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HOLD THE LINE Left, Jean-Marie Messier in his car, which was blocked by demonstrating employees, Paris, April 18, 2002. Above, Edgar Bronfman Jr. leaves the June 25, 2002, Vivendi board meeting in Paris. ENEMIES IN THE BOARDROOM Last spring, as C.E.O. Jean-Marie Messier cavorted in the spotlight, Vivendi Universal’s boardroom turned into a battleground. The furious, high-decibel opposition from his North American directors, led by Edgar Bronfman Jr., should have given Messier pause, but the quiet backstage machinations

of the French would prove far more lethal E R È I N I V U

BY VICKY WARD A M

A L

n June 25, the 15 directors in six months, during which time the stock on the board—Bronfman; his father, Edgar E D

of Vivendi Universal, the had plummeted nearly 70 percent. That senior; Samuel Minzberg, a lawyer represent- Y M É

world’s second-biggest me- afternoon, everyone knew, Edgar Bronf- ing Edgar senior’s brother, Charles; Marie- R

Y B

dia company after AOL man Jr., the suave, bearded Seagram heir, Josée Kravis, the wife of Kohlberg Kravis , T

Time Warner, gathered for whose family held the largest single block Roberts founding partner Henry Kravis; and H G I R

a pre-board-meeting lunch of Vivendi Universal shares, would call for Richard H. Brown, chairman of Electronic ; I in the company’s Paris head- a vote of confidence in Jean-Marie Messier, Data Systems—were set to lobby hard for R O M quarters, overlooking the Vivendi’s 45-year-old French chairman and Bronfman Jr.’s motion. After lunch Minz- S I

Arc de Triomphe. The room was buzzing, C.E.O. The two men had breakfasted to- berg approached the lone Englishman pres- O Ç N

since just that morning Bernard Arnault, gether hours before to discuss it, but Mes- ent, Simon Murray, the former C.E.O. of the A

O R F

the chairman of LVMH, the French luxury- sier had been unable to dissuade Bronf- book publisher Hutchinson and co-founder Y B

,

goods conglomerate, had resigned from the man from his course of action. of the Orange phone network. By all ac- T F E

board. It was the fourth such resignation At the meeting the five North Americans counts Murray appeared somewhat startled L

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as Minzberg clasped him tightly and, in a ropeans for, five North Americans against. among Messier’s biggest fans in the board- voice quavering with emotion, apologized Next up for discussion was a Goldman room, was apparently the key turncoat. for having yelled “Fuck you” at him twice Sachs report that Edgar Bronfman Jr. had Lachmann and another French board during a heated exchange at a board meet- commissioned after the previous board member, Jacques Friedmann, had gone to ing in May. “Will you vote with us?” Minz- meeting, on May 29. It concluded that see Messier and told him that the French berg asked. Murray said he’d listen to the Vivendi would be in serious financial banks were threatening to refuse further presentations and decide. trouble if it could not sell off a number credit lines to the company if Messier During the previous few months Minz- of assets, such as a portion of Vivendi En- stayed. When Simon Murray heard this, he berg, whom a fellow board member de- vironnement or Telepiu, the Italian pay-TV resigned as well. scribes as “ordinarily rather quiet,” had business, or if the ratings agencies down- been growing increasingly belligerent as the graded Vivendi’s debt again. hat hot Sunday night in Paris, Messier “Goldman Sachs sound- sat stunned in his office with his chief ed alarmist,” says one T financial officer, Guillaume Hannezo, board member, “but it was and two Lazard Frères bankers. “He was MESSIER’S DISCOURTEOUS remarking on the obvious. like a guy in the boxing ring,” says a per- No one disagreed with it.” son who was there. “I’ve never seen him BEHAVIOR MAY HAVE SERVED TO Then Bronfman Jr. like this. He always smiles, he always talks. raised the question of That night he was not talking or smiling. . . . HARDEN BRONFMAN’S PROFESSIONAL confidence in the C.E.O. It was as if he’d been hit by a bus.” He used a phrase, “the Why did his French colleagues turn so DOUBTS INTO A PERSONAL DISLIKE. Messier discount,” claim- suddenly on Messier, who in just five years ing it was the presence of had transformed Vivendi from a stodgy [ utility company into an interna- stock declined. He started send- tional colossus? He had been ing daily “insulting” E-mails hailed as the savior of modern to Messier, says a source. The French capitalism, a mold board member recalls, “Minz- breaker, an expansionist of berg sounded like one of those Napoleonic proportions. He was lawyers in the courts who spoken of in the same breath screams at everybody. . . . They with News Corporation mogul [the North American board Rupert Murdoch, with whom members] went into overdrive he was obsessively competitive. with Minzberg leading the But whereas Murdoch started charge and Edgar being charm- with a family fortune and spent ing and trying to pretend that a lifetime building his empire, Minzberg was some wild boar Messier, with no family mon- out of control.” ey, rose to the top in less than “They turned it into a person- a decade. After he moved to al vendetta,” says one of the Eu- America last September, his re- MASTER OF THE WORLD ropean board members of the North Amer- Jean-Marie Messier at Universal nown became international. He was the icans’ attempt to oust Messier. Board meet- Studios in Los Angeles in June 2001, C.E.O. of the moment—sought after for ings grew increasingly hostile, with people a year after he acquired it. press interviews, museum boards, speak- shouting at one another. However, Mes- ing engagements. Part of that, it’s true, sier was not worried—he knew he still had was Messier’s doing. He loved publicity, the support of the eight Frenchmen on the C.E.O. that was driving the share never seemed happier than when he was the board and the French banks. price down. Serge Tchuruk, the C.E.O. of sharing the stage with the rock stars his Alcatel, a French telecommunications com- company represented. irst up for discussion at the June 25 pany with a stock performance nearly as But all that was over in a single weekend. board meeting was the appointment bad as Vivendi’s, and Simon Murray ar- F of a new board member, Dominique gued that Messier should stay. Murray n France, Messier’s failure is consid- Hoenn, the chief operating officer of BNP speculated that removing Messier would ered a national disaster. “He was going Paribas, a major French bank. Messier ar- create instability and hurt the share price Ito help the French economy move to- gued that his appointment would quell the further. Bronfman’s motion was voted wards a globalized world. . . . In that sense critics who were arguing that Vivendi Uni- down. The North Americans were with the French business establishment and also versal was facing a cash-flow crisis. But him, the Europeans against. to some extent the political establishment Minzberg at first refused to vote, stating that The meeting was adjourned. Messier had a stake in his succeeding. . . . He was Hoenn had not been approved by Vivendi’s felt sufficiently optimistic to tell analysts on the poster boy for all that stuff,” says La human-resources committee. Messier retort- a conference call that he would be happy Tribune’s New York correspondent Thierry ed that the human-resources-committee to remain C.E.O. for the next 15 years. Arnaud. “Which makes the fact that he chairman, Edgar Bronfman Sr., had been That weekend, while on business in Ja- failed all the more painful.” S

