Vivendi/Davis/Diller News

[LadyCrais]

http://www.multichannel.com/index.asp?layout=print_page&articleID=CA275893

Oilman Davis Gears for Another Run at VUE


By Mike Farrell
Multichannel News
2/10/2003

Vivendi Universal S.A. has reopened talks concerning the sale of its U.S. programming assets to oil billionaire Marvin Davis, according to published reports last week. No imminent deal is expected, though.

Vivendi and Davis met Feb. 2 to discuss his $20 billion offer for Vivendi Universal Entertainment. Davis had originally made the offer in November — $15 billion in cash and the assumption of $5 billion in debt.

Vivendi officials declined comment.

Although Vivendi rejected the November offer as too low, reports in the Los Angeles Times last week said Davis indicated he may sweeten his bid.

In addition, the newspaper reported that Davis may also be formulating a plan for Vivendi to sell him the assets — which include cable channels USA Network and Sci Fi Channel, as well as the Universal movie studio and Universal Music Group — and manage to avoid a large tax payment to USA Interactive, the online company owned by VUE chairman Barry Diller.

Diller doings
USA Interactive — of which Diller is also chairman — owns a 5.5 percent stake in VUE. The company has said in the past that Vivendi would be required to pay it as much as $2 billion in the event of a sale. Vivendi has claimed the payment is closer to $1 billion.

In December, USAI filed documents with the Securities and Exchange Commission which claimed Vivendi had reneged on $620 million in payments for the company to offset taxes it must pay as a result of the sale of the cable networks last year.

But according to the Los Angeles Times, which cited unnamed sources, Davis and his team of lawyers have proposed buying an obscure holding company that actually controls the entertainment assets. By taking this route, Vivendi can sell the U.S. assets without triggering the restrictions in the agreement with USAI.

Recently, Vivendi has been aggressive in selling assets to pay down its $17 billion debt. So far, it has disposed of several non-core properties for a total of $6.8 billion.

Last week, the company said it sold its consumer press division to Socpresse for $216 million and closed the sale of its 89 percent interest in Canal Plus Technologies to Thomson Multimedia for $205 million.

Published reports said last week that while Vivendi chairman Jean-Rene Fourtou is in discussions with Davis, he has stressed that he wants to field other offers for the U.S. assets.

Liberty ties
Diller, for his part, is also rumored to be teaming up with Liberty Media Corp. to launch a bid for VUE. One possible scenario would have Liberty combining its Starz Encore Group LLC premium networks with VUE, then spinning off the unit in an initial public offering.

Last week, on USA Interactive's fourth-quarter conference call with analysts, Diller said his company is working with Vivendi to find a solution to the VUE partnership.

[AnnieBW]

You can find more information about Liberty Media at their website (http://www.libertymedia.com/faq/default.htm) . Looks like they already own a stake in USA Interactive, among others. I'm going to attempt to find out information on Marvin Davis, too.

- Annie

[LadyCrais]

http://www.thestreet.com/_tsclsii/tech/earnings/10068438.html

USA Interactive Sinks as Vivendi Sells Warrants

By TSC Staff
02/12/2003 11:46 AM EST

USA Interactive slid 7% Wednesday after Vivendi sold off a bunch of USA stock warrants in its continuing quest to raise cash.

The companies said Vivendi had agreed to sell 28 million USA warrants for $240 million in cash to Deutsche Bank, which in turn plans to sell notes exchangeable for the warrants. Three-quarters of the warrants carry an exercise price of $27.50, and the other quarter has a $32.50 exercise price, Vivendi said.


USA dropped $1.48 to $22.77 as investors worried about the prospect of more shares coming on the market. Vivendi dropped 20 cents to $15.25.

USA, the e-commerce outfit run by media hard-hitter Barry Diller, and French conglomerate Vivendi have long been entwined. In late 2001, the companies agreed to a complex swap of entertainment assets that matched Diller's USA Networks with Vivendi's Universal Studios, creating a new company called Vivendi Universal Entertainment. Diller runs and owns a small stake in the company.

Speculation on Wall Street has come to center on the question of precisely how Vivendi will extract value from the entertainment division, with Diller and numerous others being rumored as potential buyers. Vivendi has been intent on raising cash to pay down the massive debt load that Jean-Marie Messier racked up in turning Vivendi from a humble water company to a fast-expanding multimedia entertainment play. The company has sold billions of dollars' worth of assets and plans to sell more, it says.

_______________________________________________
Briefly, same topic without the stock info
_______________________________________________


Vivendi Selling USAi Warrants

Multichannel News
2/12/2003 2:41:00 PM

Vivendi Universal notified USA Interactive Inc. Wednesday that it has entered into an agreement to sell 28 million warrants to acquire shares of USAi common stock, plus an option to acquire approximately 4.19 million additional warrants, to an affiliate of Deutsche Bank AG.

In turn, Deutsche Bank announced that one of its affiliates is offering to sell notes exchangeable into approximately 28 million shares of USAi common stock.

USAi has been advised that the transactions are subject to customary closing conditions and should completed in three business days.

The company is not receiving any of the proceeds from the sale of the warrants from Vivendi to Deutsche Bank or from the sale of the notes by the bank.

