Vivendi wages war on two fronts

No wonder Mr Messier prefers New York

By James Arnold BBC News Online business reporter

It's a closely-fought vote; angry crowds have taken to the streets; the outcome will decide the fate of a haughty oligarch - and even possibly that of France itself.

Not the French presidential election, but the culmination of an unusually messy dispute at Vivendi Universal, France's leading media company.

Vivendi, until recently France's best-known commercial export, has hit the buffers in spectacular fashion, annoying shareholders with a string of feeble results, and aggravating the public with its irreverent attitude to French culture.

On Wednesday, Jean-Marie Messier, the company's chief executive and chairman, and the only French businessman ever to grace the cover of Time magazine, faces a shareholder confidence vote amid unprecedented grumbling about his leadership.

The result could do more to shape France's fortunes than the parallel struggle over the Elysee Palace.

Vive la difference

Mr Messier seems to have a knack of getting people's backs up.

During his six years at the helm of Vivendi, his steady accumulation of media power has made him something of a hate figure among liberals and conservatives alike.

Liar, or liberal bugbear?

The left frets about concentration of media ownership. The right has concerns over the dilution of French culture at the hands of Vivendi, which has unashamedly shaped its properties on the US model.

Last year, Mr Messier caused a storm by pronouncing the death of the "exception culturelle", the cherished notion that France could somehow stand aside from the creeping Americanisation of the world.

He has shifted Vivendi's centre of gravity from France over the US, ploughing billions into American acquisitions such as Universal Studios, and even moved himself into an $18m New York apartment.

'Supermenteur' under attack

Now, French prickliness has boiled over into outright rage.

A little bit of France in Hollywood

Last week, Mr Messier sacked the head of Canal Plus, Vivendi's French television arm, in an effort to stem haemorrhaging losses at the station.

Although Canal Plus's diet of game shows and soft porn was scarcely a symbol of French high culture, the ousting provoked protests among journalists, celebrities and intellectuals.

Protesters dubbed Mr Messier "Supermenteur" - "Superliar" - in imitation of the caricature of President Jacques Chirac on satirical show Les Guignols de l'Info, one of Canal Plus's top programmes.

A boycott of Vivendi media interests is being organised, and Vivendi has filed an official complaint over protesters' conduct.

War on two fronts

Bitter as the protests have been, Mr Messier - ironically, pretty much a liberal himself - should have little trouble in shrugging them off.

The trouble is, he is under assault on another front.

Wednesday's vote is driven by shareholders, embittered at the halving in Vivendi's share price over the past 18 months.

The problem, they argue, is lack of leadership.

Over the past five years, Vivendi has been transformed from a dowdy water firm - it changed its name from Compagnie Generale des Eaux in 1998 - into, in its own words, "a consumer-focused, performance-driven, values-based global media and communications company."

Mr Messier splashed out on a string of wildly diverse acquisitions and launches, including online music firm MP3.com, educational publisher Houghton Mifflin and mobile portal Vizzavi.

In the process, Mr Messier earned a reputation as a business visionary, even co-opting the nickname "j6m" - "Jean-Marie Messier, Moi-Meme, Maitre du Monde" - "Jean-Marie Messier, Myself, Master of the World" - from his caricature on Les Guignols.

Messier business

Few of those deals have borne fruit, however, and shareholders complain that Mr Messier was far more interested doing deals than in making them work.

Mr Messier says France is not American enough

Some have flopped hugely: Vizzavi, a joint venture with Vodafone, has seen its informal valuation drop from $30bn to zero.

In March, the firm announced a $12bn loss for 2001, hammered by the withering value of its portfolio.

At the same time, there have been persistent concerns over opaque accounting at the group, concerns that were overlooked during the internet boom.

And even if the accounts make sense, shareholders worry that Vivendi is in essence a conglomerate, arguably worth more in pieces than as a whole.

Left and right

Mr Messier is now being pulled in two directions.

Mr Messier holds himself up as a role model

On the one side, the liberal elite - including the powerful state apparatus and many of his own staff - would like to see Vivendi based more on principles and less on profit.

On the other, many of the firm's shareholders would like to see more attention paid to strategy, and less to empire building.

By taking on Canal Plus, Mr Messier seems to have decided which way to jump.

His tough line with the channel may have lost him many fans, but should prove sufficient evidence of action to cement his support at Wednesday's vote.

Past, or future?

But while Mr Messier should survive in the top job, the fortunes of his firm will not necessarily turn around decisively.

For all its new economy sheen, Vivendi has not evolved significantly from its watery beginnings.

Just how far has Vivendi travelled?

Vivendi lays great stress on its media assets, but still earns more than half its revenues from its stake in Vivendi Environnment, the bundled-together rump of its water and waste businesses.

And Vivendi's spending spree was accompanied by the sort of commercial imperialism - "planting the tricouleur on American soil", and so on - that characterised stodgy old French businesses such as Credit Lyonnais and Elf Acquitaine.

Mr Messier likes to portray himself as the future of French commerce, unafraid to speak controversial truths and take tough decisions.

In fact, whether or not he wins on Wednesday, he is really more redolent of France's past.