Vivendi Universal is almost Bankrupt!

[Talsonic]

Vivendi Universal lost about 40% of its value today and there is great concern that they may not be able to pay their debts. As a result, Universal Orlando could shortly be only a memory. Check out this link: http://dailynews.att.net/cgi-bin/news?e=pub&dt=020702&cat=business&st=businessmediavivendidc

 

[pheneix]

Geez, do you want Universal Orlando to close or something?

Vivendi Universal will be soon be a memory, that is for certain. However, the parks will not close, or be sold off on their own (I've already described it here before, they are too connected with the Studio to be broken off). What will probably happen is that the US entertainment assets are going to be spun-off into a separate company (there are not any companies that could risk buying Universal Entertainment and Universal Music), probably with Barry Diller running the show, which would mean great things for Universal Orlando, as he would like to expand the theme park division as a whole. Either way, I will be shocked if Vivendi stiil owns Universal by the end of the year.

Of course, that brings me to Vivendi (and I am a shareholder in the company, BTW). They are a financial train wreck. They may try to pull everything together, but I have a feeling that Vivendi will go bankrupt and be sold off in pieces. The sooner Universal is broken off from this company, the better.

But please refrain from making sensationalist comments like that. The stunt that Le Monde pulled this morning (though unfortunately there was a grain of truth to it) showed just how far statements that are not accurate can trash a company.

 

[MrPromey]

How can they be spun off into another company when the company that owns them is in dept? I don’t understand how Universal as a wholly owned asset of Vivendi/Universal could be immune to the parent companies hard times.. Whatever happens, I don’t see an end coming to Universal Florida. I would have to disagree about there being no chance of the parks being sold off. While some filming is actually still done in USF, it’s minimal and provided at bargain basement rates to just about anyone they can get. Most of Hollywood doesn’t want to use the Florida studios which has been a problem for Disney and Universal from day one. That’s why you see so many credits for commercials on the walls of the two big soundstages in the park. Hasn’t anyone ever wondered how they can shut them both down for nearly two months while the set up and run haunted houses out of them both every year?

In the end, I don’t even see what the big deal would be if they did sell off the parks. The change, if it were to happen, would probably be totally transparent to guests. I mean, most of what’s in the Universal parks has been licensed for use from outside companies and nobody seems to notice or care. What difference does it make if the Universal name is also licensed? If you are a big fan of Universal the company, I suppose this would be a major blow but I also think that the day they became someone else’s property would have been the end of that kind of loyalty. Once one company gets absorbed into a larger one they become an asset of the larger company they are a property and a brand and little more. Look at Kodak. It’s now a brand for another larger company. How many people even realize it?

BTW Phoenix, if you are certain that Vivendi is going down, why are you still holding onto your stock? Aren’t you loosing money?

 

[pheneix]

>>>How can they be spun off into another company when the company that owns them is in dept?<<<

By basically breaking the company in half and and giving complete control of the US assets to the American board. In the process, the new CEO of Vivendi will almost certainly appoint Barry Diller to be charge of the new company.

Barry Diller could also buy the assets from Vivendi and get ownership of them, and it would not surprise me if he tried. Vivendi is starved for cash, and if they could unload Universal for $10 billion, I'm sure they would jump at the chance.

The other big scenario is that the Bronfman family could give the financial backing for a spin-off company. That would be ironic, but it could happen.

http://biz.yahoo.com/ap/020702/vivendi_diller_2.html

>>>I don’t understand how Universal as a wholly owned asset of Vivendi/Universal could be immune to the parent companies hard times<<<

It sounds weird, but it is almost true. Universal Studios and Music are the ONLY portions of the company that are performing well.

>>>In the end, I don’t even see what the big deal would be if they did sell off the parks.<<<

If it were to be sold off to Cedar Fair or Busch, then the types of attractions that Universal has been offering would be dramatically altered, more so with Cedar Fair than Busch. You could also expect maintenance at Universal's to lower as well.