[LadyCrais]

http://biz.yahoo.com/bw/030210/102183_1.html

Vivendi Universal Reports Revenues for 2002 and Fourth Quarter 2002
Monday February 10, 2003

relevant paragraphs
_____________________________________________
Vivendi Universal Entertainment (VUE):

Fourth Quarter 2002 Highlights: VUE revenues reached E1.8 billion up 16% principally due to the effect of the acquisition of USA Networks on May 7, 2002. On a pro forma basis (had USA Networks been acquired at January 1, 2001), VUE revenues would have decreased 7%. However, on a constant currency basis, VUE pro forma revenues increased by 1% on a pro forma basis. Strong performance in Universal Television was offset by lower revenues in Universal Pictures, Universal Parks & Resorts, and Spencer Gifts.

Fourth Quarter Highlights by business unit, on a pro forma and constant currency basis, include:

Universal Television Group revenues increased 31% principally due to increased licensing revenues of 60% for ongoing series such as Law & Order, Law and Order: Special Victim's Unit, Law and Order: Criminal Intent, and Just Shoot Me. Universal Television Networks, which includes USA Network and Sci Fi Channel, benefited from stronger advertising and affiliate revenues which increased by 12%. This increase in revenues is largely attributable to strengthening of the advertising market and the successful launch of new original programming such as Monk and The Dead Zone on USA Network, and Taken and Stargate SG-1 on Sci Fi Channel.
__________________________________________

and for you financial types
__________________________________________
Vivendi Universal plans to issue its fourth quarter and full year 2002 preliminary and unaudited earnings press release on March 6, 2003.

VIVENDI UNIVERSAL
PRELIMINARY BUSINESS SEGMENT REVENUES
(French GAAP, Unaudited)


ACTUAL (1)
------------------------------
Quarter Ended December 31,
------------------------------
2002 2001 %
Change
---------- --------- ------
(In millions of euros)
REVENUES
Cegetel EUR 1,821 EUR 1,707 7%
Mobile 1,585 1,489 6%
Fixed and Other 236 218 8%
Universal Music Group 2,075 2,115 -2%
Vivendi Universal Entertainment 1,828 1,571 16%
Universal Pictures Group 1,029 1,185 -13%
Universal Television Group 532 69 671%
Universal Parks & Resorts and Other 267 317 -16%
Canal+ 1,322 1,281 3%
Pay TV - France 671 635 6%
Film - StudioCanal 195 177 10%
Other 456 469 -3%
Maroc Telecom 372 309 20%
Vivendi Universal Games (2) 292 287 2%
---------- --------- ------
7,710 7,270 6%
Other 356 427 -17%
Vivendi Telecom International 120 72 67%
Internet 56 49 14%
Other(3) 180 306 -41%
---------- --------- ------

TOTAL VIVENDI UNIVERSAL
(EXCLUDING BUSINESSES SOLD IN 2002) EUR 8,066 EUR 7,697 5%
========== ========== ======

Businesses sold in 2002 8,382 8,652 -3%
Vivendi Environnement 7,903 7,900 0%
VUP assets sold during 2002(4) 479 752 -36%
---------- --------- ------

TOTAL VIVENDI UNIVERSAL EUR 16,448 EUR 16,349 1%
========== ========== ======




Year Ended December 31,
------------------------------
2002 2001 %
Change
---------- --------- ------
(In millions of euros)
REVENUES
Cegetel EUR 7,067 EUR 6,384 11%
Mobile 6,146 5,606 10%
Fixed and Other 921 778 18%
Universal Music Group 6,276 6,560 -4%
Vivendi Universal Entertainment 6,270 4,938 27%
Universal Pictures Group 3,877 3,615 7%
Universal Television Group 1,522 333 357%
Universal Parks & Resorts and Other 871 990 -12%
Canal+ 4,833 4,563 6%
Pay TV - France 2,652 2,530 5%
Film - StudioCanal 455 429 6%
Other 1,726 1,604 8%
Maroc Telecom 1,487 1,013 47%
Vivendi Universal Games (2) 794 657 21%
---------- --------- ------
26,727 24,115 11%
Other 1,385 1,289 7%
Vivendi Telecom International 461 242 90%
Internet 174 129 35%
Other(3) 750 918 -18%
---------- --------- ------

TOTAL VIVENDI UNIVERSAL
(EXCLUDING BUSINESSES SOLD IN 2002) EUR 28,112 EUR 25,404 11%
========== ========== ======

Businesses sold in 2002 32,877 31,956 3%
Vivendi Environnement 30,038 29,094 3%
VUP assets sold during 2002(4) 2,839 2,862 -1%
---------- --------- ------

TOTAL VIVENDI UNIVERSAL EUR 60,989 EUR 57,360 6%
========== ========== ======

(1) Totals represent actual revenues to be published in BALO. In order
to present meaningful comparative earnings trends for our major
businesses, refer to pro forma revenues in attached supplemental
information.

(2) Formerly part of Vivendi Universal Publishing (VUP). Includes Kids
Activities e.g. Adi/Adibou in France and JumpStart in the United
States.

