Fourtou to Uni executives: Don't expect VUE fire sale

[AyuRocks]

Entertainment - Hollywood Reporter

Fourtou to Uni executives: Don't expect VUE fire sale
By Cynthia Littleton and Gregg Kilday

LOS ANGELES (The Hollywood Reporter) --- If Vivendi Universal chairman and CEO Jean-Rene Fourtou has his way, Universal's entertainment assets will not be sold off in piecemeal fashion, Fourtou told a gathering of nearly 300 senior Universal executives Thursday morning at a meeting on the lot.

Fourtou made the trek to the Universal City in an effort to reassure anxious studio executives that the studio's French parent company is not preparing a fire-sale plan for a quick sell-off of its film, TV, theme park and music assets. Fourtou stressed that the company is not under time pressure to make decisions on the divestiture because it has spent the past few months selling off other nonentertainment assets and restructuring its once-crushing debt load.

Speculation about VU's plans for those assets has been making headlines for months, but rumors about the company's fate went into overdrive last week with the Barry Diller's resignation as chairman of the Vivendi Universal Entertainment division (HR 3/20).


Fourtou and Ron Meyer, president and chief operating officer at Universal Studios, spent an hour fielding questions from a group of Universal staffers who gathered on a soundstage. Other employees in New York, Orlando and London were teleconferenced into the meeting.


The group included executives from Uni's film, TV, recreational and corporate divisions but not the Universal Music Group. One source said Fourtou's comments indicated that he did not view the UMG division as a natural fit with the rest of Uni's entertainment holdings, which include film and TV production and distribution units, the USA and Sci Fi cable channels and theme parks.


Sources said Fourtou only briefly touched on the issue of Diller's resignation, saying that Diller's role as VUE chairman was always intended to be a temporary job. Fourtou stressed that he maintained a good relationship with Diller, who sold his USA Entertainment assets to VU in a December 2001 merger orchestrated by Fourtou's predecessor, Jean-Marie Messier.

Fourtou acknowledged that the company has received a $20 billion bid for the VUE and UMG assets from an investor group led by Marvin Davis, but he indicated that the offer was too low for the aggregate value of those divisions.

As for the cost-cutting campaign that Universal has undertaken during the past year, Fourtou said the company was still looking to reduce Uni's overhead costs but was willing to loosen a bit the hiring freeze implemented last year.

Sources stressed that Fourtou and Meyer repeatedly praised the performance of the various Uni divisions and its managers, particularly in light of the anxiety caused by the studio's uncertain ownership situation.

"He was very clear in thanking and praising the group (of executives) for being so successful under difficult circumstances," one participant said.


Ashley

[Stargate2077]

Dang...I think Viacom is interested only in the Sci-Fi Channel. Why does Vivendi Universal have to be a pain in the emma? Why can't they just sell their assests in seperate pieces? Everyone will be happy in the long run.

[saska]

I've read in various places that Viacom really only wants the Scifi channel but would bid for both SciFi and USA in order to ensure they were not beat out by a bid for both from someone else. That is not necessarily fact, though - just business-news speculation.

Fourtou is doing what any good top level executive would do in a time of speculation and uncertainty - communicating with his employees en masse. The message is that desperation will not drive them to sell.

What is interesting to me here is his statement that Marvin Davis' group's bid for the entertainment assets was too low. That is a VERY different message than "we don't want to sell."

Believe me, this kind of business is best as a spectator sport. :) just don't get too vested in the outcome, since everything can change dramatically overnight.

Saska

[Tokeya]

I recall reading in a different article that Fourtou was more interested in a merger with Viacom than an out right sale.

:think: I'll go do some digging.... :flee:

[AyuRocks]

It wasn't that he didn't want to sell, it's that the company doesn't have to sell quickly and take a lower bid than they are looking for. Like saska said, not to take a bid out of desperation.

On the merger and more...


Entertainment - Reuters Industry

Fourtou gives Universal un peu de deja vu
Fri Mar 28, 3:58 AM ET Add Entertainment - Reuters Industry to My Yahoo!


By Carl DiOrio

HOLLYWOOD (Variety) - Vivendi Universal chairman Jean-Rene Fourtou has told a soundstage full of Universal executives he wouldn't conduct a "fire sale" of the studio.

Though the pep talk was well received, there was also an uncomfortable sense of deja vu among insiders at the studio, which has has had Japanese, Canadian and now French owners in the past decade.

