EXCLUSIVE: After months of feverish speculation about how Vivendi intends to spend its $15B war chest, the company’s strategy is starting to come into focus. Deadline has learned the French media giant aims to become Europe’s most talent-friendly creative hub for writers, directors and producers. A Euro United Artists, if you will, through a series of company acquisitions and first-look deals with leading content generators.
Vivendi execs are also seriously exploring the viability of launching their own OTT service across Europe, in essence becoming a rival to Netflix. That would be a game-changer if it comes to pass, given the deep pockets, extensive libraries and distribution network Vivendi already boasts. The company owns French pay TV group Canal +, film division Studio Canal, and Universal Music Group, the world’s largest music company by revenue.
It would also mark the most serious competitive threat to Netflix since Ted Sarandos and Reed Hastings first unleashed their plans for world domination. There is a general feeling among the studios and leading independents that a competitor in the SVOD space would be welcomed with open arms by those already concerned at Netflix’s increasingly oversize influence.
To Vivendi’s advantage is the strategic relationships it has now with telcos Telefonica in Spain and Telecom Italia in Italy, in which it will own a 5.7% stake. Vivendi is set to become a leading shareholder in Telecom Italia following its divestment of Brazilian telco GVT to Telefonica. The ability to leverage those assets, particularly in terms of offering consumers quad-play services across the UK, France, Germany and now Spain and Italy would give Vivendi a formidable platform with which to take on Netflix, should it choose to move forward with that strategy.
The development should make for interesting reading for Netflix’s chief content officer Sarandos ahead of his keynote address at Cannes this week.
The coming months could see seismic shifts in Europe’s media landscape as consolidation sets in the race to control the digital age. Vivendi’s goal is to complement and collaborate with the studios, not compete, from the independent sector. That appetite spreads across film and TV.
Vivendi’s formidable chairman Vincent Bollore has streamlined Vivendi ever since 2012, when he first announced his intention to acquire a 5% stake. Since then, he’s overseen the sales of Vivendi’s stakes in telcos SFR in France and Maroc Telecom in Morocco as well as video game publisher Activision Blizzard. Vivendi’s share price has risen more than 30% since September 2012 as a result.
The company now is sitting on some $15 billion in cash, a significant part of which it intends to spend on strategically expanding its media activities. Also, Vivendi has launched a $550 million bid to take full control of Canal + as a further sign of its seriousness at turning the company into a global player. Through the vagaries of French law, Vivendi had up until now indirectly controlled some 49% of the Société d’Edition de Canal Plus business. Its board, however, has now approved a bid to buyout the whole unit.
That move comes after Bollore nearly tripled his Vivendi stake to 14.5% in just over a month earlier this year after coming under pressure from activist shareholders P. Schoenfeld Asset Management, who had questioned his strategy, called for the sale of Universal Music Group and larger dividends to the shareholders.
Even though Bollore reached a truce with the group ahead of a shareholders meeting April 17, the kerfuffle means that plans to move forward with the new media strategy are likely to be expedited. To that end, Bollore has brought on two key allies to the board: Franco-Tunisian media mogul Tarak Ben Ammar and Havas Media Group France chief exec Dominique Delport. The duo will be working closely with Bollore and the rest of the Vivendi board to implement the ambitious strategy.
Ben Ammar is a close business associate of Bollore, and a shareholder and founding board member of the Weinstein Co., as well as a board member of Telecom Italia and Italian investment bank Mediobanca, in which Bollore is a shareholder. Dominique Delport is global MD of Bollore-owned advertising group Havas Media Group and chiarman of the Havas Media Group in France and the UK.
Vivendi’s “United Artists” template will see it re-create the deals it made to acquire TV production companies Tandem Communications and Red through Studio Canal. Vivendi will likely acquire more production companies in both the film and TV space, as well as further expand its interests in Italy, Spain and southern Europe in general. Emerging markets in Africa and the Middle East are also in play, although these are seen as long-term flag planting moves rather than significant cash generators. Vivendi execs will also look to deepen its ties with leading local language content providers across Europe.
Vivendi reps were not available for comment.