unavailable the previous day, when the mo- pan, Murray got a phone call from Edgar In truth, the summer was a mean sea- E M

tion had been put before it. “Clearly, Mes- Bronfman Jr.: Messier was resigning. The son for media-company executives of all H C A

sier thought the inability of the board to French directors had suddenly—and inex- stripes, who seemed to collapse like domi- H C S meet was deliberate,” says a board member. plicably—changed their minds. noes. “Did you notice Koogle, Levin, Mes- D R

A vote took place at Messier’s insis- Henri Lachmann, the chairman and sier, Pittman, Middelhoff left. . . . There A R É

tence, and Hoenn was voted in: 10 Eu- C.E.O. of Schneider Electric, who had been may be something C O N T I N U E D O N P A G E 2 0 5 G

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C O N T I N U E D F R O M P A G E 19 8 happening in a party that got written up in all the gos- New York City (Anne-Laure remained in the media industry—no?” Messier asked sip columns. “He was only 34,” says the France), he spent $10.3 billion to buy USA V.F., referring to the sudden departures French writer Nazanine Ravai. “All the ya- Networks, run by Barry Diller, 43 percent of Yahoo’s Tim Koogle, Time Warner’s ya people were there.” The guests includ- of which was already owned by Vivendi. Gerald M. Levin, AOL’s Bob Pittman, ed Cabinet members as well as colleagues Diller, who had once run the Paramount and Bertelsmann’s Thomas Middelhoff. from Lazard Frères. and Fox movie studios, was an executive But Messier’s professional demise re- In November 1994, Messier left to work revered by Wall Street. It was thought he mains the most startling because it hap- for one of his clients, Guy Dejouany, the would never again work for anybody. But pened with such extraordinary sudden- 75-year-old head of Compagnie Générale now he was working for Messier. ness. “Other C.E.O.’s survive when their des Eaux, the giant 150-year-old water In one year Messier had spent $50 share price is low,” says a former col- company that also owned Canal Plus, billion. He promised investors that 2002 league of Messier’s, adding, “but that’s Europe’s leading pay-TV station. In 1996, would be the year of consolidation. because they are either owners or they at only 39, Messier took over from De- Messier’s strategy was not just one of have friends.” jouany. He renamed Messier, it seems, has few friends. the company Viven- “Messier thinks there was a conspira- di and made it plain cy,” says a close friend. “He blames three that his ambitions “HE BLAMES THREE THINGS things for his downfall: [French president] had to do more with Jacques Chirac, Claude Bébéar [the chair- the Canal Plus part FOR HIS DOWNFALL: PRESIDENT man of the French insurance monolith of the company than JACQUES CHIRAC, BUSINESSMAN CLAUDE AXA, who would join the Vivendi board the sewers and pu- after Messier’s resignation], and the Bronf- rification plants. He BÉBÉAR, AND THE BRONFMANS.” man family,” says a source. (When asked bought the Havas about this, Messier says, “No comment,” media group; 44 per- [ but claims he harbors no “paranoia.”) cent of Cegetel, which controls SFR, one senseless acquisition. He had a genuine Right after he stepped down, Messier told of the leading mobile-phone operators in interest in bridging the gaps among cul- the newspaper Le Point that “the lobbies” France; as well as 24 percent of BSkyB, tures. Michael Jackson, the chairman of had moved against him—in particular, he Rupert Murdoch’s satellite-television com- Universal’s entertainment units, recalls believes that the French business elite, pany. He also joined forces with Vodafone, how Messier liked to show his employees many of whom are Freemasons, were re- the mobile-phone company, to start an In- a video of Khaled, an Algerian singer, and sponsible. His closest allies don’t disagree, ternet portal known as Vizzavi, which he Noa, an Israeli, performing John Lennon’s but they think that’s