Diller could rise amid Vivendi Universal drama

Apr 22, 2002  •  Post A Comment

What about Barry?
That was the nagging question surrounding USA Networks Chairman Barry Diller as Vivendi Universal fumbled through a top management shake-up last week.
Mr. Diller, who is working without a contract as chairman of the newly formed Vivendi Universal Entertainment, will likely stick it out and gather more power. There is speculation he could be named CEO of the corporate parent under embattled Vivendi Universal Chairman Jean-Marie Messier, or eventually succeed him.
Mr. Diller last week maintained a low-profile and a diplomatic stance, voicing support for Mr. Messier, whom he called “a victim of wild overreaction.” He is genuinely committed, he said, to what he calls the “possibilities of collaborating with Messier” to create what they call a “tier-one media company.”
Mr. Messier’s abrupt and tumultuous firing last week of Canal Plus founding Chairman Pierre Lescure empowers Mr. Diller, who likely will play a more expanded role in Universal’s film production. However, Universal Studios President Ron Meyer is on record as saying Mr. Diller will reserve his time and energy for the strategic repositioning of Vivendi Universal, which needs to create more ways to distribute movies, television shows and other entertainment.
It is unclear how long Mr. Diller will tolerate the high-powered shenanigans at Vivendi Universal even if he is a beneficiary. He could bolt to concentrate solely on his USA Interactive spinoff or continue to straddle both industries and possibly play a bigger role at the larger Vivendi Universal.
A Vivendi Universal board meeting April 24 is expected to render qualified support for Mr. Messier’s controversial reign. The company’s financial performance is expected to improve this year. Analysts expect Vivendi Universal’s first-quarter operating earnings to climb more than 10 percent without any more write-downs such as the $13 billion one announced last month-the biggest loss in French corporate history.
USA and Vivendi shareholders will vote on the merger of their TV assets this week at what could be explosive separate annual meetings. French investors are still smarting from Mr. Messier’s unceremonious firing of Canal Plus’ No. 2, Denis Olivennes, and from Mr. Lescure’s melodramatic departure last week.
During an April 24 earnings call with investors and press and during a USA Networks shareholder vote on Tuesday in Los Angeles, Mr. Diller is expected to elaborate on plans for the $10.3 billion merger of entertainment assets of his company and USAi. USA Network and Sci-Fi Channel are expected to immediately enjoy more program-buying leverage as a result.