Inside Move: Muddy waters

Transparency elusive in Vivendi U financials

Trumpeting financial clarity and openness as its new religion, Vivendi Universal nonetheless unveiled a maze of year-end figures last week. In the process, it also irked reporters by not making the earnings release available in time for a Paris press conference with chairman-CEO Jean-Marie Messier.

“What we are doing is unprecedented in terms of disclosure,” said Messier. He offered to explicate Vivendi’s numbers, a confusing array of French and U.S. GAAP (or generally accepted accounting principles), down “to the very last euro.”

Conglom posted steep losses of $11.8 billion (French GAAP) or $955 million (U.S. GAAP) after a giant writedown of core assets to the tune of $13.6 billion. Canal Plus took the biggest writeoff. All divisional results but Canal’s were reported in U.S. GAAP, a detail not immediately obvious in the release.

Pro forma numbers were adjusted for deals worth billions of dollars, a situation typical of merger-laden media groups.

Universal Studios filmed entertainment was excluded from revenue projections — an odd practice that Viv U execs attribute to the volatility of the film biz.

Total revenue rose 10% to $50 billion, but half of that came from a water utility that mystifies U.S. entertainment analysts.

Vivendi owns a big chunk of U.S. film, TV and publishing and is ostensibly trying to woo Wall Street, yet it only reports crucial financial information in euros. News Corp., in contrast, provides all its figures in both Australian and U.S. dollars.

No one accuses Vivendi of obfuscation a la Enron, but if the trans-Atlantic conglom seeks real transparency, it’s still got a ways to go.

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