Vivendi Deal Will Test Powerful Egos

Like a stage director, Barry Diller choreographed the opening moments at Monday’s news conference unveiling a landmark deal with his new boss, Vivendi Universal Chairman Jean-Marie Messier.

While Messier stood silent, Diller dictated to photographers that there would be no cliche handshake. “We’re going to stand here next to each other, happy, and things like that,” Diller said. Moments later, he instructed Messier, “OK, start and I’ll join you.”

So who’s running this show anyway? And, perhaps more important, can these two executives--who sorely need each other to succeed--share the same corporate stage for long?

Those are the questions being asked throughout the entertainment industry, where the executive suite often has proved too small for more than one ambitious mogul. In agreeing to combine Vivendi Universal’s TV and film units with his USA Networks entertainment operations, Diller is acquiring something he has fervently avoided for nearly a decade: a superior.

Diller knows firsthand the pitfalls of being an underling. He left the helm of Paramount Pictures in 1984 after chafing under the late Martin Davis, once dubbed one of America’s most demanding bosses, who headed the studio’s parent, Gulf & Western.

Fox owner Rupert Murdoch made it clear there was only one boss when he denied Diller’s request for a stake in the company, leading to Diller’s abrupt resignation in 1992.

After leaving Fox, Diller vowed never to work for anyone again, which is why his decision to work for Messier came as all the more shocking to Hollywood.

“Certainly, he wouldn’t take a back seat to anyone,” said Revolution Studios principal Joe Roth, who ran the 20th Century Fox film studio under Diller in the early 1990s.

Whether Messier can vault Vivendi Universal into the top tier of media companies hinges on Diller’s ability to fully exploit the company’s films and TV shows. Diller also has considerable clout on Wall Street, where Messier has struggled to articulate his vision of meshing entertainment with Internet and wireless technologies.

For Diller, the $10.3-billion deal is an opportunity to return to the top of the industry and use it as a platform to build his entertainment and Internet empire. But Hollywood history is littered with top-level clashes. Legendary Hollywood pioneer Louis B. Mayer was fired by Loew’s Inc. in 1951 as head of the studio that carried his name, Metro-Goldwyn-Mayer. Early Fox mogul Darryl F. Zanuck even fired his own son, Richard, in 1970.

Last month, cable pioneer Ted Turner acknowledged that he regretted not having bought Time Warner Inc. before the company and Chief Executive Gerald Levin snapped up his empire because “I would have fired Jerry Levin before he fired me.”

Walt Disney Co. Chief Executive Michael Eisner and longtime power agent Michael Ovitz were best friends for two decades, but they were unable to work side by side when Ovitz became Disney president. They split in late 1996 after slightly more than a year.

Still playing out are tensions between Viacom Inc. Chairman Sumner Redstone and his second in command, President Mel Karmazin, who joined Viacom when it acquired CBS Inc. last year. Many in Hollywood and on Wall Street are now wagering that the marriage won’t last, with Redstone repeatedly reminding everyone who’s in charge.

At Monday’s news conference, Diller sought to downplay any potential friction, joking and smiling with his new French boss. When the final question sought to clarify whom Diller will report to, he gestured toward Messier and replied, “Him.”

But rival moguls who know Diller say Messier, who is 14 years younger, would be well-advised to give Diller as much autonomy as possible if the relationship is to work.

“Barry thinks of himself as a powerful business associate, not an employee,” Redstone said. “I’m sure Messier is smart enough not to treat Barry as an employee, but rather as an important business associate.”

Added Eisner, “Messier should be thrilled that, unlike other people in Barry’s general age range, he has not gone off to contemplate a life in the South Pacific.”

In the 59-year-old Diller, Messier has landed one of Hollywood’s most accomplished executives, who pioneered the TV movie business at ABC, ran Paramount during one of its most successful eras and defied naysayers by successfully launching a fourth network with Fox.

Messier, 45, one of France’s best-known executives, has been on a mission over the last two years to transform utility company Vivendi into a global media empire, spending more than $60 billion in deals.

The two executives’ personalities are markedly different. The loquacious Messier enjoys talking without interruption for minutes at a time about Vivendi and his objectives. Diller, by contrast, is brusque, often making his point as economically as possible. When he lost the battle for Paramount Pictures to Redstone in 1994, Diller issued a five-word statement: “They won. We lost. Next.”

In Hollywood, where oversized egos clash regularly, similar corporate marriages have started off swimmingly only to end up under water.

Stephen Unger, managing partner of executive search firm Heidrick & Struggles’ media and entertainment practice, said problems in the upper echelon of Hollywood usually come “when the consummate insider meets the consummate insider. That makes for a combustible combination.”

But Unger said he believes that the Messier-Diller alliance has a higher probability of succeeding because Messier “is the consummate pragmatist,” with Diller “the consummate insider.”

Still, the combination is unusual. In Diller, Vivendi Universal gets a high-profile power player whose legendary temperament and intimidating management style earned him the nickname “Killer Diller” over three decades. And Messier is a newcomer who has clearly shown a longing to be a major player himself.

Three months ago, Messier relocated from Vivendi’s headquarters in Paris to a $17-million apartment in Manhattan.

Since buying Seagram and its Universal Studios operation last year for about $30 billion, Messier has taken every opportunity to bend the ears of investors, the press and fellow moguls about his ambitions to put Vivendi on par with such giants as AOL Time Warner, Viacom, Disney and News Corp. Last January, Redstone heard Messier’s pitch firsthand at a dinner party at the home of former Seagram Chief Executive Edgar Bronfman Jr.

“What I was convinced of was [that] he was committed to making Vivendi a major player,” Redstone recalled.

In his autobiography, “J6M.com,” published last year, Messier beamed about his company “becoming the first French member of this very exclusive club of communications giants.” He wrote that he was unashamed that he blurted out, “God, I’m so happy!,” at the news conference announcing the Seagram deal.

After attending the 2000 annual conference of media moguls organized by investment banker Herbert Allen Jr. in Sun Valley, Idaho, Messier wrote in his book, “I could have said, ‘God, they’re taking us seriously! We now have the means to achieve our ambitions.’ ”

Charming and animated, Messier has taken to the glitz of the entertainment business, putting in appearances at major movie premieres, posing for pictures and actively courting news coverage.

By contrast, Diller has made being a top insider seem almost effortless, becoming a celebrity in his own right. Virtually growing up in the business, Diller has commanded the spotlight through a career that includes working as a top ABC executive in his 20s, running Paramount Pictures at 32 and launching the Fox network for Murdoch in the 1980s.

There are a handful of exceptions to the theory in Hollywood that powerful executives can’t work together smoothly. President Sidney Sheinberg and Chairman Lew Wasserman meshed well at Universal Studios Inc.’s predecessor, MCA Inc.

“The dynamics of any relationship is difficult, and you learn to live with each other,” Sheinberg said. “It’s not dissimilar to a marriage.”

Likewise, Bob Daly and Terry Semel worked almost seamlessly running Warner Bros. for nearly two decades. The secret?

“Ego. Ego. Ego. Ego is the word,” said Daly, now chairman and partner of the Dodgers. “If you’ve got big egos, you’re going to have clashes.”