of the PolyGram labels that were absorbed to form [[Universal Music Japan]] and were rebranded: Polydor remained until 2002, when it merged with the Universal label to form Universal J, Kitty Records and Mercury remained until 2000, when they merged and became the short-lived Kitty MME, which later in 2002, moved some artists to Universal J, and in 2004, Kitty MME became Universal Sigma.