(3) Principally comprised of Vivendi Valorisation (previously reported
in non-core businesses) and VUP assets not sold during 2002
(Comareg, Express-Expansion and the Brazilian operations - Atica &
Scipione).

(4) Comprised of VUP assets sold to Investima 10, which is wholly
owned by Natexis Banques Populaires in December 2002, Houghton
Mifflin sold in December 2002 and VUP's Business to Business and
Health divisions sold in June 2002.



VIVENDI UNIVERSAL
PRELIMINARY SUPPLEMENTAL REVENUES INFORMATION
(French GAAP, Unaudited)


PRO FORMA(1)
-----------------------------
Quarter Ended December 31,
-----------------------------
2002 2001 %
Change
---------- --------- ------
(In millions of euros)
REVENUES
Cegetel EUR 1,821 EUR 1,707 7%
Mobile 1,585 1,489 6%
Fixed and Other 236 218 8%
Universal Music Group 2,075 2,115 -2% (4)
Vivendi Universal Entertainment 1,838 1,980 -7% (5)
Universal Pictures Group 1,029 1,227 -16%
Universal Television Group 543 446 22%
Universal Parks & Resorts and
Other 266 307 -13%
Canal+ 1,300 1,281 1%
Pay TV - France 671 635 6%
Film - StudioCanal 195 177 10%
Other 434 469 -7%
Maroc Telecom 372 309 20%
Vivendi Universal Games (2) 292 287 2% (6)
---------- --------- ------
7,698 7,679 0%
Other 356 427 -17%
Vivendi Telecom International 120 72 67%
Internet 56 49 14%
Other(3) 180 306 -41%
---------- --------- ------
TOTAL VIVENDI UNIVERSAL
(EXCLUDING BUSINESSES SOLD
IN 2002) EUR 8,054 EUR 8,106 -1%
========== ========== ======
TOTAL VIVENDI UNIVERSAL
(ON A CONSTANT EXCHANGE RATE
BASIS, EXCLUDING BUSINESSES SOLD
IN 2002) 3%
======




Year Ended December 31,
-----------------------------
2002 2001 %
Change
---------- --------- ------
(In millions of euros)
REVENUES
Cegetel EUR 7,067 EUR 6,384 11%
Mobile 6,146 5,606 10%
Fixed and Other 921 778 18%
Universal Music Group 6,276 6,560 -4% (4)
Vivendi Universal Entertainment 6,978 6,874 2% (5)
Universal Pictures Group 3,927 3,803 3%
Universal Television Group 2,199 2,134 3%
Universal Parks & Resorts and
Other 852 937 -9%
Canal+ 4,742 4,563 4%
Pay TV - France 2,652 2,530 5%
Film - StudioCanal 455 429 6%
Other 1,635 1,604 2%
Maroc Telecom 1,487 1,351 10%
Vivendi Universal Games (2) 794 657 21% (6)
---------- --------- ------
27,344 26,389 4%
Other 1,385 1,344 3%
Vivendi Telecom International 461 242 90%
Internet 174 184 -5%
Other(3) 750 918 -18%
---------- --------- ------

TOTAL VIVENDI UNIVERSAL
(EXCLUDING BUSINESSES SOLD
IN 2002) EUR 28,729 EUR 27,733 4%
========== ========== ======

TOTAL VIVENDI UNIVERSAL
(ON A CONSTANT EXCHANGE RATE
BASIS, EXCLUDING BUSINESSES SOLD
IN 2002) 6%
======


(1) The pro forma information illustrates the effect of the
acquisitions of the entertainment assets of USA Networks, Inc.,
Maroc Telecom and MP3.com, as if these transactions had occurred
at the beginning of 2001. The pro forma information is calculated
as a simple sum of the actual results of Vivendi Universal's
businesses (excluding businesses sold in 2002) with the actual
results reported by each of the acquired businesses in each period
presented. Additionally, the results of Universal Studios
international television networks are reported by Universal
Television Group. This reclassification has no impact on the total
results of Vivendi Universal. The pro forma results are not
necessarily indicative of the combined results that would have
occurred had the transactions actually occurred at the beginning
of 2001.

(2) Formerly part of Vivendi Universal Publishing (VUP). Includes Kids
Activities e.g. Adi/Adibou in France and JumpStart in the United
States.

(3) Principally comprised of Vivendi Valorisation (previously reported
in non-core businesses) and VUP assets not sold during 2002
(Comareg, Express-Expansion and the Brazilian operations - Atica &
Scipione).

(4) On a constant currency basis, Music revenues would have increased
4% in the quarter and declined 1% in the year.

(5) On a constant currency basis, VUE revenues would have increased 1%
in the quarter and 5% in the year,

(5.1) On a constant currency basis, Universal Pictures Group revenues
would have decreased 8% in the quarter and increased 7% in the
year

(5.2) On a constant currency basis, Universal Television Group
revenues would have increased 31% in the quarter and 6% in the
year

(5.3) On a constant currency basis, Universal Parks & Resorts & Others
would have decreased 6% in the quarter and 5% in the year

(6) On a constant currency basis, Games revenues would have increased
7% in the quarter and 25% in the year.

