Last summer was the peak of Jean Messier's life. At the Bloomberg Center, he received France's highest honor—the Napoleon Medal.
Dressed in a sharp blue suit, the successful businessman flashed a radiant smile as he stepped onto the stage.
Once the medal was pinned to his lapel, he began his speech in a familiar, polished tone: "I'm thrilled beyond words and deeply grateful to my friends and loyal partners. Looking at Vivendi Universal today, we can confidently say…"
The past is gone.
On July 3, 2002, Vivendi officially announced that Messier's resignation had been approved by the board.
A new era was dawning for Vivendi.
Michael Ovitz had been working behind the scenes to connect Vivendi with Dunn, giving Dunn access to insider updates.
Now, Vivendi urgently needed to find an experienced, steady CEO to steer the company out of its troubles.
But that was easier said than done.
Vivendi was drowning in over €34 billion in debt. To ease the crushing financial pressure, they'd need to sell at least €12 billion in assets. To boost their Moody's credit rating, that number jumped to €20 billion.
The real challenge? Selling assets takes time, and Vivendi couldn't even cover its debt interest payments. They desperately needed a €2-3 billion short-term loan just to keep the lights on.
For Dunn, this was great news.
The more cash-strapped Vivendi was, the more they needed him.
At this point, Dunn was probably the only one in the world who could cough up that kind of money on short notice to bail out a company as tarnished as Vivendi.
Oh, and there was more good news—Dunn's luxury yacht had finally arrived in Los Angeles after a long journey from a German shipyard!
It was the largest private yacht in the world.
Excluding the lower decks, it had four stories—three floors high—with a classic, elegant design that screamed aristocratic grandeur.
The "NAT" logo caused a stir in LA the moment it appeared.
That evening, Dunn threw a lavish party on the yacht, inviting Hollywood's elite—directors, stars, and studio execs.
Officially, it was to celebrate the blockbuster premiere and rave reviews of Pirates League: Curse of the Black Pearl. But those in the know? They knew Dunn was really toasting Messier's exit from Vivendi.
The "NAT" yacht had four levels: the top floor housed the owner's suite, a promenade, and an observation deck; the third floor had guest rooms, a dining area, and a bar; the second floor was the heart of the party, with side rooms set up for other activities.
The yacht sailed out to international waters, where guests could try their luck at a few games.
Of course, the gambling crowd was mostly celebrities, actors, and hired dancers or models there to liven things up.
The real heavyweights didn't flaunt their status at events like this.
Michael Eisner strolled over, red wine in hand. "Looks like you're already halfway to victory!"
Dunn shot him a grin, then leaned in to whisper to Jennifer Connelly, who was standing beside him. "Why don't you check out the first floor? There's a pool down there—Nicole and Kate are hanging out."
Then he raised his glass to Eisner, taking a sip. "Still a long way to go."
Eisner shrugged. "Comcast is tied up with me, and Vivendi's in such bad shape they're desperate for cash. Universal Pictures… it's looking like it's coming back to Hollywood."
Dunn replied coolly, "Of course. Hollywood's business is best run by Hollywood."
A complicated expression crossed Eisner's face. "I heard… Pirates League is about a bunch of pirates in the Caribbean?"
Dunn's heart skipped a beat, but he kept his cool. "Yeah."
Eisner continued, "You know, Disney's California Adventure has a Pirates of the Caribbean section. If there's a chance—"
"Hold up!" Dunn cut him off with a wave of his hand. "Michael, don't forget—Disney's got theme parks, but so does Universal."
Eisner was fishing for a deal to revamp Disney's Adventure Park with Pirates League elements. No way that was happening.
Theme parks were a natural extension of the film industry—a goldmine for brand value and merchandise revenue.
Disney parks were the biggest name in the game, no question.
But Universal Studios wasn't far behind.
Once Dunn took over Universal, his first move was to shift their strategy: expand the parks, boost their influence, and take on Disney head-to-head.
With Marvel, Harry Potter, Pirates, and later Transformers and Pixar properties in their arsenal, Universal could absolutely challenge Disney's dominance.
Making an excuse, Dunn stepped away from Eisner and approached Ron Meyer, lowering his voice. "Any inside scoop?"
