Vivendi Pulls Out of Deal With Ovitz

Vivendi Universal has halted financing of a joint film production venture it had with a unit of Michael Ovitz’s Artists Management Group, the companies jointly announced Saturday.

Under the settlement, Vivendi will pay AMG’s Artists Production Group a “substantial amount of money” but will stop providing it with overhead and development financing, said Michael Burns, a spokesman for Artists Management Group.

Vivendi Universal has been negotiating for weeks to end the relationship with APG, sources told The Times.

Vivendi has plans to shutter its StudioCanal USA unit, which struck a deal with the Artists Production Group in 2000 to cover overhead and costs incurred in developing films--about $8 million a year for three years.

With StudioCanal, APG has developed 17 films. None has been put into production.

Paris-based Vivendi will retain a financial interest in those nascent projects, but Artists Production Group will assume control of them as it seeks new funding and distribution partners, Burns said.

He said the group has four other projects it previously removed from the umbrella of the partnership and moved to other studios to keep the projects alive.

Vivendi Universal also plans to close its Universal Focus unit. The closures are part of a plan to consolidate its specialty film divisions once its purchase of the entertainment assets of Barry Diller’s USA Networks is completed. Diller’s film unit, USA Films, is expected to emerge as the sole specialty film unit for Vivendi Universal.

The settlement is a setback to Ovitz and his Artist Management Group, which has suffered hits to its television unit as well as the departure of some executives.

Ovitz co-founded Creative Artists Agency before leaving to become president of the Walt Disney Co. in 1995. He left Disney in a highly publicized fallout that garnered him $38 million in cash and roughly $100 million in company shares, and began Artists Management Group three years ago.