Video Is Vivendi's Brightest Spot14 Aug, 2002 By: Joan Villa
Theatrical, video and games were among the few profitable divisions for media conglomerate Vivendi Universal, which reported a 12-billion euro loss for the first half of the year.
Newly installed chairman and CEO Jean-Rene Fourtou said the company will have to sell business assets worth 10 billion euros and cut what he called “the cash drain” from internet activities and corporate overhead. The company will also sell the publisher Houghton Mifflin that Vivendi bought last year for $1.7 billion, and Vivendi Universal Games, which reported 68 percent higher revenues during the first half.
Revenues at Universal Entertainment division, which includes movies, video and television, grew 46 percent due to the acquisition of USA Networks on May 7. On a comparable year-over-year basis, entertainment rose 21 percent thanks in part to Universal's strongest box office performance in four years, the company said. The studio also finished the first six months of the year ranked No. 2 among all studios in consumer spending for DVD sellthrough and for VHS and DVD rental revenue primarily from the hit releases Spy Game, A Beautiful Mind and Gosford Park.
Vivendi shares closed down nearly 24 percent to $11.66 following the earnings news and a downgrade by debt-rating agency Standard & Poor's, which cut the company's long-term corporate credit rating to “junk.”