[LadyCrais]

http://www.thedeal.com/NASApp/cs/ContentServer?pagename=TheDeal/TDDArticle/TDStandardArticle&Box1=NULL&Box2=NULL&banner=NULL&c=TDDArticle&cid=1045239815185&cont=open

Vivendi wants Diller out, woos Ovitz
by Richard Morgan
Updated 07:32 PM EST, Feb-14-2003

To rescue or to recuse? That's always been an issue confronting Tinseltown titan Barry Diller in his role as chairman and CEO of Vivendi Universal Entertainment. But it's about to assume extra urgency now that VUE's Paris-based parent company, Vivendi Universal SA, has become convinced it shouldn't decide on the future of its entertainment assets while Diller presides over them.

This is because Plan A for Diller has always been to spin off a percentage of those assets through an IPO that not only leaves him in charge but provides VUE's parent company with enough cash to further distance itself from last year's liquidity crisis. In other words, Plan A calls for Diller to rescue the entertainment assets from both absentee ownership and an uncertain future.

A spinoff of that sort would also likely include such non-VUE units as Vivendi Games and Universal Music Group — the former for bringing a compelling growth story to the mix; the latter because it may not elicit a motivated bid if shopped as a standalone. The two units, once combined with VUE, have been dubbed Universal Entertainment for corporate purposes.

They've also become the responsibility of Diller in his role of Universal Entertainment co-CEO, a title he shares with Vivendi Universal chief Jean-René Fourtou. Yet compared with Fourtou, few deny that Universal Entertainment is really Diller's domain.

As one source explained: "He's got all the confidential information, he knows where the businesses are going better than Vivendi, and he can even influence where they are going." His influence on Universal Entertainment is considered to be so much greater than Fourtou's it scarcely matters that Diller also has a day job as chairman and CEO of USA Interactive Inc.

"This is a very, very deep conflict," the source said of Diller's running the very assets of a publicly traded entity that he may even be seeking to buy. "And Vivendi's French bankers have finally convinced management it's a conflict they cannot overcome."

Although Diller declined comment on the potential conflict of interest, sources report he's aware of Vivendi's determination to get rid of it. He's also said to be aware of efforts to recruit a suitable replacement.

One source called it "a very tall order" to recruit an executive with sufficient stature to succeed Diller.

Granted, there's Mel Karmazin, the president and COO of Viacom Inc., who's still in contract negotiations with chairman and CEO Sumner Redstone. But Karmazin has already disdained managing what he calls entertainment's "arts and crafts" side — a reference that would presumably encompass such Universal Entertainment drivers as music, film and theme parks.

After Karmazin, the field is said to be so barren that former superagent Michael Ovitz has even been interviewed. Yet, image issues aside, Ovitz's chances appear dim in light of the key role played by VUE president and COO Ron Meyer, who has been at odds with Ovitz since their mid-1990s leave of the Creative Artists Agency they and others founded in 1975.

The fingerprints of Chase Carey, who resigned last year as News Corp.'s co-COO, can also be found on the job description. But Carey can be expected to return to News Corp. once its quest for DirecTV resumes in earnest.

Some in Vivendi regret that management didn't assert itself and deny Diller the top jobs when former Vivendi CEO Jean-Marie Messier created VUE in December 2001. Citing solid operating leadership from Meyer in film and from Doug Morris in music, one insider complained: "We should have said back then, 'OK, this is going to be the team.'"

But that's also when, to create VUE, Diller folded the entertainment assets of USA into the Universal Studios Group that Vivendi acquired on buying Seagram Co. in 2000. In addition to cash, deal terms left USA with 5.4% of VUE and Diller with 1.5%.

Diller's effective control over VUE has only increased since Messier was ousted last July and replaced by a leadership team even less conversant in matters Hollywood.

But Vivendi's Paris-based leadership is credited with knowing how to exercise financial leverage, which is why its Plan B may be to get Diller to recuse himself. Either that, the leadership team could say, or an outside bid like the $20 billion offer that Marvin Davis has on the table will receive increasing appreciation as being a most equitable and expeditious solution.

[LadyCrais]

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1045510849072&p=1012571727108


Vivendi pushes to settle Diller dispute
By Tim Burt in London and Peter Thal Larsen in New York
Published: February 18 2003 21:59 | Last Updated: February 18 2003 21:59

Vivendi Universal is stepping up efforts to resolve contract disputes with Barry Diller (pictured), the media entrepreneur heading its US entertainment joint venture, before a board meeting to decide the future of its US media assets.

Jean-René Fourtou, chairman and chief executive of the French media and telecommunications group, will also discuss break-up options for Vivendi Universal Entertainment - comprising studios, theme parks and cable television - in talks with Mr Diller over the next two weeks.

Mr Fourtou hopes to finalise a new VUE strategy ahead of a board meeting next month, when Vivendi directors will be asked to approve a dismantling process for the entertainment division.
The board is expected to consider options including an outright sale or partial break-up of VUE, in which Mr Diller holds a 1.5 per cent stake and his USA Interactive company holds a further 5.4 per cent.

Vivendi has already received a $20bn offer for the entire division from Marvin Davis, the US oil billionaire. Mr Davis, acting in partnership with Brian Mulligan, a former Universal executive, was said to have lined-up equity and debt financing for a full and formal offer.