not the whole story. intended would become his main means “Imagine” together at the World Econom- “Il a creusé sa propre tombe,” says one, which of content distribution. ic Forum in New York in January. “Every translates as: “He dug his own grave.” time, he was in tears by the time the tape hen he turned his attention to Ameri- was finished,” says Jackson. “There was ntil November 2001 “the little ca. In June 2000, in what was a clear something romantic about him. . . . You Frenchy,” as Messier once referred T attempt to echo the AOL Time War- know, that badge he wore with the Tricol- Uto himself (he is only five feet seven ner merger, he acquired Seagram, the or and the Stars and Stripes on it.” inches tall), seemed to possess a gift for liquor company founded by the Bronfman That was partly why at the World Eco- empire building. In France, everyone knew family, by giving the Bronfmans $34 bil- nomic Forum he was hailed as a hero by his tale: Messier, the son of an accountant lion worth of Vivendi stock. (In 1995, under celebrities and business leaders alike as he in Grenoble, attended all the right schools the stewardship of Edgar Bronfman Jr., staged a concert with, among others, Bono, and married his childhood sweetheart, An- Seagram had acquired Universal Studios Quincy Jones, Peter Gabriel, and India toinette. Working in the French finance and MCA, which became the Universal Arie. The overarching message was unity, ministry under Edouard Balladur, he pri- Music Group, the largest music company but the event undeniably served to put vatized many state-run businesses; then he in the world. These were the assets Mes- him in the headlines as one of the event’s entered the private sector as one of the sier had coveted.) The new, merged com- main attractions, on a par with Bill Gates. youngest partners ever at Lazard Frères, pany was rechristened Vivendi Universal, the French investment bank. There, he and, as a group, the Bronfmans became any who worked with Messier say shone: “He’s the one guy I’ve met in my its largest shareholder. Bronfman Jr. be- that his other driving force is a love career that you would say of, ‘Even if I’m came C.O.O. of the new company, with Mof publicity with perhaps a touch lucky, even if I work hard, I’m not playing direct responsibility for the music group. of megalomania. Though he signs himself in the same league,’” says a former col- That deal had barely closed when Mes- “J2M” in E-mails, he sometimes goes by league. sier invested $372 million in MP3.com, “J6M,” short for Jean-Marie Messier, Messier worked so hard he acquired the music Web site, then $1.2 billion in Moi-Même, Maître du Monde (Jean-Marie the nickname Robocop. Because of the Elektrim, a Polish telecom company; this Messier Myself, Master of the World)— large number of lucrative deals he brought was followed by $2.2 billion for 35 per- which was from the immodest title of in, his superiors forgave him idiosyncratic cent of Maroc Telecom, then $2.2 billion his 2000 autobiography, j6m.com. Col- work practices, such as not returning for the American book publisher Hough- leagues complained that he accepted far E-mails—even to Michel David-Weill, the ton Mifflin. Then he invested $1.5 billion too many speaking engagements and that head of the firm. in the American satellite-television com- he was indiscriminate with press appear- Messier was making a name for him- pany EchoStar Communications Corpo- ances. Rupert Murdoch recently described self outside the company as well. He be- ration. In November 2001, shortly after Messier to the Financial Times as “never came the equivalent of a boldfaced name he’d moved himself, his wife, and four having met a journalist he didn’t give an in- in a country that doesn’t really have them. of his five children—Claire-Marie, Jean- terview to.” Messier was featured in Paris For his 10th wedding anniversary he held Baptiste, and twins Nicolas and Pierre—to Match three times in 18 months. Last

