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Tag: Jean-Rene Fourtou

  • NBC, Vivendi Universal complete merger

    NBC, Vivendi Universal complete merger

    MUMBAI: NBC and Vivendi Universal Entertainment (VUE) have completed the creation of NBC Universal, a global media and entertainment enterprise with expected 2005 revenues of $15 billion.The announcement was made today by GE and Vivendi Universal, the parent companies, respectively, of NBC and VUE.

    The formation of NBC Universal creates a media giant whose assets include brands such as television networks NBC, Telemundo, USA Network, Sci-Fi Channel, Bravo, Trio, CNBC, and MSNBC (jointly owned with Microsoft); film studio Universal Pictures; television production studios Universal Television and NBC Studios; a stations group comprising 29 NBC and Telemundo television stations; and interests in five theme parks including Universal Studios Hollywood and Universal Orlando.

    International assets include the sale and distribution of video and DVD titles, television programming, and feature films in more than 200 countries; and distinctive television channels across Europe, Asia, and Latin America.

    In completing the transaction, shareowners of VUE received $3.65 billion of cash consideration, of which Vivendi Universal received $3.4 billion. NBC Universal assumed $1.7 billion of debt, previously included in Vivendi Universal’s financial statements. As a result, GE owns 80 per cent of NBC Universal and Vivendi Universal controls the remaining 20 per cent. Beginning in 2006, Vivendi Universal will have the right to monetize its ownership interest over time at fair market value.

    Bob Wright, GE vice chairman and chairman and CEO of the new company, was quoted in a company release as saying: “As a highly integrated company with outstanding positions across a range of media, the new NBC Universal represents a tremendous growth opportunity for our viewers, advertisers, employees, and GE shareowners.”Jeff Immelt, GE chairman and CEO, said: “Closing NBC Universal is another important step in the transformation of GE. Strategically, this business will have an advantage in content, so valuable in the future of digital media.”

    Jean-Rene Fourtou, chairman and CEO of Vivendi Universal, said: “We are pleased to have an active and long-term ownership interest in NBC Universal, one of the world’s most profitable and fastest-growing media companies. This transaction gives Vivendi Universal a 20 per cent ownership interest in NBC Universal and at the same time enables us to record a total net debt reduction of approximately $6 billion.”

    CORPORATE HIERARCHY
    Ron Meyer, president and chief operating officer of Universal Studios, will be responsible for Universal Pictures, the Hollywood studio operations, and the company’s theme parks. Randy Falco, president of the NBC Universal Television Networks Group, will lead the company’s commercial and operational organizations. Jeff Zucker, president of the NBC Universal Television Group, will oversee all television programming for the new company, with the exception of Sports and Olympics. Dick Ebersol, chairman of NBC Universal Sports & Olympics, will assume responsibility for USA Network’s sports programming, and Jay Ireland, president of NBC Universal Television Stations, will continue to lead the operations of the company’s owned-and-operated stations group.

    One fallout of the media merger of course is the expected loss of 300 jobs. The job cuts are seen as inevitable as there is bound to be some operational overlap in areas like cable TV. 

  • Vivendi Universal first quarter revenues decline

    Vivendi Universal first quarter revenues decline

    MUMBAI: Media giant Vivendi Universal has reported results for the first quarter.

    Cconsolidated revenues for the first quarter of 2004 amounted to 5,973 million euros a drop from the 6,232 million euros figure that had been recorded for the first quarter of last year.

    Vivendi Universals media activity (Groupe Canal+, Universal Music Group,Vivendi Universal Games (VUG) and Vivendi Universal Entertainment (VUE)) revenues for the first quarter of 2004 amounted to 3,471 million euros. This was a decline of nine per cent. To some extent this was offset by telecom activity for the first quarter which amounted to  2,434 million marking an increase of 14 per cent.

    Revenues at Canal Plus, the French cable TV operator, fell by 21 per cent to 923 million euros compared to 1,166 million euros in 2003. The company’s CEO Jean-René Fourtou has been selling divisions of the company including the entertainment division to NBC in a bid to get the company out of the slump. On a more positive note VUE’s revenues amounted to 1,493 million euros an increase of three per cent over the corresponding quarter of last year.

    Universal Television Group revenues increased by 15 per cent. Universal Television’s production and distribution revenues increased by 17 per cent due to increased licensing revenues for Law & Order: Special Victims Unit and increased production volume of other shows. In India the show airs on Star World.

    However there was bad news on the music and gaming front. UMG’s revenues of  978 million euros were 11 per cent below last year. The company attributed this to the adverse currency movements. Also the debut from 50 Cent was not repeated and the global music market continues to be in a state of rcession particularly in France.

    There was growth in the UK, Germany and Latin America due to strong sales of domestic and regional releases. UMGs album market share in the US fell to 26.6 per cent versus 28.3 per cent in 2003

    Vivendi Universal Games (VUG) fared even worse. VUG revenues in the first quarter amounted to 77 million euros. This marked a 27 per cent decline.

  • Piracy main deterrant to Vivendi Universal’s coming to India: Fourtou

    Piracy main deterrant to Vivendi Universal’s coming to India: Fourtou

    NEW DELHI: Sell, sell and sell more to get out of debt. Dispose off those businesses that are either not profitable or where the shareholding is in the minority. This seems to be the mantra of Jean-Rene Fourtou, chairman and CEO of the Euro 12.4 billion Vivendi Universal, one of the top media companies in the world.

