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A Swift, Sad Ending for Hollywood Drama

July 03, 2002|JAMES BATES and THOMAS S. MULLIGAN | TIMES STAFF WRITERS

It has become one of Hollywood's most predictable scripts.

An outsider, usually a foreign company, spends billions of dollars to acquire an entertainment empire, full of dreams of meshing technology with the "content" Hollywood churns out in the form of films, TV shows and music. By the final act, the chastened buyer is in full retreat.

Add to the list 45-year-old French executive Jean-Marie Messier. He formally lost his job Tuesday as head of Vivendi Universal, known for "The Mummy" films, TV shows such as "Law & Order," Universal Studios theme parks and a roster of top recording artists that includes Eminem. Messier told his staff in a message he stepped down "to restore peace and calm" at the company.

Vivendi joins a long list of scorched buyers, including Japanese electronics manufacturers Matsushita Electric Industrial Co. and Sony Corp., Canada's Seagram Co. and Internet provider America Online Inc., whose oversized ambitions about entertainment and technological synergies crumbled because of bad planning, poor management or a failure to figure out Hollywood's quirky business culture

"Plus ca change, plus c'est la meme chose--the more things change, the more they stay the same," said New York money manager Mario Gabelli.

Or, as Kaufman Bros. analyst Paul Kim put it, "It's another case of a foreigner coming in like a drunk and overpaying for every asset."

The dramas usually play out for several years, which is why Messier's downfall was unusually swift, coming just 19 tumultuous months after Vivendi consummated a deal to buy Universal parent Seagram. Indeed, until recently Messier insisted he would stay in the job for as long as 15 years.

At a May retreat in Orlando, Fla., Messier reminded executives that his boyhood home was nestled in the French Alps. Messier promised that even as company shareholders and directors were mobilizing against him, he would "stand tall in strong winds," like the mountain climbers he knew growing up.

Instead, Messier was buried under an avalanche of blunders. In the message to his employees, Messier said, "Mistakes have been made, but they can all be corrected; and that's what I had started to do."

Messier talked a good game with his French-accented English. He would tell anyone who would listen how he planned to move the staid entertainment businesses of Universal Studios Inc. into an untethered wireless world in which people could download Shania Twain's music or scenes from "The Scorpion King" as easily as they dial a friend's phone number.

His decision to transform Vivendi, a staid French waste-management and water company, into a synergistic entertainment and technology company through a spending spree of more than $60 billion came the day in January 2000 he learned that America Online was buying Time Warner.

Universal's entertainment operation of late has performed well, with a stellar box-office year in 2001 and a music business that dominates the charts.

But Messier's larger vision required a huge leap of faith that few investors were willing to make. They beat down the company's stock price from the beginning of the deal, expressing frustration with both the lack of a concrete strategy and the dearth of numbers that conform to U.S. accounting standards.

All the while, Messier continued to talk about telephones being used for entertainment and Internet venture Vizzavi, a portal that once was the cornerstone of his futuristic strategy but proved a financial dud.

Compounding Messier's problems was a combination of hubris and an insatiable desire to promote himself.

Messier wrote a 247-page autobiography published in 2000 in France titled "J6M.com." That stood for "Jean-Marie Messier, Moi-Meme, Maitre du Monde" or "Jean-Marie Messier, Me, Myself, Master of the World." Although Messier insisted that the title was playful, critics nonetheless said it captured what they see as an oversized ego.

Messier continually irritated the French, once joking that his homeland was "a small exotic country." He fired popular French TV executive Pierre Lescure, head of Canal Plus, making the firing an issue in France's presidential election.

Last year, Messier moved to New York and began referring to himself as a New Yorker to tweak the French media.

He did indeed launch himself energetically into the cultural and civic life of his adopted city. In less than a year in Gotham, Messier joined the board of the Whitney Museum of American Art and reportedly is under consideration for a spot on the board of the Metropolitan Opera.

His wife, Antoinette Messier, is a new board member of the New York Philharmonic. Messier also became chairman of the media center of the Museum of Television and Radio in New York.

But Messier, like other corporate chieftains, was unable to conquer the economics of media conglomeration and the notion of synergies.

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