Will Universal breakup favor
Hollywood media mogul?

By Gary Gentile, The Associated Press
Thursday July 04, 2002

LOS ANGELES — The Hollywood buzz this week is whether Barry Diller will reprise his role as media mogul if Vivendi Universal decides to sell its U.S. entertainment assets. 

Diller already serves as chief executive of Vivendi Universal Entertainment, the company formed in December after Vivendi Universal bought the entertainment assets of Diller’s USA Entertainment for $10.3 billion. The unit includes Universal Studios, which runs theme parks, and Universal Pictures, one of the more successful movie and television studios. 

Diller also serves as head of USA Interactive, a collection of Internet properties including Ticketmaster and Expedia. 

Whether his role will broaden depends in part on how Vivendi Universal decides to reduce its considerable debt load after the ouster of its flamboyant chairman, Jean-Marie Messier. Vivendi’s board will meet Wednesday to appoint an interim chairman and formally dismiss Messier. 

French newspapers and analysts speculated that Vivendi may be split into more manageable parts. Messier’s grand vision of a global media empire would be reversed if Vivendi opted to sell off the movie studio it acquired when it bought Seagram for $30 billion in 2000. 

In an internal e-mail sent Tuesday to VUE employees and obtained by The Associated Press, Diller said workers should not be distracted by Messier’s departure or speculation about the future of the division. 

“It is reasonable to be upset, saddened or simply confused and weary by the turmoil of the last period and the resultant change in leadership,” Diller wrote. “But it’s more important right now to view this change as the end of an increasingly distracting and tumultuous time and the beginning of a clear-eyed, long term and stable strategy.” 

Since taking the helm of Vivendi Universal Entertainment, Diller has led the unit with a light hand, concentrating more on his interactive assets, as he had said he would. Despite concern over Diller micromanaging Universal Pictures, key executives there have all agreed to serve for another five years. 

“His passion is with the interactive assets. That still makes a lot of sense to me,” said SG Cowen entertainment analyst Peter Mirsky. “Most of his compensation comes from the interactive side.” 

Diller would be the logical choice to lead the studio again should the unit either be spun off with the backing of the Bronfman family, which sold Universal to Vivendi, or if he mounted his own purchase of the assets.