Man Without Qualities

Monday, July 01, 2002

Never Give a Sucker an Even Break!

How easy is it to summon up sympathy for a billionaire?

Found a little?

How about a billionaire playboy who is given control of the family financial empire, which had succeeded in acquiring about a one-quarter interest in the world's premier chemical and industrial company, but sold it to acquire what eventually became a big interest in a weird French Water-TV-Studio-Music company mess?

Would it matter if the two year stock price chart of the French Water-TV-Studio-Music company mess ("V") tracked against E.I. Du Pont De Nemours & Co (DuPont) ("DD") and the S&P Index looked like this? Or if the five year chart looked like this?

The DuPont stock was worth $8.8 billion when Seagram sold it in 1995 to pay for its $5.7 billion purchase of Universal, but had increased a bit to about $9 billion in value in 1998. The Bronfmans became the largest shareholders in Vivendi by selling the Seagram Company and its Universal media properties for $34 billion in Vivendi stock in 2000

The Man Without Qualities has previously noted that every few years somebody "sells the studio" or "purports to sell the studio" to some happy, stupid, deep pocket from beyond Interstate 5 or the Pacific surf.

It could be a soft drink company from Atlanta.

It could be a Japanese consumer electronics company.

It could be a crooked Italian businessman backed by an even more crooked French bank.

It could be a billionaire playboy who is given control of the family financial empire and who likes to write songs.

Or it could be a French water company!

But, somehow, it just doesn't usually turn out all that well for outsiders who buy Los Angeles entertainment companies.

Viacom seems to be something of a counterexample for the moment. But, then, Vivendi seemed something of a counterexample for a moment ago.

One way or the other, one can be fairly sure that there will be some very serious conversations back in Toronto pretty soon.

UPDATE: Vivendi's share price soared 10% on reports that its current chairman is resigning. Investors seem happy with that.

On the other hand, one has to wonder about those investors, since they celebrated while "Vivendi directors have reportedly proposed Jean-Rene Fourtou, vice chairman of drugmaker Aventis, as his replacement."

Vice chairman of a drugmaker? They'll love that in Hollywood. Boy, will they love that in Hollywood.

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