But next month's board meeting will be forced to defer a decision unless Mr Fourtou can resolve a dispute over tax liabilities and investment obligations with Mr Diller, who last year folded his USA Networks cable-television business into VUE.

Negotiations between Mr Fourtou and Mr Diller were said to have reached in impasse in recent weeks.

One insider said the executives were "conflicting" over contract terms and payments for un- winding the VUE partnership.

The negotiations centre on settling $1bn of tax liabilities arising from a break-up of VUE; a separate $620m liability on preferred stock issued to USA Interactive, Mr Diller's e-commerce company; and a further obligation to re- invest 50 per cent of the proceeds from any sale of former USA Networks assets into VUE.

Mr Diller, who opposes an outright sale to Mr Davis, is understood to be compiling an alternative break-up plan. It is thought to involve a joint bid for VUE's television and studio operations from USA Interactive and Liberty Media, the investment group controlled by John Malone, a close ally of Mr Diller.

The theme parks business could then be sold to Blackstone, the US private equity group that already owns 50 per cent of Universal's Orlando theme park in Florida.

Separately, Vivendi is seeking a trade buyer for its computer games business and has issued a sale mandate to Citigroup, the US bank.

[Digger]

Thu February 27, 2003 02:28 AM ET
By Jill Goldsmith

NEW YORK (Variety) - John Malone's Liberty Media and Rupert Murdoch's News Corp. have discarded plans to bid jointly for DirecTV, people close to the companies said Wednesday. The move could jack up competition for News Corp. as it seeks to buy the satellite broadcaster. It also has cash-rich Liberty juggling two sets of talks as it pursues a separate acquisition of Vivendi Universal Entertainment. Liberty is hankering for Vivendi's showbiz assets, working closely on a deal with Barry Diller, chairman of Vivendi Universal Entertainment and USA Interactive. Liberty owns stakes in both companies. "It's fair to assume that Barry's in the middle," a person close to the situation said.
Liberty CEO Robert Bennett has trumpeted his company's interest in Universal as a prime content vehicle for Discovery and Starz-Encore. Vivendi is mulling an offer from a consortium led by Marvin Davis and has overtures from MGM, NBC and others.

Vivendi's board meets next week to consider a process for disposing of the
assets -- and address whether to sell them as a package or piecemeal. The latter option would require a settlement with Diller, Vivendi's partner in VUE. Some industry insiders speculate that Diller's controversial role at the company may make Vivendi Universal more wary of any deal that involves him.
********

Pretty much the same thing we've been hearing, with the exception that we're now being told NBC and MGM are interested in Univeral Entertainment. I don't recall hearing them mentioned before, but I could be wrong. In my opinion this will probably come to a head around the same time as the airing of 4.22. And I suspect that we probably won't hear a peep from anybody about picking up Farscape until then anyway.

[AnnieBW]

I can't resist...

GIVE ME LIBERTY, OR GIVE ME DEATH!

- Annie

[Digger]

NEW YORK (CBS.MW) -- At a time when domestic travel has been thrown
into uncertainty by a looming war with Iraq, Barry Diller's USA Interactive
said Wednesday it will buy up shares of Expedia that it doesn't already
own for $3.3 billion in stock.

Separately, Diller, USA's chairman and chief executive, said, he will resign from his position as CEO of Vivendi Universal (V: news, chart) . Now that Vivendi Universal has begun a formal process of reviewing options for its entertainment assets, it is "appropriate to step aside from any direct management responsibility," he said in a statement. Under the merger agreement, Expedia stockholders will receive 1.93875 shares of USA common stock for each of their shares, an exchange ratio that represents approximately a 30 percent premium, based on the Tuesday closing prices of USA and Expedia shares.

Shares of Expedia rallied by 20 percent, trading lately at $46.50, while USA fell back by $2.23, or 8.4 percent, to $24.28. USA said the transaction will result in slight dilution for its adjusted earnings per share for 2003, but the company said it nevertheless expects to meet its current 2003 earnings forecast of 75 cents a share.

In all, USA will distribute 124.9 million shares on a fully diluted basis to consummate the acquisition.

"The timing in relation toworld events is an accident -- as often happens with transactions, they take the tme they take to reach conclusion," said Diller in a statement. "However, we were, of course, mindful of events beyond our own -- and our decision to acquire the balance of Expedia under these circumstances does dramatically underscore our great belief in the robust growth and long-term value of online travel. "Travel may be affected by this or that event, for a day or a month or whatever, but if there is life then there is travel -- we bet on the latter," Diller said.

Bellevue, Wash.-based Expedia (EXPE: news, chart) , in which USA already holds a stake of 54 percent, provides online travel services for consumers and small businesses.

Also, USA said it expects to meet or exceed its first-quarter earnings projection; on average, analysts polled by Thomson First Call have been anticipating a profit of 14 cents a share, up from 5 cents earned in the same period last year.

The Manhattan-based company said it believes it will "significantly" exceed last year's first-quarter operating earnings.

