Vivendi Writes Down Value Of NBC Universal Stake
Paris-based company is the latest to record fourth quarter loss
By Claire Atkinson -- Broadcasting & Cable, 3/2/2009 7:48:30 AM MT
Media company Vivendi announced Monday it would write down the value of its 20% stake in NBC Universal by Euro 1.5 billion ($1.89 billion) in the fourth quarter 2008.
The company which part owns NBC Universal alongside majority owner General Electric, recorded a net loss of Euro 1.38 billion ($1.75 billion) in the fourth quarter.
Vivendi which also owns Universal Music Group and Frances pay-TV operator Canal Plus, recorded full year revenue of Euro 25.4 billion ($32 billion) and net income of Euro 2.7 billion ($ 3.4 billion).
Vivendi's share of pro rated income from NBC Universal in 2008 was Euro 255 million ($321 million) down by Euro 46 million ($58 million). A company press release on Monday explained that the decrease was evenly split between the falling value of the euro against the dollar and a decrease in NBC Universals performance.
The company's CEO Jean Bernard Levy said he anticipated growth for 2009. Vivendi expects its earnings (EBITA) will show strong growth in 2009. The company has an annual option in December to sell its stake in NBC Universal back to General Electric.
Conditions are expected to remain tough for NBC Universals major stakeholder General Electric. Last Thursday, General Electric said it would cut its shareholder dividend for the first time since 1938. Some in the financial community believe the change could lead to a loss of the firms prized triple A credit rating. In January, General Electric reported that 2008 broadcast unit earnings were $400 million for the year while its cable unit reported earnings of $2.1 billion. General Electric is slated to report its first quarter 2009 on Friday, April 17.
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