Vivendi Universal is struggling through a financial storm. Big loans are coming due. Assets are on the block. Who's running what isn't exactly clear. Blustery CEO Jean-Marie Messier got the ax. His successor is looking to stop the bleeding.
But deep inside the company, the TV unit is humming along under the guidance of a Briton who has been keeping a low profile. "It hasn't felt like a storm from where we sit," says Universal Television Group Chairman Michael Jackson in a rare interview in his Manhattan office. "Sometimes it feels like a comic opera. But we get on with our jobs and make progress."
Progress indeed. "Michael is doing a fine job in every area," says Jackson's boss, Vivendi Universal Entertainment Chairman Barry Diller. "USA is back, Sci Fi is achieving its highest ratings, and Universal Television has more projects on the air than ever before."
Diller is not overstating the case. USA Network revived its sinking fortunes with summer hits Monk
and Dead Zone. After the loss of pro wrestling and a string of original-programming flops, USA was deflated. Now, prime time ratings are up single digits. More importantly, USA has its image back, with advertisers and producers interested in doing business.
Lots to fix
And Sci Fi Channel is about to make one of the boldest moves yet by a basic-cable network. On Dec. 2, it will unroll a $35 million Steven Spielberg miniseries Taken
over 10 consecutive weeknights (two hours a night). The net's prime time ratings are at all-time highs, up 29% in October compared with the year before and up 13% in the third quarter.
"The product has improved. The sales organization has improved. The perception has improved," says Andrew Donchin, vice president and director of national broadcast at Carat North America.
Diller lured Jackson here from the UK, where he headed Channel Four, to run USA Entertainment. When Vivendi acquired USA Entertainment for $10 billion last May, Jackson took the helm of the newly created UTG. In addition to USA, Sci Fi and Universal Television, UTG operates domestic and international syndication units, the Sundance Channel and a brace of digital cable networks.
Universal Television, cobbled together from Vivendi's merger with Seagram and the subsequent acquisition of USA Entertainment, is a well-armed operation. It boasts television studios (Universal Network Television and Reveille), USA and Sci Fi cables nets, digital networks, a syndication operation, and an international distribution arm. And across the Universal lot, corporate cousin Universal Studios offers its vast library and the promise of new releases.
Simply put, Jackson says, "being part of something bigger has been great."
To make the point, he cites USA Network's hit drama Monk. It's produced by USA Cable Entertainment and is cable's highest-rated drama ever. Monk
is Universal's most successful international product in five years, and Jackson expects it to succeed in domestic syndication. "Monk
ticks all the boxes," he says.
Law & Order
spin-offs Special Victims Unit
and Criminal Intent
also touch multiple UTG bases. It is produced by Universal Network Television, and, after premiering on NBC, episodes are repurposed on USA Network.
Jackson says creative deals like these are the future, regardless of any pieces that come in or out of Universal Television due to the Vivendi troubles. "You have to think clever," he says. "Don't be traditional, be smart."
On the other hand, Jackson has some traditional ideas. For instance, he plans on using old and new Universal products to inspire cable programming. Baretta
may be dusted off for a new series on USA Network. Universal Studios' upcoming Hulk
movie could later be adapted for Sci Fi.
"It's invaluable to have library at your disposal," says Initiative Media's Senior Vice President of Research Stacey Lynn Koerner. "Otherwise, you're working from scratch all the time."
For now, Jackson's newness may be his biggest shortcoming. He has run Universal Television for only about a year now—not long enough for some in the TV industry. In that time, says UBS Warburg media analyst Chris Dixon, "he's been given an enormous amount of air cover with the tremendous amount of noise given to the Vivendi restructuring."
'Under the radar'
In the U.S. television industry, Jackson is still relatively unknown. "Diller is in the line of fire, and [USA Network President Doug] Herzog gets a lot of the credit," says one cable industry executive. "Jackson is under the radar."
In Britain, Jackson held a string of high-profile posts. Before Channel Four, he headed the BBC1 and also was controller of the BBC2. Recently, his name popped up for the top spot at Britain's ITV network.
Jackson says he's staying put at Universal. And, although American viewers don't always warm to British television, Jackson says they will like his product.
"The art of programming is understanding the brand and understanding the audience," he said. "Great television travels well."
Indeed, several shows he developed in Britain have been well-received stateside. At Channel Four, he developed Big Brother
and Queer as Folk
and, in his BBC days, worked on Trading Spaces.
There's no formula for hits, Jackson says. "You have to deliver on something that is genuinely dramatic, funny or watchable."
But Universal Television's future is in limbo. Vivendi is weighing options to sell or spin off the entertainment group.
One possibility, analysts say, could have minority investor Liberty Media taking a bigger stake and folding in some of its assets, like Starz Encore. Diller is certain to hold a major stake in any outcome.
Getting out from under Vivendi could make the business stronger. If Liberty partners its Starz Encore pay service with Universal Studio, USA Network and Sci Fi Channel, "it gives them all more clout, more power and more relationships," said Kaufman Bros. analyst Paul Kim.
Universal execs want to talk about the present, not the future, declining to discussing possible deals.
"Whether it's going to be consolidated [or] restructured, the components of that group—whatever they turn out to be—we're going to make that work," Jackson says.
Universal Studios President Ron Meyer is more pointed about options. "None of them are realities. We have to live with what we have and, at the moment, we're doing that quite well."
At Universal Television, Jackson runs a broad TV empire. The suffering syndication market and negotiation of carriage deals with cable operators are now his problems, too. And like any top executive, Jackson has had to learn how to survey and delegate.
USA chief Herzog, who met Jackson only once before he came to the U.S., says his boss was aptly advertised as a "hands-off guy. He dove in pretty deep when he first got here, but that turned out to be a fact-finding mission. Michael likes to take a 10,000-foot view."
Jackson sometimes surprises. He'll unexpectedly takes tapes home to screen and edit scripts. "He loves TV, and he loves the process," Herzog adds.
Before passing judgment, many are waiting to see Jackson pass two more benchmarks: his second cable upfront market and the next programming slate for USA Network and Sci Fi.
Continued success means we might hear and see more of Jackson. "My job is not to be in the papers every day," he says. "It's to do the job and talk about things when we have a story to tell."