Inside Move

U tunes in talk of pic unload

By JILL GOLDSMITH

Barry Diller says he has no plans to buy Universal Studios. But he's not the only act in town.

Edgar Bronfman Jr., the CEO of U parent Seagram, has been on the horn lately looking to unload the studio so he can focus on his successful music business.

Others are placing bets on a sale or merger of the entire company with a major entertainment player, although it's not clear what would become of Seagram's massive beverage business in that case.

The market clearly likes such speculation, which has helped boost Seagram shares in recent weeks although the stock lost some ground again over the past few days.

Sources close to Seagram insist that the rumors are untrue on all counts.

Yet they're not fading. "The Time Warner/AOL deal catalyzed everybody to reassess what their strategy was -- particularly coming on top of the Viacom/CBS deal," says one Wall Streeter.

"At last, everyone is investigating how to become more vertically integrated. There were lots of things you wouldn't have thought were possible because of family control -- take Sumner, Rupert, Edgar. Well, maybe they're not saying that anymore," he added, referring to Viacom topper Sumner Redstone and News Corp. topper Rupert Murdoch.

How to handicap a potential partner: See who needs music.

Among entertainment giants, that would be Disney, News Corp. and Viacom/CBS.

"I think Seagram would fit great with all of them," the Wall Streeter says.

Maybe Edgar and Barry -- who heads Seagram-controlled USA Networks -- will decide they want NBC so they can vertically integrate on their own.

But Edgar wouldn't let Barry buy NBC, right? Well, maybe way back when.

But the guys are partners -- let's assume they work together. It's a little like Time Warner chairman Gerald Levin calling that company "strategically complete" not all that long ago -- and Ted Turner, perhaps, saying, "Not quite yet."