| To the Rescue |
13 October 2003
|
GE to Buy Universal from Vivendi
Europe's Vivendi will largely extricate itself from the US market disaster its former chairman Jean Marie Messier created with the sale of Universal Studios to General Electric, which owns NBC. The deal is a winner for Vivendi ( the least bad result possible) and for GE (a stronger NBC) and should be scrutinized heavily by the government before it proceeds. The American republic may lose by the sale.
From a business standpoint, Vivendi had little business ever entering the US entertainment market -- Mr. Messier took a dull water company, ran up its debt, bought up some non-water assets, and when the bubble burst, lost his job while the shareholders lost their shirts. A huge debt reduction and a solution to most of the company's cash problems look good right now.
The problem for America is the concentration of more and more TV channels into fewer and fewer hands. The homogenization of media is inherently bad for any republic as it diminishes discourse, and congressional action recently to prevent the FCC from changing rules on local ownership underlines this. It is not that NBC will have access to all the moves Universal ever made that bothers the thoughtful but rather than GE's board controls more and more of what will be viewed.
At the same time, it makes NBC a more powerful competitor for Viacom and Disney, which own the other main networks. This argues in favor of the sale, and if investigation bears this out, NBC Universal will help preserve a level of diversity in the American media that NBC alone could not.
Not all mergers are bad, not all mergers are good. The small deals don't matter much. This deal is about more than billions; it is about speech and American culture. The US government owes GE, Vivendi and the electorate an inquiry that determines just what this means to everyone -- and soon.
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