Vivendi, Label Conclude a Deal

Vivendi Universal would buy DreamWorks SKG’s recorded-music division and continue to distribute the entertainment firm’s films until 2010 under new pacts announced Tuesday.

Vivendi, which would pay an estimated $100 million for DreamWorks Records, plans to place the label under its Universal Music Group. The deal, the outlines of which were reported more than a week ago, signals DreamWorks’ abandonment of a costly effort to build a competitive label from scratch.

For Universal, adding DreamWorks would bring such acts as Nelly Furtado, the Isley Brothers and country star Toby Keith, whose new album, “Shock’n Y’all,” is expected to capture the No. 1 spot on the nation’s pop chart this week.

DreamWorks label chief Mo Ostin, a four-decade industry veteran, is expected to retire.

The deal had been a tricky one for Vivendi, which also was in talks to extend its existing distribution deal with DreamWorks’ studio, home to such hits as “Shrek” and “Gladiator.”

Insiders believed that if Vivendi couldn’t reach a deal with DreamWorks’ music label, DreamWorks SKG would sever ties with Vivendi’s Universal Studios.

Such a move probably would have reduced the studio’s value just as Vivendi was closing in on a deal to sell it to NBC. The new accord would guarantee Universal the right to distribute DreamWorks’ films worldwide.

-- Jeff Leeds