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year at Herb Allen’s annual power summit Plus provided a major European distribu- port Messier had made him Vivendi’s joint of moguls in Sun Valley, Idaho, Messier tion arm for Universal’s content. Though he chief operating officer, with responsibility rented a cabin in which to hold meetings knew Messier had a burgeoning reputation for the American entertainment assets as with the likes of Liberty Media chairman for egocentricity, Bronfman wasn’t worried— well as Canal Plus. John Malone, Murdoch, Disney’s Michael as others were—that Messier’s track rec- Given Canal Plus’s losses, Bronfman Eisner, and Comcast’s Brian Roberts. “It ord did not qualify him to run the world’s thought the appointment was a mistake. He was like a royal receiving line,” says a for- second-biggest media company. Within less had hoped that Messier would replace Les- mer colleague. than a year the two had hammered out cure without dishonoring him. He thought “[We told him], ‘Stop and let the news the deal for Vivendi to buy Seagram. it nonsensical that senior executives at Uni- of the company be the platforms for your When Messier presented the deal to his versal Studios were effectively having to re- visibility when we have an acquisition, [or] board, he was the hero of the hour. Even port to Canal Plus in Paris. “We didn’t ex- when we have a dispersal . . . because we’re Jacques Chirac, who reportedly didn’t like ecute the merger,” says Bronfman, mean- Messier and is said to have ing that the potential of the merger was previously refused social never realized. Even Messier himself says, invitations from him, of- “Pierre never really took his marks.” WHEN ASKED IF HE WISHES fered his congratulations. Chaos was evident behind the scenes Henri Lachmann, on the during preparation for the first presentation HE’D HANDLED LESCURE’S Vivendi board, was par- of the merger to Wall Street. “I’ve never ticularly effusive, send- seen such a helter-skelter lack of direction FIRING DIFFERENTLY, MESSIER REPLIES, ing Messier congratulato- in my life,” says one member of the com- ry notes, says one banker munications team, who points out that the “YES, MUCH EARLIER.” employed by Vivendi. “He share price dropped “like a rock” after [ regulators approved the merger. too visible, and we don’t have the “It was obvious that, for all our components that justify it,’” says panache, folks [i.e., analysts] one former member of the Viven- were out there saying, ‘I don’t di communications team. “But get this.’” Jean-Marie has this habit of lis- In London during one road tening to you intently and then show promoting Vivendi’s pur- doing completely the opposite.” chase of Seagram, Bronfman Jr. told the audience that the hen Edgar Bronfman best thing about owning an en- Jr. first met Messier, in tertainment company was sell- W Paris in October 1999, ing it! “It was clearly a slip of three months before the AOL the tongue, but Messier looked Time Warner merger was an- thunderstruck,” says one inves- nounced, there was no agenda. tor who was present. On another The soft-spoken, elegantly occasion Messier started quoting dressed Bronfman had request- Celine Dion, only to be gently re- ed the meeting, mainly out of curiosity, CRASH LANDING minded by Bronfman that Dion is not on Pierre Lescure with Messier, June 2001. although in the back of his mind, he says, Messier had made him head of Universal’s roster of artists. he was wondering how to take Seagram to Vivendi’s television and film divisions, even “It was actually visible he [Messier] the next level. though he had lost money for four didn’t like that Edgar was too present,” says “We were going to sell Seagram at some consecutive years at Canal Plus. a former member of the communications point, because my father has seven children team. “Yet it was only logical. He [Bronf- and 22 grandchildren. And we don’t have man] was there to say, ‘It’s my money,’ but any special voting rights,” says Bronfman was the Messier fan club,” says the banker. Jean-Marie, he loves . . . to hear his own Jr., sitting in a conference room in the Lever “The only thing he would do every time voice. He’s like a child.” House building, situated opposite Vivendi’s we went to them [the board] with a trans- headquarters in the Seagram Building, on action was to say, ‘I’ve got nothing to say. essier’s dislike of sharing a platform Park Avenue in Manhattan. What he means Jean-Marie’s a genius, and everything he with Bronfman became more and is, as the generations passed, the family’s does or will do I will always support.’” Mmore obvious. At executive-board control of the company would dissipate be- Messier also had the crucial support of meetings Messier had a habit of calling cause their ownership rights were no differ- 57-year-old Canal Plus C.E.O. Pierre Les- on Bronfman when there was only a short ent from any other shareholder’s. cure, a glamorous former TV anchor, who time left. “Oh, we have to talk about mu- Though it was an unlikely pairing—the is widely loved by the entertainment in- sic,” he would say. “Can you do that in five tall, calm Bronfman is languidly patrician, dustry in both France and America. A minutes, Edgar?” and the diminutive Messier blusteringly in- habitué of Studio 54 in the 1970s and a But there was also a more dangerous tense—the two hit it off so well that break- former boyfriend of Catherine Deneuve’s, aspect to Messier’s love of public perfor- fast lasted well over an hour and a half. he helped found Canal Plus 18 years ago. mance: he got himself into trouble by pre- S

“When you meet Jean-Marie, he is a com- In 1994, after his partner André Rousselet maturely announcing deals. At a meeting in E M

pelling person,” says someone close to resigned, he assumed the role of C.E.O. Orlando, Florida, Messier, wearing a T-shirt H C A

Bronfman. “I call him Clintonesque in with dismal financial results. The once prof- emblazoned with “No. 1,” blithely told an H C S that sense.” itable company began hemorrhaging mon- audience of the company’s top 300 execu- D R

Messier’s international vision had ap- ey, posting a loss of more than $400 mil- tives that he was buying Houghton Mifflin A R É

peal for Bronfman, who figured that Canal lion for last year. But to win Lescure’s sup- for $2.2 billion. Pandemonium struck. “The G

