NEW YORK By now, Vivendi Universal has resigned itself to the fact that it’s not getting a $14 billion check for Viv U Entertainment anytime soon.
The board — if not Viv shareholders — also have probably come to terms with the need to stay in Hollywood, at least as a minority investor, for a few more years.
It’s also starting to dawn on Universal Studios employees that life as an NBC subsidiary could change life radically.
Whether by default or desire, Viv U seems ready to make a love nest with its preferred blue-chip buyer General Electric. A merger with GE would also mean the last of the Big Four broadcast nets has finally joined forces with a Hollywood studio.
Assuming Viv U’s board votes early next week to put Edgar Bronfman Jr.‘s $8 billion cash plus equity offer on the back burner and enter exclusive talks with NBC — and that’s still a big “if” — the nitty-gritty of valuation and corporate structure begins in earnest.
The Fairfield, CT-based owner of jet engines and ratings-challenged cable newsies never promised much cash in its dowry. But it does offer something far more important for the Gallic firm: a face-saving way to claim the maximum value in an auction that turned into a fire sale .
Having witnessed Comcast’s dim view of the value of VUE (studio valued at $4 billion and cable nets at $6 billion), NBC is wrapping up its own valuation of the U library and studio operations.
They too are unlikely to arrive anywhere close to the multiple that Viv U had been seeking.
At least not yet. If GE gets its way, U could be in for some cost-cutting that would make Barry Diller‘s reign look like a picnic.
Nervous back-office chatter about restructuring, cutbacks and new chains of command have begun.
At the center of speculation is just how big a role NBC Entertainment prexy Jeff Zucker might play in an enlarged TV production group.
Naysayers already have USA Network chief Michael Jackson pointed at the exits, to cite just one rumor.
Meanwhile, theme Parks will likely be sold off , while the pictures group will operate with a slimmed-down management team.
NBC is likely eyeing some $35 million-$50 million in annual corporate overheads at the studio alone that could be slashed. That could mean eliminating top management and breaking up the film and TV divisions.