Viv Uni holding on to Canal Plus
February 7, 2003 - The Hollywood Reporter
Canal Plus is staying firmly within the Vivendi Universal family, leaving the debt-laden conglomerate to address the pay TV unit’s various challenges and to focus on asset sales elsewhere.
In open letters Thursday, Vivendi Uni executives ended recent speculation by saying Groupe Canal Plus was neither for sale nor gearing up for a previously envisioned initial public offering.
Vivendi Uni CEO Jean-Rene Fourtou also confirmed the departure of Canal Plus president Xavier Couture and welcomed Bertrand Meheut as his successor (HR 2/3).
The Canal Plus IPO, conceived in July and long expected to raise about 2 billion€ ($2.2 billion) this year, “is no longer on the agenda,” Fourtou said. Sources close to the situation said Vivendi Uni could revisit the idea down the road.
Fourtou also stressed the importance of restructuring Canal Plus, which remains unprofitable and has recently seen a dip in its 4 million-plus subscriber base. The restructuring will include cost cuts and the sale of Canal Plus’ money-losing non-French assets.
“We must simplify our structures, clarify responsibilities and reduce costs,” Meheut said in a separate letter without providing specifics. Observers estimate that Canal Plus might lay off 200-900 employees.
In another move, Meuhet confirmed Dominique Farrugia, head of programming for the Canal Plus pay TV channel, as his chief TV and movie “counselor.” Guillaume de Verges, the recently departed programming director at French network TF1, becomes the channel’s assistant general manager.
The trio takes over as the channel is in danger of losing its prized French soccer rights. Fourtou said Thursday that Canal Plus has always been a “preferred partner” of French soccer and “will maintain that position.” He didn’t provide specifics.
With Canal Plus’ French operations remaining part of Vivendi Uni, observers said the conglomerate must intensify its focus on mapping out the future of its U.S. entertainment assets. Vivendi Uni shares have fallen sharply most of the week on investor worries that strategic decisions will come later rather than sooner.
In that vein, sources said Thursday that a decision on the company’s U.S. assets is not likely before - and not even at - Vivendi Uni’s regularly scheduled Paris board meeting next month.
However, Vivendi Uni is working on other ways to raise cash. Besides looking for buyers of the non-French Canal Plus assets, the firm is looking to raise about 1 billion euros ($1.09 billion) through a bond offer to help refinance a $1.62 billion loan.
Also, Vivendi Uni is still looking to sell its video game unit, sources said.
Joe Ray reported from Paris; Georg Szalai reported from New York.
