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Leaner Vivendi eyes bigger bite of NBC U

Viv mulls 2nd H'w'd play

Three years after its big retreat from Hollywood, Gallic conglom Vivendi Universal is mulling an increase to its stake in NBC Universal from 18% to 20%.

Move was disclosed by prexy Jean-Bernard Levy on Monday as Viv U posted a slightly better than expected 7% rise in fourth-quarter revenues, to E5.5 billion ($6.6 billion). Annual revs rose 9% to $23.5 billion.

After a major restructuring to slash debt of $30 billion, Vivendi Universal last year pronounced itself back in form and seeking acquisitions.

Adding to its NBC U stake would be about rationalizing shareholdings — not about making another play for greater influence in Hollywood.

Viv U carries its 18% stake in NBC U via Universal Studios Holdings, in which it owns 92.3%. Viv U hopes to take over the remaining 7.7% stake in Universal Studios Holdings from Matsushita. That would give the Gallic conglom the extra 2% in NBC U.

The holding also owns the Universal Music Group outright.

Fourth-quarter revenues at UMG stood at just over $2 billion, down 5.2% on a strong fourth quarter in 2004. Full-year revs were up 1.6% to $5.9 billion.

Reporting that sales in the U.S. unit fell 7.2% while digital sales nearly trebled to $426.5 million, Viv U said UMG outperformed the market, increasing its market share 2% to 31.7%, thanks in part to top 10 albums from Mariah Carey and 50 Cent.

Despite widespread music biz gloom, Levy was upbeat about UMG’s future, saying that piracy’s effect on the company’s profit margins would be “short term.”

“New growth will come via the distribution of music on computers and mobile phones,” the topper told daily French newspaper La Tribune. He cited the Gallic example of SFR Musique, Viv U’s six-month-old mobile music division, which it hopes will be the market leader in 2006, ahead of rivals iTunes and VirginMega.

Mobile phone unit SFR, the conglom’s biggest cash generator, posted fourth quarter revenues of $2.7 billion, up 5.7%, while full-year revs rose 7% on a comparable basis to $10.5 billion. Telco took on 1.4 million new customers in 2005, bringing total numbers to 17.2 million.

In conglom’s other media businesses, Vivendi Universal Games saw a 11.1% decline in revenues in the fourth quarter to $296 million, following an exceptional hike in the same period last year due to the North American launch of “World of Warcraft.” Full year revenues of $774.6 million repped a leap of 34.9%.

Canal Plus Group notched up a 6.3% increase in revs to just over $1 billion, which included an 8% increase in revenues at StudioCanal (compared with a full-year decrease of 3% to $459.2 million) and a 30% hike in fourth quarter earnings for its Polish pay TV operation.

Full-year revenues stood at $4.171 billion, up 4%. Flagship French channel recruited 105,000 subs, twice as many as in 2004 — a phenom attributed to the group’s costly acquisition of exclusive French first-division soccer rights.

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