Additionally, USA (USAI: news, chart) has authorized the repurchase of up to 30 million shares of the company's common stock.
*****************

Not sure how, or if, this is going to effect things, but it seems slightly odd that USAI would be spending this kind of money when their corporate parent Vivendi is having cash problems. It could (WARNING, Digger's speculating again!!!) be that they are consolidating the business as a prelude to other core assets being sold. Also, it's always nice to hear again that Barry Diller is stepping down!

[MediaSavant]

Originally posted by Digger
Not sure how, or if, this is going to effect things, but it seems slightly odd that USAI would be spending this kind of money when their corporate parent Vivendi is having cash problems. It could (WARNING, Digger's speculating again!!!) be that they are consolidating the business as a prelude to other core assets being sold. Also, it's always nice to hear again that Barry Diller is stepping down!

USAI's corporate parent is not Vivendi. USAI is a seperate corporation that has its own stock quote that is different than Vivendi's. Diller is involved in both companies. USAI and Diller do own some shares in Vivendi U, but that doesn't make the one company subordinate to the other or its corporate parent.

Before Vivendi, USAI was the stock quote abbreviation for USA Networks, Inc. That company owned USA, SciFi, and other things such as a lot of internet properties.

Vivendi bought the networks, but the remaining entities stayed with USAI and USAI was renamed USA Interactive, which is what it is now.

If you were a stockholder of USA Networks prior to Vivendi--as I was--you still had stock in USAI after the Vivendi deal. It's just that the company didn't own the networks anymore. Vivendi did.

I hope this all makes sense. I had to figure it out myself when the deal was going down.

That's different than when I owned CBS stock. My CBS stock became Viacom stock after CBS was purchased.

[blue]

Here are 3 articles from today's news--The third one in particular suggests that Diller might now be focusing more on the internet than broadcasting. Thanks for the clarification MS. It has been a bit confusing - VUE, USAI et al.

Diller resigns from Vivendi Universal Entertainment
By Luisa Beltran & Russ Britt, CBS.MarketWatch.com
Last Update: 2:19 PM ET Mar 19, 2003

NEW YORK (CBS.MW) -- Barry Diller resigned Wednesday as chairman and chief executive of Vivendi Universal Entertainment, ahead of a likely sale of the company's media assets.

Diller will remain chairman and CEO of USA Interactive (USAI: news), a spokeswoman said. His departure from Vivendi (V: news) coincided USA's announcement of a deal to buy out the 46 percent online travel agency Expedia it doesn't already own for $3.3 billion in stock. See story.

Similarly, Diller's departure could be the signal for a pending deal at Vivendi. Earlier this month, Vivendi Universal Chairman and CEO Jean-Rene Fourtou admitted that the media giant is in talks with various buyers regarding its U.S. entertainment assets.

"Now that Vivendi Universal has begun a formal process in reviewing options for its entertainment assets, it is appropriate to step aside from any direct management responsibility," Diller said in a statement.

While other entertainment conglomerates fell in trading Wednesday, Vivendi's stock gained lately by 27 cents, or 1.8 percent, to $15.07.

Vivendi's entertainment unit includes the world's second-largest movie studio, Universal, as well as the largest music company in Universal Music Group and the USA and Sci-Fi cable networks.

The media conglomerate, in a statement, said Diller's role as CEO was a "temporary assignment" that will be taken over by Fourtou. "I would like to thank Barry Diller for his efficient, friendly support over the past few months, which have been a very difficult period for Vivendi Universal," Fourtou said.

Mating dance

Paris-based Vivendi (V: news) has been shedding assets to slash its huge $40 billion debt load, which has been paid down to $13.5 billion.

On March 6, Fourtou said he had met with Los Angeles-based oil tycoon Marvin Davis -- who once owned the 20th Century Fox movie studio -- as well as Sumner Redstone, chairman of Viacom (VIAB: news), regarding a sale of Vivendi Entertainment. See full story.

Metro-Goldwyn-Mayer Inc. (MGM: news) also is a likely candidate since the studio has been in acquisition mode for some time. Liberty Media (L: news) also is believed to be a candidate, analysts say.

Spokespersons for Davis, Viacom and MGM would not comment on Diller's departure. Liberty officials could not be reached for comment.

To some observers, Diller was seen as a primary obstacle to a sale. But sources close to Davis and Viacom say their deals were structured in such a way that Diller wouldn't have been a factor in negotiations.

Viacom is primarily interested in Vivendi's cable assets, particularly the Sci-Fi channel, President Mel Karmazin has said. (Editor's note: Viacom is a significant investor in MarketWatch.com, the publisher of this report.)

Davis, on the other hand, is looking at all the Vivendi entertainment assets and may be the most serious bidder at this point. There was concern that a deal with Davis might trigger a $2 billion tax payout to cover expenses from the Diller buyout.

Sources say, however, that there are several layers of corporations between the entertainment assets and Vivendi, including vestiges of Seagram Co., a predecessor owner of Universal. Davis is said to have proposed a deal in which the corporation that he acquired would have no obligation toward Diller.

Davis is looking to buy an obscure holding company in order to bypass the tax payment. Officials from USA indicated they wanted to hang on to the assets in a Wednesday conference call to discuss the Expedia (EXPE: news) deal.

