You will be redirected back to your article in seconds

Weak wind for sale

Viv U narrows its losses, but music takes beating

NEW YORK — Vivendi Universal said Wednesday its net losses narrowed last quarter — but without much help from the U.S. entertainment assets it’s about to sell.

Universal Music, theme parks, television and even Viv U’s usually robust games division saw revenue slip and profits erode, due in part to exchange-rate fluctuations. TV programming costs jumped, and U Pictures released fewer films in the first quarter. (Since then, the studio’s had a string of box office hits.)

Vivendi lost e319 million ($376 million) compared with $20 billion for the previous year on a giant accounting charge. Excluding the charge, the conglom lost $960 million the year before. Operating income jumped 39% to $994 million.

The French conglom credited advances at Cegetel, Maroc Telecom and Canal Plus, and it said the upbeat numbers came “despite temporary declines” in Vivendi Universal Entertainment, games and music.

While the figures are dated — they run through March and it’s already June — they’re certainly not an ideal advertisement for the showbiz assets as bidders put the finishing touches on offers, due Monday.

Media off

“Our takeaway is that telecom was good, media wasn’t,” Sanford Bernstein analyst Michael Nathanson said.

Music in particular took a nasty hit: Revenue fell 19% — or 9% on a constant currency basis — to $1.3 billion. The unit swung to a loss of $33 million from a profit of $32 million the year before.

At Vivendi Universal Entertainment, pro forma revenue fell 22% to $1.6 billion, and operating income dropped 23% to $251 million. Adjusting for exchange rates, the VUE numbers were down 5% and 6%, respectively.

Viv U said Universal Pictures and parks each had revenue fall 9%, while TV revenue was up 5% on constant currency basis. It didn’t break out profit/loss. But the conglom attributed VUE’s overall dip to higher original programming costs in TV and fewer film releases at the studio.

‘Hulk’ on tap

The latter should reverse itself after a string of high-grossing pics in the current quarter. “The Hulk” opens Friday.

Pay TV group Canal Plus appeared to reach operating breakeven last quarter and expects to post an operating profit this year.

As the auction for VUE draws to a close, Viv U chief financial officer Jacques Espinasse told analysts at a meeting in Paris Wednesday the conglom is in contact with six potential bidders.

“Bids will be collected on June 23. We are not wasting any time and proceeding speedily,” he said, adding, “Some investors are interested in the whole thing, including music, and some are only interested in VUE or part of VUE. Some are interested only in games.”

Espinasse insisted once again that “VU is not handicapped in its ability to sell its VUE assets, and potential buyers will be able to operate them without interference.”

And he reiterated that Vivendi is considering an initial public offering for VUE in a “dual-track process” in case it doesn’t like the offers. Most Wall Streeters and industry players consider an IPO highly unlikely.

Vivendi said its debt at the end of May was about $16.5 billion.

After a recent runup ahead of the proposed sale, Viv U shares fell 3.3% Wednesday to close at $19.95.

(Alison James in Paris contributed to this story.)

More Scene

  • First Look at SAG Awards' Cuban

    First Look at SAG Awards' Cuban-Inspired After-Party (EXCLUSIVE)

    Celebrities at this year’s SAG Awards won’t have to go far for some tropical fun. Sunday’s annual post-show gala, hosted by People magazine for the 23rd year, is set to feature a Cuban-themed party space adjacent to the Shrine Auditorium. “We’re kind of going back to more of a thematic element. I have some close [...]

  • DF-10956_R – Gwilym Lee (Brian May) and

    'Bohemian Rhapsody' Producer Confirms Bryan Singer's Reason for Leaving, Says 'No One' Was Attached to Play Mercury

    “Bohemian Rhapsody” producer Graham King provided insight into some of the events surrounding the Golden Globe-winning film Saturday at the Producers Guild Awards Nominees Breakfast, including director Bryan Singer’s departure from the film partway through production. “It’s an unfortunate situation, with like 16, 17 days to go and Bryan Singer just had some issues, his [...]

  • Mj Rodriguez, Nico Santos to Announce

    Mj Rodriguez, Nico Santos to Announce GLAAD Media Award Nominations

    Mj Rodriguez and Nico Santos are set to announce the nominees for the 30th annual GLAAD Media Awards. The “Pose” star and “Crazy Rich Asians” funny man will make the announcement during a live-stream hosted by AT&T and from the AT&T Hello Lounge at the Sundance Film Festival on Friday, Jan. 25. “The images and stories recognized [...]

  • Emile Hirsch, Matt SmileyEmile Hirsch hosts

    Emile Hirsch Hosts Smiley Face Art Opening at Mondrian Hotel

    Despite the rain on Wednesday night in West Hollywood, there were plenty of smiles inside the Mondrian hotel thanks to artist Matt Smiley‘s Refresh exhibition. Not only is Smiley his real last name, but several of his paintings and other pieces in the exhibit feature smiley faces. “I’ve seen more smiley symbolism lately, and I’ve [...]

  • Randall Park, left, and Constance Wu

    Constance Wu Wants Her 'Fresh Off the Boat' Co-Star Randall Park to Host the Oscars

    While the Academy may have decided to go hostless for this year’s Oscars, that doesn’t mean the rest of Hollywood has stopped thinking about who would be a good choice for the emceeing gig. Former host Whoopi Goldberg recently suggested Ken Jeong. Jeong said, when he was a guest on “The View,” Goldberg told him [...]

  • 'Schitt's Creek' Stars Reveal Dream Guest

    'Schitt's Creek' Cast Reveals Dream Guest Stars: Oprah, Beyonce and ...

    “Schitt’s Creek” has big dreams. Dan Levy, who stars as David on the series, says his wish list of guest stars includes Oprah, Beyonce, Mariah Carey and Gwyneth Paltrow. “All for different reasons, none of whom we’ll get,” he cracked at the Critics’ Choice Awards. For those who haven’t caught on to the “Schitt’s Creek” [...]

  • Barbra Streisand and Gisele Bundchen

    Barbra Streisand and Gisele Bündchen to Be Honored at UCLA Science Gala

    Science can be very glamorous. It certainly will be during Oscar week on Feb. 21 when the UCLA Institute of the Environment & Sustainability (IoES) honors Barbra Streisand and Gisele Bündchen for environmental activism at its annual Hollywood for Science Gala. “When I moved to LA, the air was unbreathable. Rivers were catching fire in [...]

More From Our Brands

Access exclusive content