Bloomberg: Levy Runs Tight Ship At Vivendi
March 19, 2009 at 5:33 AM (PT)
VIVENDI SA CEO JEAN-BERNARD LEVY is proving it takes an engineer to show that anomalous businesses can be more profitable than complementary ones, reports BLOOMBERG NEWS. While NEWS CORP. CEO RUPERT MURDOCH and VIACOM INC. Chairman SUMNER REDSTONE have been more visible in the media industry, their shareholders have missed stock gains LEVY has delivered since joining VIVENDI in 2002. The shares have more than doubled from a low of 9.30 euros the week he started. NEWS CORP. fell 32% in the same period, and VIACOM is down 60% since it became separate company in 2006.
LEVY, a former engineer with FRANCE’s telecommunications ministry, kept VIVENDI’s phone, pay-television and music units together as REDSTONE split his media assets. LEVY built disparate businesses that rely on subscriptions rather than advertising, helping VIVENDI weather the recession better than U.S. publishers and broadcasters including NEWS CORP.
"We can be very successful as a so-called conglomerate," LEVY said in an interview in NEW YORK. "At the same time other conglomerates can be very unsuccessful."
In the past 12 months, VIVENDI has fallen 18% in PARIS trading, outperforming a 39% drop in FRANCE’s CAC40 benchmark index. The plunge in global markets has pushed other media stocks below 2002 levels.
LEVY was instrumental in the sale of U.S. entertainment assets to GENERAL ELECTRIC CO., flying between PARIS and the U.S. in 2004 to hammer out details of the agreement that created NBC UNIVERSAL.
LEVY kept UNIVERSAL MUSIC GROUP, the world’s largest music company, even as global compact discs sales slumped. Cost cuts helped push the unit’s operating margin -- a measure of profitability -- to 14.8% last year from 12.8%.