Davis is proposing a $20 billion deal for Vivendi's entertainment assets, which includes $15 billion for the properties and the assumption of $5 billion in debt.

Diller became chairman of Vivendi Universal Entertainment last May, when Universal Studios and USA Networks combined. Vivendi owns 93 percent of the partnership.

Long a major figure in Hollywood, Diller served as chairman and CEO of Fox Inc. from 1984 to 1992 and created Fox Broadcasting, now part of Fox Entertainment Group (FOX: news). Diller also served as chairman and CEO of Paramount Pictures Corp. for 10 years.

Luisa Beltran is a reporter for CBS.MarketWatch.com in New York.
Russ Britt is the Los Angeles Bureau Chief for CBS.MarketWatch.com.

Diller Steps Down From Vivendi Universal

Wednesday March 19, 2:23 PM EST

LOS ANGELES, Mar 19, 2003 (AP Online via COMTEX) -- Barry Diller resigned as co-chief executive of Vivendi Universal Entertainment on Wednesday, saying it was appropriate for him to step down while cash-strapped Vivendi Universal considers bids for the entertainment assets.

Diller was appointed interim CEO of Vivendi Universal's U.S.-based entertainment assets, which include Universal Studios and Universal's theme parks, last year while the Paris-based conglomerate concentrated on repaying a massive debt racked up from an acquisition spree by previous management.

Former oilman Marvin Davis has offered $20 billion for VUE, plus Universal Music Group. Vivendi also is holding talks with Viacom, MGM and other potential buyers of all or parts of its entertainment businesses.

Diller served as co-CEO with Vivendi Universal chairman Jean-Rene Fourtou.

"My executive role was never intended to be permanent," Diller said in a statement Wednesday. "Now that Vivendi Universal has begun a formal process in reviewing options for its entertainment assets, it is appropriate to step aside from any direct management responsibility."

Diller, 61, remains chief executive officer of USA Interactive, which operates the Home Shopping Network, Ticketmaster, Match.com and Expedia, among other companies.

Diller will continue to play a critical role in the future of Vivendi's entertainment arm. He personally owns 1.5 percent of VUE; USA Interactive holds a 5.4 percent stake and preferred stock in VUE.

Diller has served as head of Paramount and Twentieth Century Fox, where he helped launch the Fox Television network. While at Fox, he was instrumental in creating such shows as "Married with Children" and "The Simpsons."

He started his entertainment career at ABC, where he is credited with creating the "movie of the week" concept.

In a recent interview, Diller told The Associated Press he would be interested in an opportunity to bid for some of Vivendi's entertainment assets as long as it did not require him to serve as chief executive. Diller said his top interest is serving as head of USA Interactive.

"I think most people felt he probably couldn't run two public companies," said Richard Read, an analyst who follows USA Interactive for Credit Lyonnais Securities. "This reiterates his commitment to USA Interactive, which is a good thing."

Shares of USA Interactive fell $2.28, or 8.6 percent, to $24.21 in afternoon trading on the New York Stock Exchange, where Vivendi's U.S. shares rose 29 cents to $15.09.

Vivendi barely staved off bankruptcy last year as it struggled to cope with billions of debt, a collapsing share price, boardroom infighting and no clear strategy.

Through a fire sale of assets, Vivendi was able to cut its debt to 12.3 billion euros (about $13 billion) as of Dec. 31, compared with net debt of of 37.1 billion euros a year earlier.

The sale of entertainment assets is part of new CEO Jean-Rene Fourtou's plan to shed another 7 billion euros ($7.4 billion) in assets over the course of this year to return Vivendi to solid footing.

Vivendi and former CEO Jean-Marie Messier are the subjects of an investigation by French market regulators and Paris magistrates. In the United States, Vivendi is under investigation by the Securities and Exchange Commission, and Messier is a defendant in more than a dozen individual lawsuits that allege, among other things, that he hid the true extent of company cash problems.

By GARY GENTILE AP Business Writer

Copyright 2003 Associated Press, All rights reserved


Diller quits Vivendi to focus on USA

Wednesday March 19, 1:37 PM EST

(Adds details, comments throughout)

NEW YORK, March 19 (Reuters) - Media mogul Barry Diller on Wednesday resigned as chairman and chief executive of Vivendi Universal's (V)(EAUG) U.S.-based entertainment unit, moving the company one step closer to a decision on what to do with the division.

Paris-based Vivendi has been shedding assets as its pays down debt, and the U.S. film and television unit led by Diller that includes movie studio Universal Pictures and the USA and Sci Fi cable TV networks are considered among Vivendi's crown jewels.

Vivendi had widely been seen as selling the unit or spinning it off as a separate, publicly traded company with Diller possibly at the helm.

"My executive role was never intended to be permanent," Diller said. "Now that Vivendi Universal has begun a formal process in reviewing options for its entertainment assets, it is appropriate to step aside from any direct management responsibility."

Sources familiar with the situation said Diller has decided to focus his efforts on USA Interactive (USAI), the collection of Internet companies he controls and runs as chairman and chief executive officer.

The sources said Diller would have been much more likely to get a spin-off of Vivendi Universal Entertainment (VUE) accomplished by working inside the company than outside.

