Focus on Vivendi as TV boss fired

Messier: Under pressure after firing the boss of Canal Plus

PARIS, France (CNN) -- The chief executive of Vivendi Universal, the world's second-largest media company, is coming under pressure after sacking the boss of French broadcaster Canal Plus.

Jean-Marie Messier fired Canal Plus chief Pierre Lescure late on Tuesday a month after he was given two years to turn around the loss-making business.

Lescure responded by going on air before a live studio audience to denounce the decision, fighting back tears and sending farewell kisses.

The move has put the spotlight on whether Canal Plus should mirror French culture or turn to Hollywood. And now there are doubts over Messier's position.

MORE STORIES • Messier: Threat to French culture?  • Vivendi Universal fires Canal Plus boss  • Vivendi posts $11.8B loss  • Vivendi to sell $3B shares     QUICKVOTE Should Vivendi's Messier go? Yes No View Results

Vivendi Universal is at a crossroads. The one-time water utility has been transformed into a media conglomerate by Messier, a charismatic dealmaker.

But investors are unconvinced that the firm, which grew from the June 2000 $46 billion purchase of Canada's Seagram -- with assets like Universal Studios and Universal Music -- and Canal Plus, Europe's biggest pay-TV operator, can deliver a coherent strategy for growth.

"We sold our shares in Vivendi a couple of weeks ago," Rohini Rathour, European strategist at Sarasin Investment Management, told CNN. "They have a lot of nice assets but we can not see how they can make them work together."

This year alone the stock has lost more than a third of its value. On Wednesday, a day after firing Lescure, Vivendi's stock rose 2.9 percent to 40.76 euros.

"There is no reason why the stock should be up. There are obvious management problems," said Rathour. "Unless there is hope that Messier may be forced to step down."

But Rathour believes Messier's decision to remove key executives could strengthen his hand as he attempts to sell the company to investors as a more international focused company. Messier has moved to New York in the hope of attracting key U.S. allies.

"Canal Plus has always been a problem child," said Rathour. "Messier would like the company to be more Hollywood focused, while the French are keen to see it sporting local language films and programmes."

CNN correspondent Hala Gorani in Paris added: "Canal Plus is seen as a bastion of French culture. It not only broadcasts sport, movies and political programmes, it is also the largest funder of French cinema."

Canal Plus made an operating loss of 374 million euros last year and chief operating officer Denis Olivenness resigned last Friday over strategy disagreements with Messier. Olivenness, who joined Canal Plus in 1997 from Air France, was seen as Messier's potential successor.

Investors are convinced that Messier has not lost his hunger for acquisitions. Many hope he will string together the current crop and make them work. Following the acquisition of Seagram, Messier has splashed out billions of euros on music Web site MP3.com, publisher Houghton Mifflin, the entertainment assets of USA Networks and a stake in U.S. satellite company Echo Star.

"There is talk that Messier is interested in concluding a distribution deal in the U.S. and will buy BT Group's Cegetel mobile phone stake," a London based media analyst told CNN.

Messier has said the company will divest some of its 63 percent stake in Vivendi Environment, the world's largest media company, but potential buyers could drive a hard bargain, knowing that Vivendi Universal needs to reduce its 19 billion euros debt.

Last month, Vivendi Universal posted a 12.6 billion loss after admitting it paid over-inflated prices for acquisitions at the height of the dotcom boom.

Messier is expected to receive strong criticism form investors when shareholders meet on April 29 to discuss the groups performance.

"He's a survivor," said an analysts. "At the best, the board may consider curtailing his role. They may shift him but Messier's ego is bigger than Vivendi."