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lawyers went batshit,” says one of the exec- Messier’s hotel, the Beverly Hilton. When Though at one point the two men had utives, who had to scramble back to New told of the location, Messier booked a suite been sufficiently close for Bronfman to York and set up press conferences before at the Bel-Air himself and insisted the meet- consider making Diller his child’s godfa- the market opened the following day. ing take place there. In the end he arrived ther, they had subsequently fallen out Messier believed that the announcement late, and the group, which included Uni- when Bronfman helped thwart Diller’s am- involved merely “a question of confidence versal Studios president and C.O.O. Ron bition to buy NBC. Vivendi insiders claim and trust with your main managers,” as he Meyer and DreamWorks co-principal Jef- that right from the start Bronfman told puts it. frey Katzenberg, had assembled in the Messier that he did not want Diller run- Increasingly, Bronfman felt there was restaurant. ning his company. (Bronfman and Mes- little or no logic behind Messier’s continu- In March 2001, Bronfman was asked sier say this is not so; Bronfman points ing acquisitions. He could barely conceal by Messier to attend the opening of Vi- out that two years before the USA Net- his dismay when Messier announced that vendi’s theme park in Osaka, Japan. The works deal he, Diller, and Gordon Craw- he was buying the 35 percent stake in Maroc theme park had been an idea formulated, ford, a director of the Capital Group, a Telecom for almost $2.1 billion. In private, funded, and executed by Bronfman before leading institutional investor, had gotten Bronfman told Messier he thought that it the merger, but when he looked at the itin- together to see whether they could figure erary he saw there was out a way to work more synergistically. no role for him. He “There’s always ups and downs with Bar- ended up not going. ry,” says Bronfman, “but I’ve known him “MESSIER WAS LIKE A GUY The final break- for 30 years. I haven’t known Messier for down with Bronfman 30 months.”) IN THE BOXING RING. . . . HE WAS NOT occurred in December To Bronfman’s way of thinking, there of 2001 when he re- was no rush to purchase USA, since Vi- TALKING OR SMILING. IT WAS AS IF signed from his posi- vendi already owned 43 percent of it and tion as executive vice- would be given first dibs on the rest if HE’D BEEN HIT BY A BUS.” chairman—he claims he Diller ever wanted to sell. There was also had always planned to the sobering fact that Bronfman would be [ buying back a company at was a nonsensical deal, that two and a half times the price it sent the wrong signal to he had sold it for four years the market. “All of Asia is before. “There was this great opening up, and we’re going myth out there [that] Barry into North Africa!” an exec- was really clever,” says one utive close to Bronfman says. Vivendi employee, but the re- Messier’s relationship with ality was “Barry got really Bronfman continued to de- lucky.” To Jean-Marie Mes- cline. A former Vivendi em- sier, who was eager to win ployee says Messier planned over the Hollywood estab- all along to cut Bronfman lishment at apparently almost loose from his executive ca- any price, the deal was evi- pacity, playing him and Les- dently worth it. “He imagines cure against each other. At that one day he will be at the any rate, his discourteous be- same level as Murdoch,” says havior toward Bronfman may OFF WITH HIS HEAD another former employee. have served to harden professional doubts Demonstrators outside Canal Plus’s into a personal dislike. Paris headquarters protest Messier’s dismissal ccording to an insider, the biggest of Pierre Lescure, April 17, 2002. price that Messier paid in terms of fter relocating to New York, Mes- A the deal with Diller was that Edgar sier tried to move a Bronfman-family Bronfman Jr. became more active in the A Rothko, hanging in a reception area find something else to do. In June he an- boardroom. on the fifth floor of the Seagram Build- nounced that he was buying 40 percent of Bronfman says it was not the Diller ing, into the $17.5 million Park Avenue Asprey and Garrard, the British jewelers deal so much as two others that happened apartment he’d rented from the company, and silversmiths, and assuming the posi- around the same time that led the entire until someone told him this was simply tion of co-chairman. North American contingent on the board unacceptable. So he brought it into his to voice their extreme unhappiness with office instead. An executive recalls how ut it was hard to see it as mere coin- the C.E.O. First, in December, without the he sent an assistant marching into Bronf- cidence that on December 17, less than approval of the board, Messier spent $1.5 man’s office to discuss where other pieces B two weeks after the resignation, Mes- billion for 10 percent of EchoStar, which of Bronfman art could be moved to. sier announced what he no doubt saw as Murdoch had previously tried to buy and (When asked about this, Messier replies, his pièce de résistance: the $10.3 billion failed. “What was the rush?” Bronfman and “[That is a] crazy question. I had no time merger with Barry Diller’s USA Networks, the others asked. It wasn’t as if EchoStar for that.”) and the hiring of Diller as chairman and was going to turn down the option of dis-

In June 2001, Steven Spielberg asked C.E.O. of Vivendi Universal Entertain- tributing Universal’s movies on its televi- G R E

Bronfman for an introduction to Messier. ment. Bronfman had sold Diller the USA sion stations. Many thought that Messier B R E

Bronfman set it up in his suite at the Hotel and SciFi cable networks and Universal’s had done the deal simply to spite Murdoch. F E F

Bel-Air because he felt it was more conve- television-production division in 1997, with (Messier says the deal was “approved unan- C I R

niently situated for the film director than Bronfman keeping 43 percent of the stock. imously during a board meeting in Novem- E

