Posted: Mon., Dec. 17, 2001, 5:57pm PT

Gauls galled by Viv U pact

French fear shift in balance of power

PARIS -- The news that Barry Diller will take over from Pierre Lescure as head of Vivendi Universal's TV and film division prompted concern Monday in Paris, where the changeover has potentially far-reaching implications for French pay TV channel Canal Plus -- and the Gallic pic biz.

Assurances from Vivendi U CEO Jean-Marie Messier that Lescure would continue to play a very important role in the conglom did little to ease Gallic fears that the balance of power had shifted irrevocably toward the U.S.

Reacting to the news, Pascal Rogard, director of the powerful writers, directors and producers lobby ARP, told Daily Variety: "Before, Vivendi was leaning toward America; now it has toppled completely in that direction."

Rogard, one of the chief negotiators of a pact between French film producers and Vivendi U's Canal Plus, bluntly described Lescure's replacement by Diller as "very bad for European interests."

What, exactly, the French exec's role will be was far from clear Monday.

Canal Plus chief operating officer Denis Olivennes took over operational responsibility for Euro pay TV interests after last year's merger and set about stemming losses outside France via a series of unions, while analyzing the future of the Gallic pay TV ops.

In that same period, Lescure, as Vivendi U's TV-film topper, seems to have spent more time establishing himself in Hollywood.

At Monday's press conference, Messier said that Lescure would carry on overseeing the integration of Universal and StudioCanal, as well as managing a once-a-month panel of CEOs to ensure synergies among the conglom's divisions.

But Diller, too, on Monday pinpointed integration as forming part of his brief.

In contrast to doubts expressed by members of the showbiz community, Henri Weber, cultural affairs spokesman for France's ruling Socialist Party, was resolutely optimistic about France's continuing influence on the global media giant.

"Messier says that Lescure's position is assured, so let's take him at his word. We still think it is preferable to have communication groups of French origin, like Vivendi Universal, rather than French TV companies being swallowed up by outside interests," he said.

"All we ask, and we've had it until now, is that Vivendi Universal respect Canal Plus' obligations in France. We think that TV and cinema are not like cars or shoes: They are linked to a culture, a language."

Weber was alluding to France's hard-line and so far successful efforts to prevent further deregulation of the film and TV industries on the grounds that countries have a right to subsidize cultural goods.

Canal Plus' French pay TV service contributes to those subsidies, investing more than 900 million francs ($123.7 million) in French movies in 2000 -- a quarter of their total production budget.

Quizzed by French journalists over Vivendi U's French commitments Monday, Messier vowed: "The interests of Vivendi Universal are to have a wonderful U.S. major … and at the same time to keep Canal Plus and StudioCanal as the first support of the French film industry."

But he earlier aggravated French sensitivities by pronouncing that "the French cultural exception is dead."

Monday's announcement of specifics of the Vivendi Universal-USA deal did not escape the attention of France's broadcasting authority, the Conseil Superieur de l'Audiovisuel. While the CSA made no official comment, the change in Vivendi U's share ownership will likely be examined to ensure the conglom is not majority owned by non-European shareholders.

"As Vivendi Universal controls Canal Plus' French TV channel, that wouldn't be allowed under broadcasting law," a CSA source pointed out.


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