By Nick Kostov And Ruth Bender
PARIS--When Vivendi SA's Chairman Vincent Bolloré took the
microphone in front of top executives of its French pay-TV business
earlier this month, he made it clear that times had changed.
Three days before addressing Canal Plus's managers, Vivendi had
abruptly ousted the unit's No. 2 executive, Rodolphe Belmer, a sign
that Mr. Bolloré was tightening his grip on the TV firm.
"You will see us all the time now," Mr. Bolloré said July 6 to
the top 100 Canal Plus managers gathered at the channel's
headquarters southwest of Paris, accompanied by Vivendi's top
managers, according to people familiar with the matter.
Under Mr. Bolloré's predecessor--when Vivendi was still a much
larger and diverse company--Canal Plus and other units were given
more of a freehand in the day-to-day running of the business,
according to current and former executives.
Mr. Bolloré, who is also Vivendi's single-largest shareholder,
has changed that.
The billionaire has gradually exerted more control over Vivendi
since taking the helm in 2014. Earlier this year, he increased his
stake to nearly 15% in Vivendi and named some of his closest allies
to the company's board. He has also pushed the group's two main
units--Canal Plus Group and California-based Universal Music
Group--to coordinate more closely as he works toward creating a new
future for the media-focused group.
Now, Mr. Bolloré is pushing for concrete changes at the French
pay-TV business. The chairman wants to add "new functions and new
faces" to Canal Plus's top management team in September, according
to one of the people, in a bid to increase profitability and
audience numbers.
"Nothing in the organizational structure is set in stone," he
told the crowd of executives, including the long-running chairman
of the Canal Plus management board Bertrand Meheut, the people
familiar with the matter said.
For Vivendi, a lot is at stake in shaking up Canal Plus. The
pay-TV group is currently Vivendi's largest business, accounting
for more than half of its revenue and profit. But the unit has
struggled amid the economic downturn in France and heightened
competition on its home turf in recent years.
Overall, Canal Plus revenue has been boosted by international
activities and its film unit StudioCanal but the French pay-TV
business has struggled with new competitors such as beIN Sports, a
channel backed by Qatar, and online video service Netflix Inc.
Vivendi wants to change how costs are allocated for certain
programs, especially the five hours a day that are free to view,
according to the people familiar with the matter. The parent
company also wants to rethink its commercial strategy as Mr.
Bolloré is dissatisfied with audience numbers for certain flagship
programs such as "Le Grand Journal, " a nightly news talk show, and
popular satirical puppet show "Les Guignols."
Mr. Belmer, who oversaw the French programming as part of his
job, was asked to leave because he failed to make changes Vivendi
wanted to make to the channel's programming and budget plans for
the coming new season, one of the people familiar with the matter
said. Another person said Mr. Belmer challenged some of the changes
sought by Mr. Bolloré and was ousted as a consequence.
Mr. Bolloré faces a tricky task in trying to revive Canal Plus.
Pay television has suffered in many European markets as consumers
tightened their belts in the economic downturn and are turning to
Internet-based services for cheaper entertainment. Pay-TV revenues
in Western Europe are expected to be flat at around $32 billion
between now and 2020, according to Simon Murray, a senior analyst
at London-based Digital TV Research.
Mr. Bolloré will also have to navigate between cutting costs
while keeping some of the channel's flagship shows. French cultural
leaders and politicians were outraged earlier this month when news
reports suggested Mr. Bolloré was going to scrap "Les Guignols,"
which has lost viewers in recent years. Mr. Bolloré has since said
the program is a key asset to Canal Plus and an important part of
the channel's history.
Vivendi has slimmed down to refashion itself into a media
company, selling assets in telecommunications and videogames that
have left it with a nearly EUR10 billion, or about $10.8 billion,
cash pile. But besides a few hints, Mr. Bolloré has entertained an
air of mystery about his future plans for Vivendi.
The changes at Canal Plus suggest Mr. Bolloré will take a
hands-on approach not just in planning the company's future but
also in steering individual units.
"This is a strong signal that Mr. Bolloré will be a lot more of
an activist inside the company, not just a strategic architect,"
said Claudio Aspesi, senior media researcher at Bernstein Research.
"It's a way to remind everyone that he expects management to do
what the board wants it to do."
Write to Nick Kostov at Nick.Kostov@wsj.com and Ruth Bender at
Ruth.Bender@wsj.com
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