It is not just tax liabilities that make a split-up of Vivendi Universal Entertainment such a thorny issue. There’s also a question of real estate.
If Viv U chief Jean-Rene Fourtou decides he can get the best price by splitting up U’s movie, TV and theme park operations, the new owners could find themselves intimate neighbors on the 415-acre U lot.
For instance, the theme park’s “Earthquake” ride is in Soundstage 50, right behind the studio’s “Denver Street” location.
And selling the theme park would require paying licensing fees for films like “Jurassic Park” and “Jaws,” upon which park attractions are based, as well as an intricate leasing and access agreement between the them park owner and whoever owns the production lot.
Since 1958, when Lew Wasserman assembled the Universal lot, the real estate has grown to comprise U.’s corporate headquarters, production bungalows, the theme park, 20 permanent shooting locations and 30 stages.
The parcel is worth, according to the L.A. County Assessor’s property tax rolls, a hefty $1.44 billion.
Jim Watters, prexy and general manager of studio operations, estimates that 45% of the activity on the lot is third-party business — shooting commercials, TV and features.
“Any money that I take in from third parties really reduces the overall cost of operating the studio. If I can generate enough revenue, the studio basically costs the corporation very little or nothing,” Watters says.
Evaluating the piecemeal worth of the real estate, if sold to different parties, and how they might use it going forward should have a lot of lawyers scratching their heads.