Memo to: Kirk Kerkorian
From: Peter Bart
Re: The Universal gambit
There’s something unseemly about your name appearing on a list of “contenders” for the Vivendi Universal assets, Kirk. You’ve never been a mere “contender,” whether you were going after the old Western Airlines or a Las Vegas Hotel or even Chrysler. While rival bankers and corporate functionaries dithered with their due diligence, you simply wrote the check and closed the deal.
So maybe it’s time to make your move on the French, Kirk. Take them out of their agony.
A CASE COULD BE MADE that a combined Universal/MGM would be a formidable force. It would have a vast library of some 7,500 films. Universal’s domestic TV channels would mesh well with MGM’s foreign channels.
MGM’s small but profitable TV production entity would be buttressed by Universal’s “Law and Order” franchise. The combined entities, while still no Viacom or News Corp., would have the basic components to become a major player in the brave new media universe.
And from your standpoint, Kirk, these moves would fit the definition of a classic Vegas ploy. You made a bet (for the third time) on MGM without a viable exit strategy. So now you spread a few billion more on the table and you’ve suddenly got a solid business plus a brilliant long-term exit strategy.
After all, Universal has survived the Japanese, the Canadians and the French, so it could certainly be ready for an encounter with history’s sharpest Armenian dealmaker.
And look at your competition, Kirk.
You’re willing to put cash on the table while NBC and GE feel they’re above specifying an offer.
LAST WEEK YOU PULLED in another $500 million by selling your 20% stake in Rainbow Media. John Malone keeps saying he wants a place at the table, but you know his type, Kirk: He’s such a sly poker player he won’t even admit he’s been dealt his cards.
Then there’s Marvin Davis, who’s been ill lately, and besides, no one can quite figure out what motivates him to stay in the game.
And there’s Edgar Bronfman Jr., whose family lost billions on their last Universal go-around, so their desire to return to the action seems equally perplexing.
Hovering mysteriously in the background is the ghostly presence of Barry Diller, whose dealmaking career is the mirror opposite of yours, Kirk.
The press keeps praising Diller as a supreme negotiator, but consider the deals that he couldn’t negotiate.
THERE WAS THE BATTLE for Paramount — Sumner Redstone aced him out. There was a CBS deal that didn’t cook, then one for NBC. And then there was Lycos, also a non-starter. At Vivendi, Diller did such a great job out-negotiating the French that they apparently want nothing to do with him.
The conclusion, Kirk, is that you’re a helluva lot better at pulling the trigger than Barry.
Of course, closing deals per se can also be an exercise in self-destruction — witness the career of Jean-Marie Messier. The former Viv U CEO was such a deal junkie he acquired assets that his successors still can’t find.
Business Week once gushed: “Not since Napoleon has France produced an empire builder as ambitious as Jean-Marie Messier.” Well, the business world apparently couldn’t accommodate a wannabe Napoleon.
Understandably, Kirk, the French keep saying “show me the money,” but you’ve been responsive to that request.
Scuttlebutt among the banking types suggests you’ve bid $11 billion for all of Vivendi Universal Entertainment — all cash — and you’re even willing to make a further offer for the music unit. Indeed, you raised an additional $500 million last week by selling stakes in three cable networks.
Back in 1969 when you first mounted your offensive on MGM, Kirk, most smart-ass insiders were convinced you didn’t have the money. It was secret Arab money, some guessed, or a loan from Onassis.
But you kept buying MGM stock until the company was firmly under your control. And the most surprised people in town were — here we go again — the Bronfman family, who thought they controlled the proud but tattered Lion.
WHEN ASKED WHY you’d made the deal, your attorney Greg Bautzer said it was no mystery to him. “My friend Kirk just bought himself a little immortality,” he said.
Well, MGM was a mess at the time and along with immortality came some daunting problems — lousy movies were the least of them. But Viv U is hardly the old MGM. It’s a solid company run by substantial and talented people who’ve taken some undeserved beatings of late.
It may be time to take out that checkbook again, Kirk. There’s a lot more immortality heading your way.