Co.'s 3rd-qtr net loss widened to $2.1 bil
Vivendi Universal may unload its U.S. entertainment assets if the price is right.That was the message chief financial officer Jacques Espinasse gave analysts and investors Tuesday during a conference call to discuss the conglom’s latest financials. Universal Studios and Universal Music posted glum numbers. But the conglom finalized S1 billion ($1 billion) in credit and said asset sales could slash nearly $7 billion in debt by year’s end. “Vivendi’s cash crisis is now over,” Espinasse declared. Asked if the group would own U.S. entertainment assets a year from now, Espinasse said: “I don’t know. I’m not a board member, so it is not up to me. It depends very much on what kind of offer we have. “We don’t need to keep 100% of the theme parks, we don’t need to keep 100% of the games (unit),” he added later. “We are exploring different avenues in parallel, and we will make up our minds.” His comments fueled uncertainty over the conglom’s plans for its Stateside media businesses, coming in the wake of Marvin Davis’ surprise $20 billion bid for Vivendi Universal Entertainment last week. Espinasse said Viv U has a duty to its shareholders to consider all bids and present them to its board. Viv U chairman Jean-Rene Fourtou is keeping all his options open — and everyone guessing, said one Paris-based analyst. Separately on Tuesday, U.K. wireless group Vodafone denied it’s contemplating a takeover of Vivendi Universal in order to get its hands on French telecom company Cegetel. Viv U and Vodafone are Cegetel shareholders. Loss widens Viv U’s third-quarter net loss widened to $2.1 billion from $953 million, partly from losses it recorded on sales of Houghton Mifflin and Telepiu. Pro forma revenue fell 2% to $14.4 billion. Revenue fell 4%, excluding Vivendi Environment. Operating income rose 14% to $842.5 million. Vivendi Universal Entertainment, which includes Universal Studios and USA Networks, saw pro forma revenue drop 24% and operating income fall 30%, due to fewer theatrical releases by U Pictures, lower theme-park attendance and programming costs at the USA cable nets. The conglom noted tough comparisons with last year, when U rolled out “Jurassic Park III,” “American Pie 2,” “The Fast and the Furious,” “Traffic,” “Bridget Jones’s Diary” and “The Mummy Returns.” Features of 2002 include “The Bourne Identity,” “Blue Crush” and “About a Boy.” Gallic TV subsid Canal Plus’ revenue rose 5% to $1.2 billion. Music revenue fell 9% to $1.3 billion, and operating income plunged 89% on higher provisions for returns and higher A&R costs amid a global slump in the tune biz. U remains the world’s biggest music company, with a market share of over 31%. Games division’s revenue rose 22%. Kenneth Cron, the head of that unit, was recently named chief operating officer of Universal Entertainment — an informal grouping of all U.S. entertainment assets. Loan extended Along with obtaining the $1 billion credit line — reduced from a planned $3 billion — Viv U extended a $1.6 billion VUE loan. Espinasse said the moves give the conglom needed financial flexibility to thwart Vodafone’s bid for Cegetel. He noted that the board has not decided formally whether it would match Vodafone’s offer. It must do so by Dec. 10. Fourtou’s desire to hold on to Cegetel has been attacked as conflicting with his commitment to pay down debt. But Tuesday’s numbers, which showed operating income at Cegetel up 64% to $457 million, seemed to vindicate Fourtou’s thinking. Viv U said it appointed David Scolan as exec VP of investor relations. Scolan replaces Laura Martin, a former CS First Boston media analyst hired by Viv U’s ousted CEO, Jean-Marie Messier.
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