Vivendi Universal Case Study Project MGT 480: Business Research Applications

Essay by Robert KestenbaumUniversity, Master'sA+, December 2002

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Vivendi Universal Case Study Project

Vivendi Universal (VUE) currently holds the position as one of the world's leaders in media, communication, entertainment, publishing, environmental management, and water resources since its inception as Compagnie Générale des Eaux (CGE) in 1853 when it received an Imperial decree to supply water to Lyons (Vivendi Universal, 2001). After a series of acquisitions and business partnerships that included Canal+, Cegetel, SFR, Havas, Seagram,, USFilter, Universal Entertainment and Onyx Environmental, Vivendi Universal realized annual revenue of $56,490 billion at year-end 2001 (Multex, 2002). However, VUE has recently seen a sharp drop in stock prices and a downgrading by S&P and Moody's, which has resulted in the current troubles that Jean-Rene Fourtou, the new Chief Executive Officer who took office on July 3, 2002, faces as he struggles to turn the company around.

Company Background and Holdings

VUE is actually listed under two different stock symbols on the New York Stock Exchange (NYSE); V for Vivendi Universal and VE for Vivendi Environnement.

Under the Vivendi Universal umbrella, there are the following subdivisions:

Universal Music Group (UMG) - the world's leading music company with approximately 22.7% of the world music market. The first half 2002 unaudited revenue for UMG was ?2.87 billion (Vivendi Universal Music, 2001).

Vivendi Universal Publishing (VUP) - VUP is ranked third worldwide in the global publishing market with a first half 2002 unaudited revenue of ?2.14 billion. VUP holdings include Alianza Editorial, Houghton Mifflin, Blizzard Entertainment, Sierra Entertainment and Universal Interactive (Vivendi Universal Publishing, 2001).

Vivendi Universal TV & Film - This division includes Canal+, the European leader in pay and digital television services. Also included in this division is the Vivendi Universal Entertainment, which provides service and entertainment through the Universal Studios Group and USA Entertainment subdivisions. The combined first half 2002...