The Rise and Fall of Vivendi Universal's Jean Marie Messier
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Case Details:
Case Code : LDEN015
Case Length : 11 Pages
Period : 1996-2002
Pub Date : 2003
Teaching Note :Not Available
Organization : Vivendi Universal
Industry : Media and Entertainment Countries : France
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"Messier's stellar rise and catastrophic fall has
grabbed headlines all over France and attracted other authors, most of whom
agree he became a victim of his own arrogance and addiction to deal-making
without thinking fully of the consequences."
- David Litterick, Messier Book Blames Everyone but Himself,
www.telegraph.co.uk, November 15, 2002.
"No doubt the company (Vivendi Universal) would never
have existed if not for his vision, but critics within the company called him
arrogant and cagey."
- Tim Spira, Integrated Media Conglomerates go Pear Shaped,
www.ml.mny.co.za, November 18, 2002.
An Unceremonious Departure
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On July 1, 2002, Jean Marie Messier (Messier) the CEO of the France-based
Vivendi Universal (VU), the world's second largest media conglomerate, resigned
from his post. The resignation came after the debt strapped company's board
unanimously asked him to quit.
The board accused Messier of, among other things, causing an 80% decline in the
company's market value. Industry Analysts and the company's shareholders also
held Messier responsible for VU's problems.
The company had posted losses of € 13.6 billion1
in 2001 and accumulated debts of € 15.7 billion – most of which were due to
the asset write down of the companies Messier had purchased.
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Messier's
departure attracted a lot of attention in corporate circles across the
world. Industry observers were surprised over how the markets had turned
hostile towards a leader they had themselves lauded a couple of years ago. Messier had once been called one of the biggest
dealmakers in Europe for having turned a sleeping water and utilities
giant into a huge media company.
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Elie Cohen, a French economist, said,2
"VU has always been about, by and for Messier – which worked as long as
markets believed in the man. When the stock declined and Messier proved
incapable of reversing it, that's when market perceptions, Messier's
reputation and VU itself crumbled."
While many critics believed that Messier was the victim of his own
excessively ambitious plans, there were many who said that his fall was
a simple case of ignoring the risk of overexposure. Some analysts
claimed that his inclination towards the American style of management
coupled with his views regarding the French way of running businesses
had made the French media and political establishment turn against him,
precipitating his downfall. |
The Rise and Fall of Vivendi Universal's Jean Marie Messier
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