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ber subject to finalization and review of small assets to try to shore up liquidity, he issued an ultimatum to Canal Plus documentation.”) Messier continued to spend money on C.O.O. Denis Olivennes and Pierre Lescure, Then, after having announced in Novem- what many considered superfluities. In who had been pushed from his perch atop ber to the market that he would cancel 33 February, during the Winter Olympics, Vivendi’s television and film division when million treasury shares, in January Messier he’d held a company retreat in Salt Lake Diller assumed the chairmanship (Lescure instead dumped 55 million Vivendi shares City. “He paid to have Bill Clinton ad- claims not to have minded—he and Diller on Goldman Sachs and Deutsche Bank in dress him. . . . I don’t want to know what go way back, he says): they had two years to a “bought deal,” meaning they would be that cost,” one employee grumbled. Then, turn Canal Plus around or else . . . Lescure stuck with the stock if they couldn’t sell it. in March, he held a meeting in Deauville, and Olivennes were totally unprepared for With AOL Time Warner’s earnings warn- France, where senior executives spear- this front-page admonition. Messier E-mailed ing, issued later that same day, the market headed groups ordered to come up with Lescure that he was sorry for the headline, was worried, and, in fact, the banks could new strategies. Many not unload almost one-third of the shares. thought that no original Vivendi’s stock in turn dropped 24 percent ideas had been forth- by the end of January. The North Ameri- coming. Michael Jack- AFTER MESSIER SURVIVED cans on the board were furious. “No C.E.O. son told colleagues that is obliged to lie to the market,” says Bronf- “people came away from THE JUNE 25 BOARD MEETING, man of Messier’s flip-flop. “You say, ‘We that, unfortunately, feel- haven’t decided’ or ‘We might’ or ‘We have ing worse about the or- HE KNEW THERE WAS A REPLACEMENT several alternatives.’” (Messier says, “Every- ganization they work for, thing was rightly stated and disclosed at that it was chaotic. . . . WAITING IN THE WINGS. the right time.”) [ The situation got worse. In but he did not apologize for the March, amid calls from analysts crudeness of letting him know and investors for greater “trans- his job was on the line through parency” with regard to account- the media. ing methods, Vivendi took a “The way he handled this goodwill write-down of $13.6 showed chronic misjudgment,” billion, the biggest loss in French says a member of the board. corporate history; this was an ac- “He already had problems with knowledgment that it had over- the U.S. contingent—why did paid egregiously on its acquisi- he go out of his way to alien- tion binge. By the end of April ate the French too?” the stock was down 43 percent from the start of the year. essier had started his French problem with a urthermore, the North Amer- Mthrowaway comment at ican board members were the USA Networks merger an- appalled to discern from the annual re- NEW KID ON THE BLOCK nouncement in December that the French F Jean-René Fourtou, a former port that the company stood to lose up to pharmaceutical-company executive, on “cultural exception”—the large slice of $770 million in an options deal that Mes- July 3, 2002, after he succeeded Messier. funding that the government gives each sier negotiated when the stock was much Later in the summer, Fourtou received regular year to the French film industry—was higher. “If you read the notes, you saw it, correspondence from Messier. dead. Some people thought he meant but [with something like this] you expect that the Canal Plus part of the exception— the C.E.O. to come forth and say, ‘We’ve the company is required to commit 20 per- made a huge mistake,’” says one board Although what did come over was just cent of its revenue to the production of member. (Messier says it was “normally dis- how impressive the group of assets were.” French films—would be terminated. Chirac closed as recommended by . . . auditors.”) Adding to the directors’ irritation was and the French entertainment industry But the North American board mem- Messier’s seemingly never-ending love were alarmed. Messier says now that he bers felt that their complaints were falling affair with the media. In February he gave doesn’t regret the comment, because it on deaf ears. When the French did not un- an interview to Paris Match, for which was intended “entirely around cultural di- derstand something, they either broke into he was photographed ice-skating in Cen- versity.” Why did he say it? Those who side conversations in their own language tral Park. “It was a two-hour shoot, when were at the meeting thought that Mes- (which some of the North American mem- he should have been attending to business,” sier had “looked like he couldn’t quite be- bers could not understand) or said nothing says one former Vivendi staffer. “Jean- lieve he’d hired Diller,” and had simply at all. Marc Viénot, who heads the audit Marie hates skating, because he had an gotten carried away. committee, once told Bronfman Jr. he was accident when he was a child. The whole Lescure felt that the La Tribune arti- “overreacting” about the company’s cash thing was so contrived. It made him look cle deserved a direct response, since one situation, according to a board member; at like he was giving the finger to France.” of the main reasons for Canal Plus’s losses a board meeting earlier in the year, another At least one major French institutional was Telepiu, the money-losing Italian pay- of the North American members noticed shareholder rang up journalists at La Tri- TV company. Messier initially refused to H

C the French “joking” throughout a presen- bune and told them he’d been so sickened relinquish it, some thought, because Mur- A U

O tation. “Can’t we discuss serious things by the Paris Match story that he sold every doch wanted it and would gain a mo- D E

F rather than numbers all the time?” one of Vivendi share. nopoly in Italy if he got it.

I D

H the French board members asked. In March, Messier gave yet another in- Lescure and Olivennes sent out an E-mail E

M Meanwhile, though he did sell some terview, this time to La Tribune, in which to all Canal Plus employees saying that they

