It may own a mere 20% of NBC Universal, but Vivendi is calling the shots when it comes to whether the fabled movie studio and television company will end up in the hands of cable company Comcast Corp. or some other buyer.
That's because every year in November, Vivendi can opt to sell its stake.
There's also a little-known clause in the contract between Vivendi and General Electric Co., which owns 80% of NBC Universal, that gives the French media conglomerate veto power on any change in control.
Whether Vivendi decides to pull the trigger depends on a host of complicated factors, including the strength of the U.S. dollar and Vivendi's appetite to make bold bets.
Vivendi probably would use the proceeds from the sale of its NBC Universal stake -- valued at $5 billion to $7 billion -- to finance acquisitions in video games and telecommunications, where it already is a major player.
And until a few days ago it looked like Vivendi had a use for that money: It was on the cusp of buying a Brazilian telecommunications firm until that deal was thrown into doubt by the emergence of a rival bidder offering more money.
Now without an acquisition immediately in its sights, Vivendi might decide to hold on to its NBC Universal stake for another year. But waiting carries risks. The recession could further depress the value of media companies despite a recent uptick in advertising. In addition, the dollar could continue to slide, which means Vivendi would realize less from a sale.
Vivendi "should be asking themselves the question: Is there further upside by staying in NBC Universal for another year?" said Claudio Aspesi, senior media analyst for Sanford C. Bernstein & Co. in London. "This might not be a bad time to sell."
Indeed, not a bad time at all.
The French concern, founded 157 years ago as a water company, has carefully been piecing together assets to create a 21st century media operation. It owns the world's biggest music company, Universal Music Group, and two years ago created a juggernaut in the video game world -- Activision Blizzard Inc. -- that produces the wildly popular titles World of Warcraft and Guitar Hero.
Vivendi also owns the No. 2 mobile phone company in France as well as leading pay TV service Canal Plus, and is staking a claim on the tech-driven future of entertainment by combining businesses on the leading edge of the digital revolution -- video games and music -- with cellphones and broadband Internet.
