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3. An uncertain future


Appointed to the leadership of a group now in total disarray on 3 July, Jean-René Fourtou, the former Managing Director of Aventis, inherits an extremely delicate situation. The banks concede an initial loan of Euros3 billion to deal with a liquidity crisis and allow Fourtou to begin an asset disposal plan and restore health to VU’s funds.
Theories abound in every subsidiary and the important role played by Canal+ in the French film industry only causes tension to grow. In July, the announced sale of StudioCanal causes the film producers’ guild and the authors’, directors’ and producers’ association (ARP) to react: they are afraid that the company’s rich catalogue of films will be bought by the Americans. Finally, at the height of summer, Jean-René Fourtou decides to maintain Canal+ and its subsidiary StudioCanal within Vivendi Universal. It is not until the next Board Meeting of 25 September that further details emerge about the Group’s stragegy, which confirms its re-positioning with regards to the entertainment media and telecommunications sectors.
Jean-René Fourtou announces a wide-ranging programme of disposal of assets – to the value of Euros12 billion over an 18-month period, Euros5 billion of which before the end of March 2003 – although the true nature of this programme is obscure, with the sole exception of the sale of the group’s general interest media activities; the Vizzavi Internet portal, the Canal Plus Technologies decoder sector and the sale of the Italian subsidiary of Canal+, Telepiù, sold for Euros1 billion to Rupert Murdoch (save any last-minute rethink).
Numerous other companies endure the same fate, like other Canal+ subsidiaries abroad, AlloCiné, and 39 per cent of UGC, Europe’s leading film exhibitor, owned by Canal+.
As for the rest, all theories are still being examined and the decision is delicate: the French State sees Vivendi Environnement as a vitally important national strategic resource, the Telecommunications arm attracts buyers but it is still the group’s biggest money-maker while the world of culture is ready to fight to save Canal+. For the moment, market analysts can see just one solution on the horizon: separation from VUE that covers the American film activities, television and the group’s theme parks. Some informed sources are convinced of a coming together between Universal Studios and DreamWorks. But for the moment, everything is on hold since a number of rather expensive clauses kick in the case of a sale, binding Vivendi Universal to its subsidiary VUE. Barry Diller would earn a fortune from such a deal and Jean-René Fourtou does not seem in the least inclined to give in to rumour-mongers according to whom the new VU management team has little or no experience of the entertainment sector. It appears that a poker game has begun at the top of the group, and this could mean unexpected novelties over the next few months.
Will the Vivendi Universal giant be forced to implement a serious sizing down, or will it weather the storm only to embark on new adventures?
At the present time no predictions are possible.

(The article continues below - Commercial information)
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