>>>BTW Phoenix, if you are certain that Vivendi is going down, why are you still holding onto your stock? Aren’t you loosing money?<<<

At this point, I might as well hold on until the bitter end. The one thing that I was wise in doing was not buying more shares than what be would be safe for me. If I could ever get a return on the investment, then cool, but if Vivendi were to completely fall apart (like it is doing right now), I wouldn't lose my in the company either. I probably would have been better off dumping my shares when the stock was trading higher like I did with Disney (and if you want my opinion, I truly believe Disney will crash and burn even harder than Vivendi in the next year or so, and it will catch the entire financial world by surprise when it happens), but oh well.

 

[Talsonic]

Glad I got out when I did!

As you pointed out, the company will most likely be broken up and sold piece meal. Certainly MCA and Universal Studios will be hot properties, however, Universal Orlando is a another matter. It is at the bottom of the totem and is kind of a red headed step sister to the rest of the company. As I am sure you know, the various Disney parks account for about 25% of the total revenue of the entire Disney empire (the most generated by the flagship WDW). Universal Orlando accounts for a very tiny percentage of the total Vivendi Universal revenue. It is not a "hot property" so it will be sold unless Universal Studios wants to retain it for promotional reasons. Your guess is as good as mine as to who would buy it. Also, you have my sympathy. I sold all my Vivendi back in February, 2000 (and most of my Disney too)! I still hang onto a few shares of Disney for sentimental reasons, rather than real "investments". Also Mr. Promey, isn't Eastman Kodak part of the Dow Jones 30 (along with Disney and the other "big guns")? Did I miss a vital press release? You folks are very knowledgeable. Thank you!

 

[Rider]

You NEVER sell stock at a loss.

Now about VU and US:

Disney had a lot of trouble in the 80s as well. There was lots of talk about spin offs and break ups. Now look at it. Something will come along and sort things out. Something like Universal Orlando dosen't just close.

I dont see it being sold to Cedar Fair or Busch (or Six Flags, god forbid). Cedar Fair dosn't have that much money, Busch is owned by the Beer company, who have other things to think of then parks. They wouldn't be interested in a resort. Six Flags has money problems too, and for the cost UO would go for I dont think they would take it.

Besides, I dont think they would want to sell it to someone else anyway.

I have a fealing all things Universal will stay together. Under new management. And work out fine.

 

[Disney4648]

I dont care about Universal.


AOL Time Warner just hit a 52 week low today and the stock price is about $12, and disney is at $18.50. AOL Time Warner is one of Disney's biggest competitors and its good news to Disney that AOL is not doing so good. After the news that AOL stock hit a 52 week low, Disney's stock price went up. So, who's stock do you buy now that AOL and Universal arent doing well, Buy Disney Stock!

 

[Talsonic]

Basis in fact or fiction?

Hi pheneix. Are just being a sore loser or due you have some facts (i.e. economic indicators) that make you think your following statement is worthwhile:

"I truly believe Disney will crash and burn even harder than Vivendi in the next year or so, and it will catch the entire financial world by surprise when it happens"

What do you base this upon?

 

[Ian]

Geez all i can say is hopefully US doesnt close...lol...i really really wish i cud join all of u guys in your im smart with my bussiness and my share-holders talk but honestly its pretty hard for me to follow all of this if anyone wants to give me a break and possibly break this down a bit withut being an about it i wud appreciate it so if so thanx if not thats fine too as long as nuthing drastic like closing happens...

 

[Ian]

O and on another note ...there is no way disney will ever go bankrupt it is nearly physically impossible just think about all of the ways they make money...exp movies..music..merchandise...i mean honestly u r nutty for saying that and with all do respect dont u think that the executives of disney no when the should and shouldnt spend money yet they continue to plan and spend on building new rides and repainting and whatnot so just do to a slight profit downturn do to 9-11 doesnt mean in anyway that disney will be shutting down...dont insult us all...lol no offense:zipit:

 

[RogueHabit]

Originally posted by Rider
You NEVER sell stock at a loss.

