THE group is vast, the numbers good and the boss distinctly approachable, but
Vivendi is not a name that means much to many over here.
“Ah, that is because Vivendi is a brand for stakeholders, not consumers,” says
its chief executive, Jean-Bernard Lévy, in his French-accented English.
“There is a lot of value in the brands we have – we don’t want to complicate
it.”
Nor do they. Paris-based Vivendi’s light touch in running the world’s biggest
music company, Universal, and what is now the world’s biggest video-gaming
company, Activision Blizzard, is beginning to impress outsiders.
Remodelled from the Vivendi media empire that nearly capsized with debt in
2002, the new group has been quietly stabilised and refocused, with
interests including music, gaming, broadband and mobiles.
At its heart sits Lévy, 52, a tall and bespectacled Frenchman with a rather
inscrutable smile. His varied CV – engineer, manager, banker and political
adviser – is matched only by his droll directness. Try asking him what he
knows about music.
“I have no view as to what makes a successful record. My own artistic taste is
the biggest risk for the company and I know it. I don’t interfere because I
don’t know, and I know I don’t know, and I want everyone to know I don’t
know.”
He grins. “I am not running Universal Music. I am the enabler. I try to make
sure that the people who know how to run a music company are put in a
position to perform well while under sufficient pressure to produce the
results I am requesting.”
Those results seem clear. In contrast to the sorry state of Terra Firma-owned
EMI, Universal is gaining market share. It looks like it’s even snatching
The Rolling Stones from its British rival.
And last month, Lévy put together another world No 1, merging Vivendi Games
(biggest seller: World of Warcraft) with American video-gaming giant
Activision (Guitar Hero), to create Activision Blizzard.
That deal could make Vivendi, with a market value of €34 billion (£25.5
billion), a key player in future digital convergence. And Lévy pulled it off
without a squeak of prenuptial speculation, testimony to his belief that
relationships and discretion come first.
“You are right, it was totally unexpected,” nods Lévy, “and remember, the
games industry is now bigger than the music industry.” But he managed it, he
says, because the boss of Activision in California could talk to the boss of
Universal, and ask, “what’s it like working for these Frenchmen who are a
bit of a mystery?” And the answer was positive.
And that, say colleagues, is how Lévy operates, low-key and resolute, relying
on trust, never ducking the questions. Does he worry about Amy Winehouse,
Universal’s biggest-selling artist last year? “No,” he shrugs, “I follow the
headlines, and I hope she has better health in the future.”
You can’t rattle him, but he has his quirks. He had wanted to meet at The
Sunday Times – he likes to visit others where they work, apparently – but
was persuaded that we might get more peace in the offices of Vivendi’s City
PR firm.
There he strolls in half an hour late, in grey suit and gingham shirt,
chattily charming, flanked by French and British assistants. With his
clipped grey hair, precise speech and meticulous manner, he could be a
surgeon or architect.
Once we sit, however, he’s swiftly in media mogul mode. He must, he says, have
copy approval of anything I write. Not a chance. But, he says, it’s just in
case his English is wrong . . .
Come on – his English is immaculate. He learnt it young, spending three terms
at St Martin’s, a prep school in Northwood, Middlesex, as a gifted
12-year-old, part of a year outside the French system. The experience left
its mark.
“Yes, they did call me Froggy,” he sighs. “But it certainly made me tougher.”
You can tell. Lévy came into Vivendi as part of the team that overhauled the
group after the frenetic regime of previous chief Jean-Marie Messier. The
group, once a conglomerate known as Compagnie Générale des Eaux – it ran the
Paris water supplies – had bought assets around the world, driven by
Messier’s vision of building a global media giant. Then it nearly collapsed.
Messier was ousted in 2002. Lévy started as deputy to veteran Jean-René
Fourtou, brought in to save the company. Through a series of desperate
sales, they reshaped the group to focus on key, scalable assets. Lévy took
the top slot in 2005.
“We had only one priority, save what can be saved,” says Lévy. “It was very
obvious that the company didn’t need a vision, it needed to create its
credibility through performance.”
That mantra has stuck, despite continuing criticisms that Vivendi still
doesn’t gel. Besides music and video games, it has 20% of the American film
and TV giant NBC Universal, 100% of the French film and TV firm Groupe
Canal+, 56% of France’s No 2 mobile operator SFR (which in turn owns 70% of
France’s No 2 fixed-line operator Neuf Cegetel) and 53% of Morocco’s No 1
fixed-line and mobile firm, Maroc Telecom.
To some it still looks a hotchpotch. Do the mobiles fit? Lévy shrugs. “We are
trying to see if we can add an emerging market like a second Morocco, but
it’s not a necessity.”
He adds that KKR, the American buyout firm, approached Vivendi in 2006 with a
view to breaking it up. “We said, OK, our duty is to study your proposals.
They spent five weeks looking at our books, and then said it was not doable.
