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. Last Updated: 07/27/2016

Vivendi Firing Raises Ruckus

LOS ANGELES -- Jean-Marie Messier, chairman of Vivendi Universal, fired one of his key executives Tuesday, touching off a nationally televised war of words in France and intensifying speculation that the man who built the world's second-largest media conglomerate is at risk of losing control of his empire.

The move triggered such controversy that France's Socialist prime minister went on television in support of Lescure. Lionel Jospin called into question Vivendi's commitment to French cinema, alluding to criticism of Messier for betraying the nation's culture by buying Los Angeles-based Universal Studios and moving his family to New York.

Messier's ouster of Pierre Lescure, the beloved chief executive of Canal Plus, Europe's largest pay TV provider, angered the legions of followers he has amassed during a long career in television, including as a popular anchorman. Some unions and Canal Plus employees, in fact, temporarily took control of Vivendi's own TV channel in France to protest the firing of Lescure.

The turmoil Tuesday is another setback to Vivendi's grand ambition to build a global entertainment powerhouse from the merger with Universal parent Seagram Co. and Canal Plus 18 months ago. In the last year, the company has lost nearly half its stock value, and some shareholders are questioning Messier's vision of building new wireless services worldwide using Universal's films and music and Canal Plus' reach into European homes.

His ability to manage the company and his staying power as head of the Paris-based conglomerate are expected to be on shareholders' minds next week at Vivendi's annual meeting in Paris.

Messier recently has been battered by the media, the financial community in the United States and abroad and even by his own board members for the firm's poor financial performance. Messier said he had no choice but to oust Lescure.

"There was a management crisis," he said, calling Lescure unprofessional and unethical. "He needed to be loyal. He has not been. And his performance was not great. When you have neither the loyalty nor the performance, where is your place in the organization?"

For his part, Lescure took up the gauntlet. He and some of his employees interrupted Canal's regularly scheduled program Tuesday evening to berate Messier. Lescure made a tearful appeal for support from Canal Plus staff, saying that Messier negotiated in bad faith, without following codes of governance set up by the company.

In a statement, Lescure said he was "pushed overboard." He also said Canal Plus' 17 years of "editorial independence and liberty are now threatened."

Tensions with Lescure surfaced even before the complicated merger of Vivendi, Seagram and Canal Plus. Lescure, who is considered the godfather of pay TV in France and the spiritual leader of Canal Plus, was reluctant to give up the authority he has held as CEO since 1984. He inflamed the tensions by using Canal Plus' politically satirical puppet show, a popular French cultural fixture, to poke fun at his boss.

On Tuesday, the puppets mocked Messier again, before station managers pulled the plug and switched to weather.

Messier, meanwhile, was across town on Canal's rival broadcast station touting his new management plan.

Although Messier and Lescure tried to bury the hatchet, the truce failed to stick. With Canal Plus faltering, Messier tapped Barry Diller late last year to head up the Hollywood studio, nudging out Lescure, who had previously overseen both Canal and Universal.

A month ago, Messier gave Lescure and his second-in-command, Denis Olivennes, an ultimatum, demanding that they deliver a profit within 24 months or be fired.

In protest, Lescure sent an e-mail to Canal Plus employees saying that Messier shared responsibility for the losses because he continued to approve the costly expansion outside France. Olivennes resigned Friday in protest.

But unlike other Vivendi movie and music divisions, Canal Plus has been a consistent money loser, with a loss of $439 million in 2001. The biggest drain was from its Italian affiliate, Telepiu, which has suffered from piracy, high programming costs and competition from News Corp.'s pay TV company.

Investors said the bedlam at Canal Plus on Tuesday wounds Messier. But analysts say it is unlikely Messier will be ousted, because he enjoys overall support of the board. More likely, they say, is that Messier, now chairman and CEO, may be forced to give up one of his roles.

After meeting with board members Tuesday, Messier said he was confident they supported his management and was not in fear of losing his job.

"I'm relaxed," he said.