Untrue. If the chances of a return are remote, it is sometime better to minimise your losses.

Anyhow, I can see that the parks would close as stated in the opening post. That seems like a knee jerk panic to me.

 

[pheneix]

>>>It is not a "hot property" so it will be sold unless Universal Studios wants to retain it for promotional reasons.<<<

It *IS* part of Universal Studios, it can't be broken off. And I am not referring to the unused soundstages that are sitting in the back either.

>>>So, who's stock do you buy now that AOL and Universal arent doing well, Buy Disney Stock!<<<

No, you don't buy any stock, especially Disney or any media companies. There is going to be a huge shake-up the the media congolomerate world in the near-future, Vivendi is only the first one to go.

>>>What do you base this upon?<<<

Let's see, in the theme park division, there is still soft attendance due to the soft economy, that in itself is not much a problem. The problem is DCA. Last year was a bad year for the park, but this year is going to catastrophic. They are only getting around 13.000 people a day in the Summer season, and around 7,000 in the slow seasons. Anyone who follows WDW's parks knows that is terrible.

For the networks, ABC is bleeding money, andif they have another bad season with all of the money they have poured into it, they could come to a grinding halt. That could wreck Disney's balance sheets.

Then there are the failing Disney Stores, a potential loss of hundreds of millions in the Pooh case (or even the Pooh license itself), the debt producing studios, and just all around bad things going on in the Disney company. They can't go on like this forever.

 

[TURKEY]

Orlando resort may be put into play
By Robert Johnson
Sentinel Staff Writer

July 3, 2002

In the corporate game of musical chairs, Universal Orlando has had four different seats since 1990. Now the music could be starting again.

The resort, with its two theme parks, three hotels and CityWalk entertainment complex, has unofficially been put into play by this week's management shakeup at French parent Vivendi Universal SA.

"Selling off entertainment businesses could be a quick way for Vivendi to reduce debt without cutting into its core assets," said Dennis Speigel, president of Theme Park Services, a Cincinnati-based consulting company.

Would a new owner be good for Universal and its 12,000 Orlando employees? "Could be. What has Vivendi really done for Universal in the last two years aside from own it?" said Bob Rogers, a Los Angeles-area attraction designer.

In fact, Vivendi has largely been an absentee caretaker since it acquired Universal's movie, television and theme park assets as part of a $34 billion purchase of Seagram Co. in June 2000.

A new theme park, Universal Studios Japan, opened in Osaka last year, but that was planned long before the French conglomerate took ownership.

At Universal Orlando, the only major Universal expansion in the past two years is the recently opened Royal Pacific hotel -- part of a five-hotel project first unveiled in 1993.

Universal Orlando President Bob Gault, brought in to freshen the parks during the travel downturn that followed Sept. 11, also has promised new attractions for 2003 based on the movies Shrek and Jimmy Neutron.

But with Vivendi's troubles -- Jean-Marie Messier is expected to officially be ousted today -- it is unclear what will happen to the entertainment division. Vivendi spokesmen would not comment on Tuesday.

But speculation is already swirling.

One New York money manager, Mario Gabelli of the Gabelli Group, said of Universal's future, "Render unto Hollywood the things that are Hollywood's and unto France the things that are French."

Under Gabelli's solution, embraced by many on Wall Street, Vivendi would keep its French water company, called Vivendi Environnement, as well as its wireless holdings and Canal Plus, Europe's largest pay-television provider.

The U.S. assets would be turned over to Barry Diller, who sold his USA Networks Inc. television properties to Vivendi for $10 billion a few months ago. Diller retained control of the now renamed USA Interactive, primarily an Internet company.

As part of the deal, Diller agreed to head up the newly created Vivendi Universal Entertainment Co., which includes theme parks in Hollywood, Orlando and Japan.

Sources say Diller's top executives have been visiting bond rating agencies to discuss the possibilities of Vivendi Universal Entertainment becoming a stand-alone company.

