Vivendi Universal chairman Jean-Rene Fourtou told investors at the company's
annual meeting in Paris Tuesday that there is little sense in retaining its
U.S.-based entertainment assets.
Those assets -- collectively Vivendi Universal Entertainment -- include cable
channels like USA Network and Sci Fi Channel, Universal Studios, Universal Music
Group and theme parks.
"Since early March, we have become convinced that there is really no point in
thinking that we can develop VUE and grow the business knowing that it's in Los
Angeles and we are here," Fourtou told shareholders.
"It has a number of interesting and good TV channels," he added. "The TV
activities would need to be considerably developed to make any sense. Do you
think that we can become a lead player in U.S. television? No. That would be
At least one bidder has already emerged for all of VUE: Texas oil billionaire
Marvin Davis offered $20 billion (including assuming $5 billion in debt) for the
assets in November.
Since then, other interested parties have emerged, including Viacom Inc.,
General Electric Co.'s NBC television unit and Liberty Media Corp., possibly
together with former VUE co-CEO Barry Diller. However, those potential bidders
are thought to be interested only in the cable channels, and not in buying VUE
as a whole.
That appears to be a scenario Fourtou and Vivendi are open to. While not
identifying any potential bidders, Fourtou said Vivendi is in discussions with
several interested parties to dispose of VUE in whole or in part, either for
cash or cash plus an interest in a larger entity.
But one component of VUE that likely will not change hands this year is the
music group, Fourtou added.
"Selling music today would be tantamount to relinquishing a fabulous position
for not enough money," he said. "But keeping it can be viewed as a risk. We have
the feeling that UMG can probably stand to be kept for quite some time."
Fourtou also addressed the ongoing controversy with Vivendi's former
chairman, Jean-Marie Messier, and his $20 million severance package.
"We have decided to pay him nothing," Fourtou said.
Messier's employment agreement is a bit complicated because it involves both
American and French contracts. Fourtou said Messier was not paid according to
his French contract because he resigned. Regarding his American contract,
Vivendi also said it would not pay the former chairman.
"I clearly refuse to pay him anything on his American contract," Fourtou
said. "He sued, and we are in the process of referring the matter to an
However, Fourtou contended that Messier owes Vivendi about $93,000 for back
rent. Messier, who lived in a $17.5 million Manhattan duplex owned by the
company while he was chairman, reached a deal to stay in the tony digs until
Dec. 31, 2002, provided that he paid $31,000 per month in rent. But Messier
stayed in the apartment until the end of March and paid no rent.
"We will do everything we can to recover the money due to us," Fourtou