They liked our strategy, our share price was not that depressed . . . that
was the end of the break-up story.”
The numbers support him. Vivendi announced adjusted net income of €2.6 billion
on revenues of €20 billion for 2006. Lévy expects to top that comfortably
for 2007, with €4 billion net income targeted for 2011, driven by galloping
sales of video games worldwide. Even in a consumer down-turn? “Boys will
continue to play World of Warcraft to keep the peace at home, even if the
mortgage is a bit more.”
As for synergies, you have to be more flexible, he explains. “We are in the
content business and the consumer-management business. We have millions of
subscribers to the various services we sell. We see if the different
divisions can help each other, but we don’t force them.” He is equally
sanguine about why Universal Music has prospered when others have foundered.
He acknowledges that music faces real challenges in a digital age.
“But it’s about management,” he says. “When Universal merged with Polygram
nine years ago, its market share was the same as EMI’s. Today it is treble
EMI’s. Only one reason – the management, and the stable environment from the
shareholder, giving them the resources to perform well. It’s all about
people.” Then he adds: “But we would not have approved the very aggressive
deals that you have seen recently, just for one artist. That’s too much
risk.”
Executives who have ridden the Vivendi rollercoaster highlight Lévy’s calm
style. “It’s steady, unflappable, supportive, incisive and he’s completely
available,” says Lucian Grainge, chairman of Universal Music Group
International.
That is a change from the Messier days, when Vivendi subsidiaries rarely knew
what came next. And there is no hint of Gallic disdain. “Jean-Bernard is
respectful and funny, the very opposite of snotty,” says Grainge.
Lévy describes himself as an opportunist. Born in Paris, the eldest son of a
gastro-enterologist and a teacher, he sidestepped his parents’ ambitions for
him to practise medicine – “my father worked too hard” – and trained as an
engineer, starting in management at France Télécom. He later worked at Matra
Communication and the investment bank Oddo Pinatton, sandwiching that with
two stints advising government. He worked as chief of staff to the French
minister for industry between 1993 and 1994. Such closeness to government is
not unusual fora French boss.
“Half the bosses I know have worked in government,” smiles Lévy. And he
rebuffs suggestions that he went into Vivendi at the French government’s
instigation. His motive was more mundane. He just needed another job after
9/11 knocked banking sideways.
“I never thought I should manage my career, and I certainly never thought I
should manage a big global firm. My objectives are always short term, one
year, two years.”
But his varied experience has obviously helped. At Vivendi he wants to keep
building on what he has, buying out minority stakes, adding interesting
acquisitions. Could Vivendi pop up in a whole new area again? “We try and
concentrate on the areas we are in, and don’t feel the pressure to find new
areas, but we also feel if needed we should be able to look, why not?”
And does Vivendi’s much-touted stability mean he is in for the long haul? Yes,
he says, doubly so, because everything depends on the key relationships.
But that may contradict his urge to keep finding new challenges, so watch this
space. He tags himself an accidental media mogul, and he enjoys his capacity
to surprise.
JEAN-BERNARD LEVY’S WORKING DAY
“I WAKE UP in my mistress’s bed,” laughs the Vivendi chief executive. “No,
just joking ... at home in my Paris apartment in the 16th arrondissement,
before 7am. I read Le Figaro, have breakfast and get driven to the office by
8.15.”
Jean-Bernard Lévy takes direct reports from eight executives plus the bosses
of Vivendi’s five divisions. “I talk to my chief executives every week, but
not every day.” He focuses on performance, appointments, strategy and
communication. He travels at least one week a month. When in Paris, Lévy
finishes by 9pm. “I try and get back to chat to the kids.”
VITAL STATISTICS
Born:March 18, 1955
Marital status:married, with four children
School:Lycée Pasteur, Neuilly
University:Ecole Polytechnique (Paris) and Ecole Nationale Supérieure
des Télécommunications
First job:assistant, Alpa steel plant
Salary package:£640,000 plus bonus Homes:Paris,
Normandy, Val d’Isère
Car:grey Renault Espace
Favourite book:Les Liaisons Dangereuses, by Pierre Choderlos de Laclos
Favourite music:Mahler
Favourite film:Jules et Jim
Favourite gadget:tuning fork
Last holiday:skiing in the Alps
DOWNTIME
JEAN-BERNARD LEVY relaxes by reading and listening to classical music. “And I
watch a bit of soccer and rugby on TV. I support France and Chelsea. When I
was at English boarding school, the first thing the kids asked me was
‘Tottenham or Chelsea?’ There was no Arsenal then. I chose Chelsea. I still
don’t understand why.”
He also loves to ski. “I’m not a man too much for sun and water. I prefer snow
and the mountains.” He is still recovering from a recent injury. “I twisted
my knee. I hope I can ski again soon. That’s the only thing that wakes me at
4am, worrying.”