Wednesday's rally marked Fourtou's first "town hall" address on the lot, but it followed previous buck-up-the-troops addresses from predecessors Jean-Marie Messier and Edgar Bronfman Jr.

"A lot of us in that group still remember Edgar telling us the company wouldn't be sold," one Universal insider commented after the 1-1/2 hour meeting on Soundstage 6. "So, it was almost like when you hear someone deny that something's going to happen, and you know that means it is."

Fourtou acknowledged talks to sell all or part of the company and having meetings with "all of the people we've been reading about in the press," a Universal executive said.

MORE FROM MARVIN

As for the prospect of a bid for Vivendi Universal Entertainment (VUE) -- the Vivendi holding company for the studio, theme parks and music arm -- by Barry Diller, who ran VUE until recently, "He (Fourtou) said Barry is more interested in running USAI right now," one attendee recalled.

Diller announced March 19 that he would give up his post at VUE to focus on duties as CEO at Gotham-based USA Interactive.

Billionaire Marvin Davis -- who wants to control VUE for $15 billion plus debt -- would have to pay more than that to prevail, Fourtou said.

"He was very clear that what Marvin Davis was offering was less than what he felt the company was worth right now," the insider said.

Just after that remark, the French executive's cell phone rang, with Fourtou pretending to answer the call still astride the podium.

"Hello, Marvin?" he feigned, as the soundstage filled with laughter.

JOB SECURITY WORRIES

Fourtou and VUE president Ron Meyer addressed some 275 employees ranked VP level and higher, and additional execs watched by remote TV from Universal offices in Gotham, Orlando, London and even Stockholm. A Q&A with the duo followed.

"They asked them a few tough questions about their job security and things like that," an insider said. But the atmosphere was cordial and Fourtou upbeat, the source added.

Fourtou said that he wanted to keep VUE intact and announced that a hiring freeze instituted under Diller would be lifted. The gathered execs were relieved to hear they would finally be allowed to refill at least some of the vacancies that have cropped up companywide over the past several months.

"He tried to reassure people," a Universal insider said. "He said there wouldn't be a 'fire sale' of the company."

INVITING A MERGER

The Paris-based topper hinted broadly that he was more interested in offers involving more of a merger than a takeover. Parties such as Liberty Media's John Malone, Viacom's Sumner Redstone or NBC parent General Electric potentially could combine their media assets with VUE in some kind of jointly owned entity, he suggested.

"It was a forum designed to answer employees' questions as candidly and openly as possible about the future of the company," Universal spokeswoman Sue Fleishman said of the Fourtou session. "It also gave him the opportunity to acknowledge how well they are working under challenging circumstances."

Several of the Universal execs in attendance said afterward that they appreciated Fourtou taking the trouble to discuss the current situation after months of speculation about the company's future.

"We've been through all this before, so everybody has a wait-and-see attitude," a film exec mused. "(But) it was nice, and Fourtou seems a little more sincere than what we've had in the past.

"I just hope they handle all this quickly," the insider added, "because uncertainty isn't a good thing."

Reuters/Variety


Ashley

[saska]

From Vivendi Universal's web site, front page:

"Following the many rumors about possible asset disposals, Vivendi Universal would like to again emphasize that no statement or comments will be made on disposals before their completion."

Which says: "we're not going to talk about it until it's done" -
very different from "we're not going to do it."

A press release that is targeted to investors further states they plan to do E7Billion in disposals this year to keep pace with their planned debt restructuring.

Saska

[Darth Buddha]

That's the usual corporate line.

A company usually isn't anticipating layoffs until the pink slips come out (otherwise, give people a reason and they'll start to leave on their own), and divisions aren't "ever going to be on the block" right up until the day of sale. Usually the next set of lies is that "current staff will be largely retained".... (yes, I've been on that ride a few times, and usually jumped before it was convenient to my corporate masters).

Corporations are not truthful entities, and they exist solely to eliminate personal responsibility when you get right down to it. Lying to your employees and public disinformation are just parts of what that buys you.

[saska]

Agreed, Darth Buddha. That's part of why I paraphrased from the investor notice (no need to get my butt kicked for disseminating specific information that requires you verify you're a US citizen/investor before you view it). I think the solicitation for investment that mentions planned selloffs is a more candid picture of what is really happening at VUE. They can't lie in their solicitations for investment the way they can lie in their press releases. Doing so would get them smacked down by the SEC faster than you can say "Barry Diller".