USA Execs Balk Over Bonuses1/13/2002 7:00 PM Eastern
Several USA Networks Inc. senior staffers are seeing red after not getting any green in the $10.3 billion USA Networks-Vivendi Universal S.A. deal.
In light of that deal, a number of senior executives are angry at USA's decision not to offer year-end bonuses or cash-out stock options, sources said. A mass walkout or strike, rumors of which surfaced last week, does not appear to be on the executives' agenda — at least in the short term.
"I don't know if it's gotten to a level of a walkout, but people are very upset at how they are being treated," said one source close to USA, confirming a New York Daily News
report. "I wouldn't be surprised if there are a lot of people that end up ultimately leaving."
As part of the deal, Vivendi will pay USA $1.62 billion in cash and take its 41 percent stake in the company, worth another $7 billion. In addition, Vivendi will pay Liberty Media Corp. $1.65 billion in its own stock for Liberty's stake in USA.
USA Networks Inc. chairman Barry Diller will receive 1.5 percent of the newly created Vivendi Universal Entertainment, which will include its Universal Studios as well as USA Network, Sci Fi Channel and USA Studios assets. Diller will lead this unit.
USA Networks Inc. will be renamed USA Interactive Inc. and house such assets as Home Shopping Network and TicketMaster/CitySearch, with Diller remaining as chairman.
But sources said the financial benefits of the deal have not trickled down to USA senior managers, not to mention staffers.
As a result, sources close to the network said as many as four midlevel advertising account managers left the company two weeks ago because of the network's bonus denials. But another source close to the situation said USA Network contacted employees, saying that a decision on bonuses had not been made.
Company representatives would not comment on the matter.
The complaints come after a tumultuous 2001 for flagship USA Network, whose 2001 primetime household ratings dropped 19 percent from 2000 levels. President Stephen Chao also resigned last October, after failing to develop any brand-defining original series.
Michael Jackson, the former CEO of the United Kingdom's Channel Four Television, then took the reins as president and CEO of USA Entertainment.