"What this tells me is that he's essentially given up doing anything with VUE," said one source. "He sees it as a huge distraction."

Others were still unsure exactly what Diller's motives were. One London-based analyst who asked not to be identified said the move was "not surprising," because the market has known for months that the VUE assets would be sold.

"But it does raise a number of possibilities," the analyst said. "Firstly, he could be distancing himself from VUE because he wants to make a bid for those assets; alternatively he knew that Vivendi was going to exit this business anyway, so he just decided to go now rather than later."

Separately, in a conference call to discuss USA Interactive's acquisition of the remaining portion of Expedia Inc. it does not own, Diller said USA did not have any intention of making an offer to Vivendi about acquiring the VUE assets.

"We have no intention of making a proposal," Diller said, adding later, "Frankly, we're in a fine position doing essentially nothing."

©2003 Reuters Limited.

[Digger]

Just saw this a Reuters.

Fight Over Vivendi's USAI Debt Could Be a Diller
Fri March 21, 2003 03:09 AM ET
By Meredith Amdur

NEW YORK (Variety) - Barry Diller relinquished his executive role at Universal Wednesday, but his battle with parent Vivendi may just be starting.

There is growing speculation that Diller's resignation as co-chief executive of Vivendi Universal Entertainment this week may in fact indicate a breakdown in negotiations over how much money Vivendi Universal would owe Diller's USA Interative in the event of a partial sale of Vivendi's entertainment assets.

Far from the amicable separation evoked by press releases from both camps this week, sources believe Diller's abdication -- explained as a way to banish concerns of a conflict of interest with USAI -- may also partly signal a stalemate in the two parties' overall working relationship.

In particular, they may be at odds over the interpretation of the capital gains tax liability created by last year's sale of USA Networks over how much Vivendi Universal would have to pay USAI, according to this view.

Some sources suggest that Diller privately believes he is due as much as $2.5 billion, while Vivendi insists number ranges from zero to $700 million.

On Wednesday Diller for the first time acknowledged that if Vivendi Universal is able to sell Vivendi Universal Entertainment (VUE) as a whole, no tax event would be triggered at all and USAI would be content to keep its preferred and common stock in the company.

The dispute then lies with how much the deferred tax liability would be if Vivendi Universal is able to dispose of pieces of VUE. Analysts say the exact amount is subject to interpretation based on which assets are sold, how and when. Vivendi Universal is standing by its estimate that the total liability is no more than $700 million in the event of a breakup sale. Diller's team refused to comment.

Investors were led to believe that negotiations over the issue have been ongoing.

While neither side will comment directly, it's generally believed that Diller's exit from Universal's helm was mutually desired: "Vivendi didn't want him there while they were trying to sell the business. ... It would have been like the Fox guarding the chicken coop," said one investor who's recently met with Vivendi executives.

Others speculate that the legendary tempers of both Diller and right-hand man Victor Kaufman simply may not have mixed well with the French during negotiations.

Resolving its contractual obligations to Diller, USA Interactive and the Bronfman family are critical if Vivendi Universal hopes to sell the U.S. entertainment assets in whole or in part.

As part of Vivendi's acquisition of USA Networks for $11 billion last year, USAI was issued preferred shares with a face value of $2.5 billion, maturing in 20 years. In December, Diller insisted that Vivendi must compensate USAI for tax paid on the interest received on these shares in the event USA Networks is sold, or roughly $600 million. Viv has recently indicated to investors that no payment will be made on this dividend tax and that the issue, from its point of view, has been resolved.
**************

Lots of interesting stuff. The key paragraph there is the one saying that "if Vivendi Universal is able to sell Vivendi Universal Entertainment (VUE) as a whole, no tax event would be triggered at all". We know that Vivendi wants to keep the music business, so they wouldn't be selling VUE as a whole. Therefore they will have to work out how much Diller is owed when they do sell the pieces. And I thought it had already been worked out. Bummer. This could take a while.

[Digger]

And this just in:

Vivendi picked bankers for Maroc Tel sale - FT
Fri March 21, 2003 01:55 AM ET
PARIS, March 21 (Reuters) - Media group Vivendi Universal EAUG.PA has appointed bankers to find a buyer for its 35 percent stake in Maroc Telecom as it seeks to shed assets to shore up its cash position, the Financial Times said on Friday.

Citing sources familiar with the situation, the FT said French bank Credit Agricole CAGR.PA had won a mandate to sell the stake in state-controlled Maroc Telecom, which Vivendi bought for $2.2 billion in December 2000.

Vivendi is expected to sell the stake to Morocco's largest capitalised stock the ONA Group ONA.CS .
The FT also said Vivendi had distributed an initial sale notice or "teaser" for its U.S. entertainment assets, including Universal Pictures movie studio and the USA and Sci Fi cable TV network.

***I'm not sure if the "teaser" means they have found a buyer or just that they have made it public that they are going to sell them. There will undoubtedly by updates later today and I will endeavor to dig them up and post them***

Media mogul Barry Diller this week resigned from top jobs at the debt-laden firm's entertainment arm, but stopped short of declaring himself out of the running for the assets Vivendi is looking to sell.