While the departure of CEO Scott Mednick from Peter Guber's Mandalay Branded Entertainment has raised questions about the future of the year-old startup, founding partner and new CEO Greg Sabatino said the former Sony Pictures honcho's commitment to the branded entertainment space is as strong as ever.
Execs close to the situation said that Mednick had grown disenchanted with his job due to what he perceived was Guber's lack of focus and commitment to the unit. Mednick had grown frustrated that Guber's focus was on his core businesses of film and TV and that even his minor-league baseball teams took precedence over MBE. Guber is the legendary force behind such successful films as "Rain Man" and "Flashdance."
Mednick, who has moved on to be a private consultant in the branded entertainment space, said "There is nothing acrimonious in my leaving. This new opportunity offered me the chance to employ every part of my brain and draw on all of my diverse experiences."
One exec close to the situation said that some of the managers that Mednick had recruited to MBE are also leaving as well. Another unnamed exec speculated that "Peter will probably remain in the space but in an ad-hoc manner to leverage advertiser support for just his properties."
"Actually Peter's time has doubled on the business," Sabatino rebutted. "This is a retooling and a refocusing, not a retrenchment." Sabatino said he and Guber are bringing on additional equity partners with expertise in both brand marketing and entertainment.
Guber has earned a reputation for pursuing aggressive compensation schemes with brand marketers. One Madison Avenue operative, who would only speak under the condition of anonymity, said MBE's modus operandi was to ask advertisers for a $1 million "consulting" retainer for a six-month period "to just learn a client's business" without any stipulations built in for delivery of branded entertainment programs.
"A million is what the talent agencies get as retainers but that's for a year and they at least build in something that they're going to produce," the exec went on to say. "It's like Guber's asking you for your watch so he can tell you what time it is." To which, Sabatino responded, "That's not a [representative] expression of the offering that Mandalay is making."
Guber, one of Hollywood's true swashbucklers, was recently embroiled in a public dust-up with Sean Connery over a motion picture project that went awry. Connery sued Guber over the deal gone wrong.
Arguably, Mandalay's most prominent deal in the advertainment space was with the scandal-ridden HealthSouth, for whom they produced a sports game show called "Go For It!" that ran on USA Network and ABC Family.