Barry Diller came out strongly in defense of Vivendi Universal chief Jean-Marie Messier Friday as well as the anemic performance of his French partner’s stock.
“It’s a tempest in a French teapot,” said the entertainment titan during a breakfast conference held by the New Yorker on Friday. He noted that all three candidates in the French presidential elections used the conglom as a whipping post to stir up patriotic sentiment, while at the same time financial markets turned volatile and new accounting rules led to giant, one-time financial charges at many big companies.
As for Messier, “It takes the same guts to take a water company and transform it into a media-comm business,” Diller told moderator, author and New Yorker communications columnist Ken Auletta.
He slammed option-obsessed company employees who, in his mind, contribute to a general sense of doom. “Shut up about the stock already,” he said. “They literally talk about it all day long. They’re depressed about it. Stocks won’t rise for another two years.”
Diller recently merged his USA Networks’ entertainment assets into Universal Studios and joked that running U was his “night job.”
“I think the movie business is a fantastic business … Compared with the television business, it’s a cakewalk.” The trouble is that films “cost too much to make and market.” He said Universal’s hot streak over the past three years could be hard to sustain given the cost. “In the end, it’s like a casino. The house will get you,” he said, unless you’ve got “a vibrant, lower-cost alternative,” he said.
Diller said Vivendi and AOL Time Warner were overly, and too publicly, optimistic on synergies and growth. It’s a matter of expectations. “Instead of saying, ‘We have to integrate these parts, understand how they relate, and we’re not going to make predictions about our earnings,’ they said they’d grow by 30% a year. People said, ”That’s unbelievable!’ And it was.”
The former Fox and ABC exec also called Disney a “totalitarian regime” and lashed out at Miramax topper Harvey Weinstein for “threats and intimidation.”
Something about Michael Ovitz’s fall from grace, however, has earned Diller’s empathy. “I was never his good friend,” he said, but “I’m amazed at the number of people more than gleeful. It’s a killing ground. To watch this process is really bad.”
Public policy issues also were on the table. Diller said that he supported the proposed EchoStar-DirecTV merger, stressing that satellite was a crucial counterweight to cable, in particular to the proposed combination of AT&T Broadband and Comcast. He warned against the conglomeration of content and distribution and said regulators should try to keep them separate.