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The Survivor

Despite enduring four owners in a decade, Universal TV is in fine shape 5/16/2004 08:00:00 PM Eastern

Any company slammed by the perpetual tornado that has swirled around Universal Television should be in terrible shape. The cable network and TV studio operation has been flipped among four owners in the past decade. The last owner, Vivendi, was gripped by a financial scandal that led to the ouster of profligate CEO Jean Marie Messier.

Still, despite all the corporate mayhem, Vivendi Universal's TV operations now under NBC control are in surprisingly fine shape. USA Network just reclaimed the crown as No. 1 cable network. The once-sagging Sci Fi Channel is a top 10. Universal Television Productions is making serious money and just nailed a big payday from NBC's renewal of its cornerstone Law & Order franchise.

"Not too shabby given all we went through," says outgoing Universal Television Chairman Michael Jackson.

"It's nice that someone notices," adds David Goldhill, the now-ex president of the division.

NBC Entertainment President Jeff Zucker concurs that the Universal TV operation is "in great shape." Still, despite the unit's performance in his two years at the helm, Jackson was not even approached about a job in the new NBC Universal, and Goldhill was offered a short-term post but opted to exit.

When Jackson and Goldhill arrived at Universal, the TV operation generated $2 billion in sales and $500 million in operating cash flow. Last year, according to industry sources, sales increased to $2.5 billion, but profit zoomed to $830 million. "It's a little frustrating that NBC couldn't find a place for the guys who really succeeded against the odds," says one former Vivendi executive.

And what odds. No major media asset has been passed around like Universal Television: Owners include Matsushita Electric, Edgar Bronfman Jr.'s Seagram in 1996, and Barry Diller's Home Shopping Network until French utility Vivendi bought Seagram in 2001. When Jackson and Goldhill arrived, the two big challenges were in cable. USA's ratings had dropped 25%, and Sci Fi Channel floundered as a low-rated network skewing toward older men.

In an industry where executives obsess on niche audiences, Jackson, Goldhill, and their executive team actually moved to keep the networks broad. They believed that targeting a narrower demo would alienate the networks' audience and advertiser base.

As for Sci Fi, the prominence of off-net reruns—often many years old—delivered an aging, male audience. Under network chief Bonnie Hammer, the unit courted young viewers, not just Twilight Zone fans. A female audience was actively wooed.

Jackson and Goldhill pleaded for money for original programming at a time when Vivendi was feeling a financial crunch. But the company approved, spawning successful projects like USA's Monkand The Dead Zoneplus Sci Fi's Takenand Stargate SG-1.

Jackson and Goldhill agreed on one thing: an independent TV studio was at best a tricky business. Many years have passed since the company dominated prime time in the 1970s. Universal Television Productions had faded and abandoned the sitcom business.

The powerhouse remains the Law & Order franchise with Wolf Films. Under division chief David Kissinger, the unit focused on shows that would directly feed its cable networks or shows like American Dreams that could easily find a slot on USA.

Says Goldhill, "Making a huge investment in assets for other people's networks did not make sense to us."

Goldhill may be going, but that perspective will no doubt still be in operation with NBC in charge.

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