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should not be disheartened; certain finan- French economy. Neither he nor Jacques ers, in order to avoid $350 million in taxes cial indicators were up. Messier saw this Chirac, a friend, wanted to see any of in France. Bronfman says he asked him as a flagrant breach of his authority. He Vivendi’s key assets in foreign hands. outright if there was a cash shortage, and told the staff at the Deauville retreat that Bébéar quietly started to lobby each of was told no. So Bronfman said that, if he what Lescure had done was “totally inap- the French board members to consider deferred, it would send terrible signals to propriate.” finding a replacement for Messier. In the market. Olivennes resigned soon after in pro- May, Vivendi’s share price fell further, and “Essentially,” says one board member, test, and on April 16, Messier fired Les- Bébéar turned up the heat. At the end of “Messier had his back against the wall— cure. The reaction in France was electric, a radio interview, he said that Vivendi had and he wouldn’t tell us the truth: that he serving to emphasize Messier’s political a “strategy and a decision problem.” was running out of money.” isolation. There were demonstrations in That brief statement was as lethal as a guillotine. “Basically, Mes- n June 17, Messier announced that sier was toast from then on,” he would be selling a stake of a lit- says a French investment O tle over 15 percent in Vivendi Envi- banker. But Messier contin- ronnement (the original, water-company “NO ONE MENTIONED ued to fight. He assured Bronf- assets)—in direct contradiction to what MESSIER,” SAYS A CONFERENCE man that Bébéar was going to he’d said a month earlier. retract what he’d said. The re- In an indication of how desperate Vi- PARTICIPANT. “A FRENCHMAN’S traction never came. vendi’s need for cash had become, it To raise cash, Messier ne- emerged on June 21 that Deutsche Bank NOT THERE—SO WHAT?” gotiated to sell Vivendi’s stakes had already received almost 13 percent in BSkyB and Telepiu. At the of Vivendi Environnement as security [ for a $1.48 billion short-term the streets; Lescure supporters loan. It was hard to escape the stormed Canal Plus’s television conclusion that Messier had studios and disrupted live shows. been hastily attempting to jus- Now, when asked if he wishes tify something he had already he’d handled Lescure’s firing been forced to do. The market differently, Messier says, “Yes, feared the worst. much earlier.” Bernard Arnault was furious: since April he had been asking espite the hubbub, it is to see financial documents and possible that Vivendi’s had been turned down. Some- D French board members one close to him says that this might never have been stirred was the last straw—on June 25 to rid themselves of Messier he quit. (Messier points out had not the firing of Lescure that in the previous few months wakened a sleeping giant in the Arnault had often been absent form of the venerable French CRY, THE BELOVED COMPANY from board meetings.) Mur- businessman Claude Bébéar, who decided Messier weeps as he leaves Vivendi doch turned the situation to his advantage that urgent intervention was needed. headquarters in Paris, July 2, 2002. In a and it was leaked that he was going to Bébéar, 67, a passionate lion-hunter company-wide E-mail he said he renegotiate his deal for buying Telepiu had run out of time, but a board member renowned for keeping rifles in his office, is from Vivendi. says, “He ran out of money.” the “godfather” of French business; the chairman of AXA, he is considered, along fter Messier survived the June 25 with Gucci owner François Pinault and eight-hour board meeting on May 29 he board meeting, he says, he knew Arnault, one of the nation’s greatest en- took up Bronfman’s initiative to let the A that Claude Bébéar had a replace- trepreneurs. “He is from the old, serious board form its own corporate-governance ment for him waiting in the wings: Jean- school,” says Nazanine Ravai, “the school committee in an attempt to show the mar- René Fourtou, the retired C.E.O. of the that frowned on Messier as an upstart who ket he was creating greater transparency. pharmaceutical company Rhône-Poulenc. came too fast too soon. Bébéar took years This only caused his French detractors to Very few people know exactly what pres- to build his business.” give him a new nickname: J.P.L.M.—Juste sures were exerted to get the French As a founder of the prestigious club pour le Moment. board members to change their minds. Entreprise et Cité, whose members include If anything, Messier’s precariousness Almost certainly Bébéar, who has Friedmann, Lachmann, and Arnault, to seemed to spur his defiance. When Le known both Marie-Josée Kravis and name a few, he has an octopus-like reach Monde journalist Martine Orange wrote Charles Bronfman for many years, had into French political and business spheres. that there were whispers suggesting Vi- formed a secret alliance with the North When Bébéar set out to take over Fried- vendi had liquidity problems, she says Americans. In the preceding few weeks, mann’s insurance company, UAP, accord- Messier called the paper and demanded Minzberg had paid several visits to ing to a French investment banker who to have her fired. They refused, so Mes- Bébéar. Some speculate Messier’s sale knows both men, Bébéar told him, “Here sier pulled Vivendi’s ads. Messier says this of a stake in Vivendi Environnement N

is my offer, and you have three days to ac- anecdote is “a galéjade—it’s ridiculous and alarmed the French business right, which O N I

cept it or I crush you.” false.” Yet Orange stands by the story. has a heavy concentration of Freema- R B

S

In April, Bébéar let it be known that Meanwhile, an insider claims Messier sons. A source close to Messier says, E U

he was worried that Vivendi’s plight asked Bronfman about deferring dividends “My feeling is a lot of money flows to Q C A

might have wider repercussions for the that were owed to the Vivendi sharehold- politics and the Freemasons, and that they J

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feared a sale of Vivendi Environnement could stop the flow.” Whatever happened, it worked. Once it was set in motion, the machinery of the old-boy network worked quickly. Lachmann and Jacques Friedmann re- portedly went to see the two bank presidents who were extend- ing credit to Vivendi—Michel Pébereau, the chairman and C.E.O. of BNP Paribas, and Daniel Bouton, the chairman and C.E.O. of Société Générale, both members of Bébéar’s busi- ness club. A few hours later both bankers allegedly told Messier that they would not extend him credit lines—unless there was a change of management. Then Lachmann and Friedmann—“two exceptional men,” sneers one of Messier’s confidants—went to see Messier and told him that he would lose if there was a vote of confidence. Messier played the only card he had left—one which has ex- posed him to charges of gross hypocrisy. According to French bylaws, only the chairman has the right to call board meetings within 60 days of the previous one. Messier told the board that if it did not come up with a suitable severance package he would defer the board meeting—required to elect Fourtou—for 60 days, by which time the company would be bankrupt. This from the man who in his memoir had criticized Philippe Jaffré, the president of Elf Aquitane, the French oil company, for taking a golden handshake of almost $19 million. Messier had vowed in his autobiography never to do the same. When the news broke that he’d been promised around $18 million, TV an- chors around the country opened the evening news quoting from the relevant passage.

