• by Paul Gough , December 3, 2003

Even as troubled multinational company Vivendi Universal tries to wend its way out of a financial mess, one of its soon-to-be divested assets - Vivendi Universal Entertainment - is posting improved results for the parent company.

Vivendi Universal Entertainment's revenues rose 12 percent to $1.47 billion in the third quarter, partly because of stronger results from its television networks, which include USA, Sci Fi Network, and Trio. Television network revenues were up 5 percent in the third quarter, thanks to growth in advertising sales and stronger pricing. Universal Television Production also performed better, with more sales of its television library, which includes the three "Law & Order" series that will be paired with NBC when the merger with NBC is completed. At the same time, Universal Pictures' fortunes declined because of what Vivendi said were higher marketing costs for its summer releases, which included "Seabiscuit," "Johnny English," and "American Wedding."

Jacques Espinasse, executive vice president and chief financial officer of Vivendi Universal, had little to say about the planned merger with NBC. It's scheduled to close sometime in the second quarter of 2004 following regulatory approval in the United States and Europe.

"The decision is being reviewed by the FTC [Federal Trade Commission] in Washington," Espinasse said. It's also being looked at by a Brussels, Belgium, counterpart to the FTC and the United States' Federal Communications Commission, because it involves a non-US company merging with a broadcast network.

At the same time, Vivendi Universal executives said that no ratings guarantees were given by either side as part of the decision-making process for the merger.

The merger will mean a lot to Vivendi, which will have a minority stake in the new not-as-ad-dependent NBC as well as less debt. When the NBC deal goes through, Vivendi Universal's debt will be about $15.7 billion. By the end of 2004, Vivendi Universal projects that its debt will be $6.04 billion.