Just about every major media company has been mentioned as a possible suitor for Vivendi Universal’s vast entertainment empire, but one: Disney.
Yet it turns out Disney execs have indeed expressed to Vivendi an interest in buying its U.S. entertainment assets – which include a movie studio, the USA and Sci-Fi cable TV channels, and Universal Music, the world’s largest music company – The Post has learned.
Sources say Disney’s interest has not become serious, and there is just a small chance the company will wind up bidding for Vivendi’s assets.
The more likely bidders are those that have been most frequently mentioned: Liberty Media’s John Malone, Viacom, General Electric, MGM, and a group headed by billionaire oilman Marvin Davis.
The Vivendi assets – in particular the movie studio and cable channels – would be make a neat fit within the Disney empire.
“Of all the companies, Disney makes the most sense,” said one source close to the matter. “They don’t have a large film library, they don’t have a back lot, they don’t have a music company.”
A Disney spokesperson said: “We’ve had absolutely no conversations about buying any of the Vivendi assets. We believed these are rumors perpetuated by bankers to drive up the price.”
Disney has a relatively small film library – one that’s stocked with family-oriented titles, sources note.
While other bidders might reluctantly take Vivendi’s movie studio to get the valuable cable properties, the huge Universal film library – which includes such hits as “E.T.” and Eminem’s “8 Mile” – would fit well within Disney, sources contend.
The cable channels would also fit nicely with Disney’s television empire, which includes the ABC network, ABC Family and ESPN.
But Disney – whose stock is well off its historical highs, though up slightly this year – is in a bad position to do a deal because of its heavy debt load: close to $15 billion dollars. Uncertainty over the future of Disney Chairman and CEO Michael Eisner has hung over the company as well, as speculation has swirled that Disney’s board wants to replace him.
This weakened condition has irked some on Wall Street, who say Disney might have to miss out on a coming wave of consolidation in the media industry, a consolidation spurred in part by the expected relaxation of FCC media ownership rules.
During past industry consolidations, Disney was a serious player. It bought Capital Cities/ABC in 1995 for $19 billion.
But the entertainment company has been criticized for waiting to buy until asset prices have reached their peaks, says Oppenheimer analyst Peter Mirsky.
“We are concerned that Disney may fall behind, as the FCC appears to be on the verge of further relaxing ownership rules, and Viacom and Fox are able to spend,” Mirsky wrote in a recent research report.
He noted that during recent years, Disney “sat out on a wave of consolidation in the radio and cable networks, then paid a full price for [cable channel] ABC Family at the top of the market.”
Disney bought the channel in 2001 for $2.9 billion plus the assumption of $2.3 billion in debt.
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BIG POSSIBILITES
Walt Disney Co. may be dreaming of acquiring Vivendi’s USA Network, Sci-Fi Channel and Universal Pictures movie studio.