essier cried as he exited the Vivendi building in Paris on July 2, after having sent an emotional company-wide ME-mail that said he had run out of time. His board didn’t see it quite that way. “He didn’t run out of time, he ran out of money,” says one member. A confidant of Messier’s says now that Bébéar, Fourtou, and Lachmann, three key players in Messier’s undoing, rotate in using Messier’s old office: “They’re all semi-retired, they take turns . . . because there are weekends and hunting parties and golf courses to play. . . . They’re like little boys playing Monopoly.” Bébéar has joined the board, as has Gerard Kleisterlee, the president and C.E.O. of Royal Philips, the Dutch electronics company. Bronfman says he thinks the new C.E.O. is “honest” and “strong.” Even so the stock price continued to tumble, hit- ting an all-time low of $9.76 on August 16, amid grave reports that the company was dangerously close to bankruptcy. An unexpected by-product of Messier’s fall was that it has reunited Barry Diller and Bronfman. The two men flew togeth- er from New York to Paris for the board meeting at the end of July. Afterward, Diller made a press statement praising Bronfman as “one of the unreported heroes of this process . . . who, potentially, has not slept for a month while he has worked to stabilize [Vivendi] financially.” In August, according to a former Vivendi employee, Bronfman offered to buy 10 per- cent of Vivendi Universal’s entertainment assets, with the right of first refusal on the rest. The French board members turned him down. The Bronfmans deny this. Messier, a source says, feels that the new friendship is purely opportunistic on Dil- ler’s part. And despite having lost over $4 billion, thanks to his invest- ment in Vivendi, Bronfman does not seem to have lost the re- spect of his peers. Viacom chairman Sumner Redstone reported- ly called him just before the Herb Allen Sun Valley conference and said, “Don’t let these guys get you down. . . . You’ve got value you can recapture here.”

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fter his fall, Messier went on vacation to Colorado and then Montana. For the first time in years, he did not attend A France’s elite annual Aix-en-Provence music festival—a venue which is de rigueur for all “classy French businessmen,” according to Pierre Lescure. Languishing in America, Messier was evidently homesick. “He was on the phone wanting to know how it was, who was there,” says Nazanine Ravai. This was just the first item in a long list of hasty social retreats on both sides of the Atlantic. Messier’s keynote address at the Allen conference, to which six years earlier he’d lobbied for an invitation, was quickly canceled. “No one [at the conference] even mentioned him,” says a conference participant. “Suddenly a Frenchman’s not there . . . So what?” Messier’s exit from Establishment circles didn’t quite go as seamlessly as he might have hoped. The week after his resigna- tion people around the world received invitations from the Ap- peal of Conscience Foundation for a black-tie dinner on October 1, co-chaired by Paul Fribourg, chairman and C.E.O. of Conti- Group Companies, philanthropist John C. Whitehead, and for- mer Federal Reserve chairman Paul Volcker. They were invited to pay up to $100,000 to honor Messier, who was receiving an award. (The office of the foundation’s president, Rabbi Arthur Schneier, quickly confirmed that Messier would in fact no longer be attending.) The New York Public Library’s staff congratulated itself for scheduling its annual corporate-sponsor dinner, at which Messier was the guest of honor, for June 10. “We would have had to give a lot of money back [if it had been two weeks later],” said a spokesperson.

n August, Messier relocated to the South of France, from where he wrote that he was “taking the sum of holidays I’ve Imissed over the last 20 years.” There were rumors that he might be personally bankrupt due to a $25 million loan he’d tak- en out to buy Vivendi stock before it slumped. A close friend said it was true; Messier’s self-confidence was such that he was “prepared to bet on himself.” “For sure I do believe in V.U. and V.U.’s strategy,” Messier re- sponds. “That being said, the information [about the bankrupt- cy] is wrong.” When asked what his long-term plans are, he says, “I will stay [in America]. I have some unbelievable stories,” he says, “and one day I will tell them.” However, he refutes press reports that he is currently writing a tell-all memoir called How I Was Betrayed. I ask him if he has reconsidered the merits of his dream to unite content and distribution across two continents. “The future will say for V.U. as for many others. . . . It wasn’t a dream but a vision, and it’s still the right one, even in a different time frame,” he says. It’s a view he wasn’t keeping to himself. Among those receiving regular correspondence from the fallen mogul, according to one board member, was Jean-René Fourtou, the new chairman of Vivendi Universal. Fourtou, meanwhile, wrote an open letter to Vivendi employees and investors on August 18, discussing his effort to save the com- pany from drowning in $18.6 billion in debt. While he is trying to secure a $2 billion loan in order to avoid a fire sale of assets, he has already arranged to sell $9.8 billion worth of them, including Houghton Mifflin and EchoStar Communications. For the time being he has decided to hold on to Cegetel, Canal Plus, Universal Music, and Vivendi Environnement, to maintain the option of re- viving the company as an “international media group” in some form. Vivendi stock finally edged up in response to the moves. Rupert Murdoch didn’t comment publicly on Messier’s demise, but few people doubted he was happy about it. After all, Messier used to joke that Murdoch was just a smiling dinosaur. But after it was all over the dinosaur was still roaming the world—alone. ■

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