    “Hopefully, by the end of 2005 there would be almost nil debt left,” Fourtou told indiantelevision.com during a short interview in Delhi. At the time he took over as the chief of Vivendi Universal in July 2002, the company had run up a net debt totaling Euro 35 billion.

    Pointing out that Universal Vivendi would not like to come to India in a big way — its presence here through Universal Music is almost negligible — Fourtou made it clear that the decision is linked to the “problem of counterfeiting and piracy.”

    “It’s not in the interest of India, it’s a real problem. We all have to cooperate (the system in India and global companies like Vivendi) to neutralize the effect of counterfeiting,” Fourtou said. Vivendi operates in 71 countries.

    To hammer in his point, he said that the official market of music, globally, is just one-third of the total music consumed worldwide.

    According to the man, whom Forbes magazine voted as the ‘Businessman of the Year’ in 2002, Vivendi would ideally like to expand business to India as almost 25 per cent of their music sales come from outside Europe. “It’s a market we should be in, but for this huge problem of piracy,” Fourtou added.

    Fourtou was in India in his capacity as the chairman of the International Chamber of Commerce to take part in the proceedings of the Indian chapter of the ICC, which is headed by the Onkar Kanwar, promoter of Apollo Tyres.

    However, Fourtou didn’t want to sound too harsh on India, where the media and entertainment sector is registering a healthy growth and where Vivendi Universal’s competitor Rupert Murdoch’s News Corp has already established a strong presence through Star.

    “It’s not only India, but there are several other countries like Russia where this (piracy) problem is big,” he said, indicating that organized mafia has got into this business as it’s more profitable than peddling drugs and not as dangerous too.

    Asked about the worldwide cost-cutting exercise that he has initiated to bring the company back on track, Fourtou downplayed this aspect by saying, “Cost-cutting is not important. What is important is the cash flow and the
    company should have positive cash flow by 2005,” he explained.

    At the moment, the debts of the company are down to around Euro 12 billion and Fourtou is hopeful that sale of some assets would be able to take care of the rest of the accumulated debts.

    Pointing out that Vivendi Universal has got out of many businesses to focus on some like telephony and entertainment, Fourtou said, “I have 25 more assets to sell this year.”

    Groupe SFR-Cegetel is the No. 1 private telecommunications operator in France with more than 17 million customers as on June 30, 2003. Groupe SFR-Cegetel is the only private operator in France covering all telecommunications activities. Maroc Telecom, a 35 per cent Vivendi Universal subsidiary, is another telephony venture of Vivendi, and is the leader in Morocco.

    Still, Fourtou evaded direct questions on the financial mess created under the reign of the company’s former chairman Jean-Marie Messier.

    Vivendi Universal had to reach a final settlement with the United States Securities and Exchange Commission on a complaint filed by the SEC charging violation of certain US securities laws. In the Consent Decree, Vivendi Universal agreed, without admitting or denying any liability, not to violate certain specified provisions of the US securities laws in the future. Vivendi Universal also agreed to deposit a civil penalty of $50 million into a Sarbanes-Oxley “Fair Fund” to be distributed by the court to certain Vivendi Universal shareholders pursuant to a plan of distribution to be established by the SEC.

    “The board asked Messier to resign,” Fourtou passingly said, while keeping mum that his cost-cutting has resulted in the head of the German operation of Universal Music quitting recently in protest.

    But Fourtou is very upbeat on the alliance struck with General Electric for the merger of NBC and Vivendi Universal Entertainment (VUE) in October last. The new company, to be called NBC Universal, will be 80 per cent owned by GE, while 20 per cent shareholding would be with Vivendi Universal Entertainment.

    “This sort of a merger creates a company that would have many advantages. Even in the movie business that is very cyclical,” Fourtou said.

  • NBC expected to clinch deal for VUE assets

    NBC expected to clinch deal for VUE assets

    MUMBAI: After months of negotiations with different parties Vivendi is said to be close to taking a decision as to who will get the assets of Vivendi Universal Entertainment (VUE). Its board is expected to approve entering exclusive negotiations with NBC’s parent General Electric for the proposed merger between NBC and VUE.

    If the deal does go through, Vivendi would have around a 20 per cent stake in the new entity NBC Universal. As reported earlier by Indiantelevision.com through the deal NBC is looking to compete with the likes of AOL Time Warner. Reports indicate that Vivendi CEO Jean-Rene Fourtou is infatuated with GE’s esteemed management team; and believes that the company, under GE leadership, will build value over time.

    The talk of Vivendi looking at an initial public offering is said more of a tactic to give it further leverage during negotiations with GE rather than a path that the media company would seriously consider pursuing. The other remaining bidder Edgar Bronfman used to own Universal Studios before selling out to Vivendi three years ago.

    Bronfman has urged Vivendi Universal to accept his $13 billion offer. for the group’s entertainment assets. He said that making a deal with NBC would mean that Vivendi would be unable to regain market credibility. He pointed out that a merger with NBC would mean that Vivendi would have less control and influence over its business. He also said that NBC’s inexperience at running a studio, an entertainment cable network or a theme park could hurt the new entity if the deal went through.