Vivendi Universal Company

In a move to restore investor confidence in Vivendi Universal, the company's new management team has named a respected French TV executive as its new chief financial officer. Jacques Espinasse, chief operating officer at French satellite TV consortium TPS, faces a daunting task as Vivendi copes with a cash crunch and an investigation by French regulators into its financial communications with investors.

The rise and fall of Jean- Marie Messier's debt-ridden media empire is an old story in Hollywood, but the company's shareholders are still smarting over their losses. A jury in U.S. District Court in Manhattan offered them some consolation Friday, finding that Paris-based Vivendi misled investors about the company's financial health from 2000 to 2002. The federal jury found the company liable on all 57 counts of violating U.S. securities laws stemming from one of several class-action lawsuits brought by angry shareholders.

With the imminent departure of Vivendi Universal's chairman, Jean-Marie Messier, the big question in Hollywood is what becomes of the U.S. entertainment holdings bought by the French water giant during the last two years. The answer: They could be put up for sale or spun off, creating even more anxiety for entertainment divisions that have been riven by turmoil for nearly a decade because of management upheaval under three separate owners.

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.

Trumpeter-businessman Herb Alpert and partner Jerry Moss have gotten down to brass tacks with Vivendi Universal, collecting an additional $200 million from the French giant for a music publisher they sold three years ago. The payment, in cash and stock, was part of a contractual guarantee connected with the sale in 2000 of independent publisher Rondor Music. Alpert and Moss originally sold Rondor to Seagram Co. Shortly thereafter, Seagram was gobbled up by Vivendi.

One is a Saturday matinee popcorn movie replete with bare-chested musclemen, deadly swordplay, scantily attired damsels and ancient desert kingdoms vividly created through the magic of 21st century computer graphics. The other is an irreverent Muppet-like pay television show that takes delight in skewering the French ruling class with scathing wit and nimble political humor. Both are products of global entertainment giant Vivendi Universal.

As their legendary family fortune dwindled along with the price of Vivendi Universal shares, Edgar Bronfman Jr. and the Bronfman family emerged as key players in the undoing of the company's once-unchallenged leader. The Bronfmans, who control 5% of the French company, orchestrated a board rebellion that led to the forced resignation of Vivendi Chairman Jean-Marie Messier.

Right about now, the behind-the-scenes moneyman orchestrating Marvin Davis' audacious $13-billion bid to control Vivendi Universal's entertainment assets is somewhere on the Atlantic Ocean, hopefully closer to South America than to Africa. Will Mesdag is pausing from the biggest takeover proposal in the media industry this year to pilot his 60-foot yacht, the Constanter, toward St. Lucia from the Canary Islands in the annual Atlantic Rally for Cruisers race.

The long and often tortured script for Universal Studios was put to bed Wednesday as French-owned Vivendi Universal and General Electric Co. finalized an agreement to marry their entertainment assets in a deal that could spur far-reaching changes in Hollywood. As was widely anticipated, the two companies agreed to create an entity that combines the Universal movie studio, theme parks and TV businesses, including the Sci Fi and USA cable channels, with GE's television operations.

Vivendi Universal Chief Executive Jean-Marie Messier, who stormed Hollywood two years ago with grand plans to turn a sleepy French water utility into a global media powerhouse only to watch his empire suffer record losses, has succumbed to a coup engineered by investors and board members.

Vivendi's Universal Music Group said Friday that it had agreed to buy Sanctuary Group for $88 million to add merchandising and management of artists including Elton John. Universal Music's Centenary Music Holdings Ltd. will pay about 39 cents a share in cash for Sanctuary. That's 13% more than Thursday's closing price for London-based Sanctuary. The deal broadens Universal Music's scope, adding merchandising, artist management and talent businesses, as the company looks for new revenue streams.

Media and telecom conglomerate Vivendi said Thursday that its second-quarter profit rose 53%, boosted by the settlement of tax litigation and strong performances from its video-game and pay-TV arms. The French company reported earnings of 1.16 billion euros ($1.48 billion) for the April-June period. The company said its bottom line was inflated by a one-time gain related to the June settlement of litigation against U.S.

Vivendi agreed Wednesday to pay $2.1 billion to acquire BMG Music Publishing from German media company Bertelsmann in a deal that would give the French company the world's largest music publishing catalog and songs by artists such as Coldplay and Robbie Williams. Vivendi, as expected, beat out a group of other bidders that included Warner Music Group Corp., Viacom Inc. and EMI Group. Its Universal Music Group division was thought to have the nod from the beginning.

Media and telecom company Vivendi Universal reported a drop in fourth-quarter and full-year earnings because of one-time gains a year earlier, but it saw solid performances by its video games and music divisions. The French company said fourth-quarter profit fell to 1.25 billion euros ($1.48 billion) from 1.92 billion euros, and annual earnings dropped to 3.15 billion euros from 3.77 billion euros. Vivendi had 1.52 billion euros in gains from asset disposals a year earlier.

Vivendi Universal agreed to pay Matsushita Electric Industrial Co. $1.15 billion to gain full ownership of Universal Music Group and raise its stake in NBC Universal. Vivendi will buy Matsushita's 7.66% stake in a holding company that owns Universal Music and 20% of NBC Universal.

Vivendi Universal, owner of the world's largest record company, reported better-than-expected third-quarter profit as earnings improved at the pay-television and music divisions. Net income fell 35% to 647 million euros ($755 million) as Vivendi didn't repeat the tax gain that helped lift profit to 1 billion euros a year earlier. Third-quarter profit had been expected to drop to 585 million euros. Third-quarter sales rose 12% to 4.87 billion euros.

Vivendi Universal will pay a $50-million fine and former Chief Executive Jean-Marie Messier will relinquish a controversial $25-million severance package to settle charges that they misled investors about the media conglomerate's financial problems. Under a settlement reached with the Securities and Exchange Commission, Messier also will pay a $1-million fine and former Chief Financial Officer Guillaume Hannezo will be required to pay a $120,000 penalty and return $148,000.

In the executive suite of Vivendi Universal's Paris headquarters Monday, Chairman Jean-Marie Messier and his staff were making the final arrangements for this week's crucial annual meeting. Across town at Vivendi's sprawling television facility, where anti-Messier graffiti lines the halls, workers also are making final preparations for the Wednesday meeting. But they are packing up leaflets and T-shirts emblazoned with messages such as "Messier Super Liar" and "Messier Go Away."

Vivendi Universal said Tuesday that second-quarter net income rose 12% as it cut costs in the music and video game units. Net income rose to 758 million euros ($932 million), or 66 cents a share, from 678 million euros, or 59 cents, a year earlier, Vivendi said. The Paris-based company said it would beat its forecast for 2005 earnings, excluding some costs, of at least 1.8 billion euros.

Vivendi Universal, owner of the world's largest record company, said it received subpoenas from New York Atty. Gen. Eliot Spitzer in connection with an investigation of record company promotional practices. Vivendi's Universal Music is cooperating, the company said in a regulatory filing. The music group received subpoenas in September, November and March as well as several other requests for information related to its radio promotion practices, according to the filing.