Vivendi Taps Diller for Bigger Corporate Role
Hollywood deal maker Barry Diller is taking his act to a bigger stage, to an audience that doesn’t care whether he can speak French because he knows how to read the universal language: the bottom line.
Diller has been tapped by Vivendi Universal’s top executive, Jean-Rene Fourtou, to play the part of interim co- chief executive of the ailing Paris-based conglomerate as it tries to sort out its identity and finances, according to sources close to Diller and the company.
Already chairman of Vivendi Universal Entertainment, Diller is being handed the bigger corporate role as the French parent is trying to ease investor concerns about the stability and competence of its management team.
The move also comes amid criminal investigations in France and the United States over allegations of financial improprieties, including whether Vivendi’s former chief executive misled investors about the severity of the company’s financial problems.
Since the ouster of former CEO Jean-Marie Messier in a boardroom coup, Hollywood corridors have been rife with speculation about the future of Universal and Diller, who is widely known for his business savvy and survival instincts.
Some suggest that Diller, who has remained silent about his long-range plans, is positioning himself to take the helm of a reconfigured Universal should it be spun off into a separate entity with publicly traded stock. Under that scenario, sources have said, Vivendi would retain a major stake in the company.
Vivendi board members are said to be eager to give the company a clearer mission by ultimately severing the U.S. entertainment holdings. One reason investors lost confidence in the company was because of its seemingly ill-conceived mixture of assets, from sewage plants to record labels.
Diller is expected to remain in his unofficial new role until Vivendi decides on the future of its Universal holdings, which were acquired two years ago in a three-way, $34-billion merger that included French pay-TV company Canal Plus.
Neither Diller nor Fourtou would comment on Vivendi’s management structure. But sources say the men, despite different personalities, have formed a close relationship since Fourtou took the helm this summer.
Fourtou, a former pharmaceutical executive who acknowledges knowing little about Hollywood, has been relying on Diller for his entertainment industry expertise, as well as for advice on Vivendi’s overall corporate strategy as its attempts to pare its $19-billion debt and sell money-losing ventures.
Diller ran Paramount Pictures in the 1970s and oversaw the creation of the Fox broadcasting network in the next decade. He became chairman of Vivendi Universal Entertainment after the French conglomerate bought his USA cable network and studio.
During his long run in Hollywood, Diller gained a reputation on Wall Street as a man with a golden touch.
Now that he will be spending more time on Vivendi’s overall corporate strategy, the company will backfill for him, sources close to the studio say.
Vivendi is expected to promote Kenneth Cron, who heads the company’s profitable computer and video games division. Sources say he will be given the title of chief operating officer of Universal’s entertainment assets, including the theme parks, cable operations and the studio, which will continue to be overseen by Ron Meyer.
In addition, Universal’s music division, the world’s largest, also may be added to Cron’s portfolio. It too will continue to be run by its current chief, Doug Morris.
Cron, 45, widely known within the world of video and online games, will instantly become a major player in the high-stakes world of film and television. He was picked, sources said, because of his strong entrepreneurial skills.
Cron joined Vivendi early last year when it bought his online games firm, Uproar Inc. Since then, he has presided over an empire that generates more than $600 million in annual revenue and employs 1,800 people in seven development studios.
In his new position, Cron will report to Diller, sources said. The appointments have not been officially announced.
Times staff writers James Bates, Alex Pham and Anita M. Busch contributed to this report.