"It makes sense for someone to keep the theme parks and movies together, since they have such a close relationship," Speigel said. Many of the theme park rides and shows are based on Universal films such as Back to the Future and Men In Black.

But Rogers speculated that if another entertainment or media company buys the theme parks, it could upset projects currently in the planning pipeline -- possibly including plans for theme parks in Germany and mainland China.

For experienced industry veterans, he said, "The standard operating procedure when taking over a studio or a pride of lions is you kill all the cubs. You want to put your stamp on things," he said.

He speculated that a hands-on entertainment mogul such as Diller might really shake things up at the theme parks if he actually owned them.

"He knows that the best that can happen if existing projects are successful is that the previous regime gets all the credit. And if he allows projects to continue and they fail, it's his fault."

What might that mean to current plans for new Universal Orlando attractions? Rogers said, "They could get squashed."

Sallie Hofmeister of the Los Angeles Times, a Tribune Publishing company, contributed to this report. Robert Johnson can be reached at 407-420-5664 or rwjohnson@orlandosentinel.com.


Copyright © 2002, Orlando Sentinel


http://www.orlandosentinel.com/busi...070302jul03.story?coll=orl-business-headlines

 

[TURKEY]

I personally think that Universal will try and sell off the parks and entertainment division to Diller. I think that it will happen as long as the buyers can sell bonds, get loans, etc. to pay for the finances.

If this doesn't happen, I don't know what's going to happen. If it doesn't I don't know who would be able to get the financial backing needed to make this type of purchase, so Universal may just go down the tubes with Vivendi.

 

[MKCustodial]

Originally posted by pheneix
They can't go on like this forever.

Everybody said Marvel was doomed in the 90's and they came back to the top where they belong. I think Disney has every chance of doing it, it's basically a world-wide reference to entertainment and family fun.

 

[Disney4648]

Ok,
Look at CNN or CNBC, ok.....look whos stock is down -$3.80 today VIVENDI UNIVERSAL......ha!!!



And if you look at the best company in the World, Disney it is up about +$0.16, so compare them two and you get a $4 difference. Eisner & Roy E. Disney are doing a great job!

 

[pheneix]

>>>Orlando resort may be put into play
By Robert Johnson
Sentinel Staff Writer<<<

Geez, this guy wrote the same column a few weeks ago, only this time he is a little less negative. I guess he thinks if the could put the words "Universal" and "trouble" in the same story it will sell a few papers.

>>>I personally think that Universal will try and sell off the parks and entertainment division to Diller.<<<

Diller sold his assets to them for a little over $10 billion last year. Since the value of everything in Vivendi has plummited, he might be able to buy Universal Entertainment for the same price (and maybe even Universal Music). I'm agree with you.

>>>Universal may just go down the tubes with Vivendi.<<<

When all else fails, the Bronfmans may bit the bullet and buy Universal back. I can't see them letting their company completely fade into oblivion.

>>>Look at CNN or CNBC, ok.....look whos stock is down -$3.80 today VIVENDI UNIVERSAL......ha!!!<<<

Uh... DUH!!! Vivendi's credit rating is junk, they are nearly bankrupt, and they have just had a management shake-up of Biblical proportions. What are you expecting? Disney basically just had an average day.

>>>Eisner & Roy E. Disney are doing a great job!<<<

No, Eisner is Jean-Marie Messier in slow motion.

 

[stingrock23]

I hope Universal Orlando doesn't get sold to either Busch or Cedar Fair. I enjoy the 2 parks very much, and would like to see them continue with Universal movie themes, and i think this would be ruined by a takeover. Also, I went to Cedar Point for the first time 2 weeks ago, and it seemed rather dull and plain. Sure there were lots of coasters, but the entire park left me feeling sort of disappointed.

 

[Disney4648]

If Busch Gardens bought Universal Orlando, they would suck. But it will not happen.

 

[pheneix]

>>>If Busch Gardens bought Universal Orlando, they would suck.<<<

Yes it would. BGT's management is simply awful, even WORSE than Disney.