French Company Holds Nbc's Fate In Its Hands
Vivendi, the French water-company-turned-media-conglomerate, may control the fate of NBC Universal, the New York Times reported today (Monday), noting that a little-known clause in its contract with GE gives it veto power on any change in control of the company. It has been widely reported that GE, which bought 80 percent of Vivendi's holdings in NBC Universal in 2004, wants to sell the studio and TV company to cable provider Comcast. But Vivendi, which retained 20 percent of its ownership in NBC Universal (and 100 percent of its ownership in Universal Music Group), has a window in November each year in which it can opt to sell its passive stake to GE. The Times pointed out that although Vivendi has no particular reason currently to sell, forecasts for media companies in general have been cloudy; moreover, the dollar continues to weaken against the euro, thereby depressing whatever earnings it does accrue from its U.S. holdings. Claudio Aspesi, senior media analyst for Sanford C. Bernstein & Co. in London, told the Times "This might not be a bad time to sell." Meanwhile, Daily Variety reported today (Monday) that Universal Music's Vivendi Entertainment unit is "looking to tap into the faith-based market" by acquiring North American theatrical distribution rights to the feature Letters to God from Possibility Pictures. Vivendi Entertainment, the trade publication noted, plans to release its first film, New York, I Love You, on Friday. The report suggests that Vivendi could very well use any proceeds from the sale of its NBC Universal sale to expand its own presence in the movie business via Universal Music.