Bean counters, back to the drawing board. Round two of the major-league auction for the entertainment assets of Vivendi Universal has begun. A consortium of investors led by oil billionaire Marvin Davis was the only bidder knocked out after Vivendi’s board met last week — unless it comes back with a better financing plan and a substantially higher offer. The five other bidders, including heavyweights Liberty Media, General Electric, a group led by Metro-Goldwyn-Mayer, Viacom and a consortium led by Edgar Bronfman Jr. reportedly were told to boost their bids to at least $11.5 billion. Universal Music was taken off the block; revised bids for the Universal studio assets and Vivendi Universal Entertainment’s coveted cable networks USA Network and Sci Fi Channel are due in two weeks. After its Tuesday meeting, Vivendi said in a statement that a “very significant competition had arisen,” and “in-depth negotiations will now be pursued with selected bidders.” Morgan Stanley in Europe upgraded its rating on Vivendi to equal weight from underweight based on the higher estimated value of the assets up for sale. The recent ratings performance at Vivendi’s cable networks could only serve to increase the bidders’ desire to bring the networks into their own stable of properties. USA’s detective drama Monk bested its previous ratings high with the June 20 debut of its second season. The premiere drew a 4.1 household rating, up about 17% over the 3.5 rating from its premiere last summer. At Sci Fi, Stargate SG-1, also in its second year, earned a decent 1.9 household rating in June, one of the best ratings ever for the network. Two other Sci Fi series, Scare Tactics and Tremors, also are holding up well on the ratings front. Even as Vivendi sorted through initial bids, Cablevision and MGM announced a deal that would simplify Cablevision’s corporate structure and give MGM needed cash for its bid. Cablevision said it would buy MGM’s 20% stake in three of its cable networks — AMC, IFC and WE — for $500 million. Cablevision will pay $250 million in cash at the close, and another $250 million in cash or stock five months later. The move simplifies Cablevision’s ownership structure, and allows it to contribute its entire ownership stake in those networks to the Bronfman consortium bid for the Vivendi assets. The deal also gives MGM a bigger cash base to pursue its own bid for Vivendi.

The Daily


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