Meyer shook his head. "Nothing solid yet, but Vivendi's headquarters is definitely planning to sell off entertainment assets."
"Oh?" Dunn's eyes lit up. "Tell me more."
Meyer explained, "Yesterday, some financial folks from France came to audit assets. Not just Universal Pictures—Universal Music, USA Network, Blizzard Entertainment, Houghton Mifflin Publishing, the works."
Dunn mulled it over, lost in thought.
Meyer glanced at him. "What's your take on USA Network?"
Dunn chuckled. "What's your take?"
USA Network was a major basic cable network in the U.S., with channels like Chiller, Cloo, E!, USA Channel, HD feeds, Sleuth, and Esquire Network—nearly 20 stations reaching over 60 million American households.
In 2001, it posted a $530 million profit and a $4.7 billion valuation, ranking 15th in the U.S.
Last December, Vivendi shelled out $10.3 billion to buy USA Network—a nearly 200% premium. Classic Messier madness.
Meyer shook his head calmly. "Over the past six months, USA Network's distribution paired with Universal Pictures' content has boosted revenue by 40%. It's a solid combo."
Dunn's eyes narrowed.
He wasn't a business rookie anymore. He saw right through Meyer's angle.
Dunn Films acquiring Universal Pictures was practically a done deal.
In that scenario, Meyer had to think about his place in the merged company.
He was Universal Pictures' chairman; Bill McNick was Dunn Films' president. Both were top-tier Hollywood execs.
Post-merger, who'd call the shots?
Even if McNick took the lead, how much power would Meyer have?
The synergy between Universal Pictures and USA Network was Meyer's biggest leverage.
Universal's profit margins paled compared to Dunn Films', but Universal had something Dunn couldn't touch: a library of 3,600 films (1,800 exclusive, 1,800 shared) and 100,000 hours of TV content.
If Dunn Films snagged USA Network, Meyer's influence would skyrocket.
Dunn hesitated. "I'm not sold on the future of TV networks."
Meyer raised an eyebrow. "STA Network?"
Dunn shook his head. "That's different. STA's premium cable, focused on high-quality, exclusive content."
Meyer seemed unsure of Dunn's thinking but played along. "Sure, but if STA wants to grow—especially with operators dragging their feet—it'll need a massive TV network's resources to boost its reach."
"Oh?"
"There are tons of sports channels in the U.S., so how did ESPN become the biggest in just over a decade? Because it had ABC's network muscle behind it. Now ESPN's essential to Americans and feeds back into Disney's TV empire."
Seeing Dunn deep in thought, Meyer pressed on. "I know STA's struggling—subscriber numbers are slipping while HBO and Showtime are growing. Beyond STA's high fees and lazy operators, it's because HBO and Showtime have powerful TV networks pushing them."
Dunn gave a half-smile. "So, you're saying… USA Network's a must-have?"
Meyer stayed composed. "USA Network and Universal Pictures are tightly linked under Vivendi's entertainment division. Splitting them would tank both their values. Vivendi won't let that happen."
Dunn frowned. "You're saying… Universal Pictures might be sold with USA Network as a package deal?"
Meyer nodded gravely. "Very likely."
"Got it."
Dunn nodded, wrestling with the TV industry's complexities.
The next decade was a golden age for cable TV.
But after that? Streaming would take over, and TV would become a fading industry. Plus, cable was a brutal market, facing giants like Disney, Comcast, Viacom, and News Corp.
That's why Dunn had been cautious, only acquiring one premium cable channel.
Only networks like HBO, with unique, must-have content, could survive the streaming wave.
But if Meyer was right—if Vivendi insisted on bundling Universal Pictures with USA Network—Dunn might have to bite the bullet.
"Fine," he thought, shaking off doubts. "Even if TV's a dying industry, networks don't lose money. Their stock prices might lag, with low P/E ratios, but who cares if the profits are solid? Apple's P/E was under 20, and it still became the world's biggest company."
Dunn cleared his head.
There'd be a way forward.
With his foresight, he could stay ahead of the game and plan early.
Even buying low and selling high later would be a solid move.
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