Frenchman Tries to Translate Success to Universal Studios

PARIS —  Onetime TV anchorman Pierre Lescure, an American pop culture fanatic and Porky Pig collector, has the keys to Universal Studios firmly in his grip.

Running a Hollywood studio fulfills a lifelong dream for the 55-year-old co-chief operating officer of Vivendi Universal. With the completion of its $31-billion buyout of Universal’s parent more than a week ago, French utility giant Vivendi will become the world’s second-largest media conglomerate behind America Online, which will be No. 1 pending its expected acquisition of Time Warner.

Almost by default, Lescure, the only French executive in Vivendi Universal’s top ranks who knows his way around Beverly Hills, becomes the linchpin in the largest Hollywood acquisition by a European company.

As the chairman of French TV behemoth Canal Plus, Lescure dominated European pay television in part by repackaging American movies and television for European audiences. Canal Plus was bought by Vivendi at the same time the company acquired Universal parent Seagram; all three companies were rolled into Vivendi Universal last week.

Lescure, who has two decades of experience buying and making American movies, is responsible for protecting Vivendi Universal’s interests in a predatory culture that has led to the fleecing of virtually every foreign company to invest in Hollywood.

Though Lescure will call the shots at the movie studio--splitting time between Paris and Los Angeles--he has had a rough time adjusting to a lesser role in a larger corporation. French newspapers and magazines have been filled with accounts of friction between Lescure and Vivendi Universal’s buttoned-up chairman, Jean-Marie Messier.

As the globe-trotting Lescure hunts for a Los Angeles-area home, the question is whether he should buy or rent. French television industry sources suggest that Messier has reservations about handing over Hollywood’s oldest studio to an executive not known for financial discipline.

Questions about Lescure’s future have quieted since Messier addressed Canal Plus employees in late November. After issuing repeated denials that Lescure would leave, Messier told the Canal Plus work force during a three-hour assembly that “Pierre Lescure is the best boss for the future of Canal Plus.”

Still, people close to the two French executives give their executive marriage only a 50-50 chance of surviving.

“It’s actually very simple,” said Barry Diller, the chairman of USA Networks Inc., which is 45% owned by Vivendi Universal. Explaining the tensions that arose after the unsolicited takeover of the smaller Canal Plus by a conglomerate like Vivendi, Diller said: “Canal Plus would rather be independent. Lescure didn’t particularly want to work for anyone.”

Universal has struggled for five years under the disinterested ownership of Seagram’s scion, Edgar Bronfman Jr. Now, the studio has a leader enthralled by movie-making just as a winning streak gains steam as a result of hits such as “Dr. Seuss’ How the Grinch Stole Christmas” and “Meet the Parents.”

Lescure Says He Will Get Tough at Studio

Under Lescure’s stewardship, Canal Plus has lost tens of millions of dollars in Hollywood investing in box-office flops and failed movie companies. In a recent interview at Canal Plus’ distinctive, white-tiled headquarters designed by Modernist architect Richard Meier, Lescure admitted that he doesn’t like saying no.

“But in Hollywood, I have to force myself to say no,” Lescure said. “I’d like the nasty boy Nobel Prize.”

In the interview, Lescure sat still for 15 minutes, spending the remaining hour pacing, gesturing and playing with a cigar he plucked from a box on a cluttered coffee table in his rather messy corner office overlooking the Seine.

Since Lescure became chief executive in 1994 of Canal Plus, the company has soared, increasing shareholder value sevenfold and spreading its influence beyond France into Spain, Italy and the Netherlands.

Lescure became a celebrity in France in the 1970s as a top news anchorman who dated actress Catherine Deneuve. After creating France’s first TV program to celebrate rock ‘n’ roll, Lescure redefined himself as a programming maverick. He joined Canal Plus the year before its 1984 launch, becoming the protege and successor of founder Andre Rousselet.

Since June, Lescure has shuttled between Paris and Los Angeles, getting acquainted with Universal. He has vowed to keep the studio in the hands of U.S. executives, including current chief Ron Meyer, but has revealed little else about his management plans.

Meyer said plans are in the works to swap high-level executives between France and Hollywood to speed the integration process.

Lescure’s intentions may become clearer this week when he is expected to announce long-term goals for Canal Plus. He plans to visit Los Angeles in early January for the first time since the merger closed Dec. 8. Lescure said he’ll spend at least 15 days every two months in Los Angeles.

A top Lescure aide, Canal Plus Deputy Chairman Marc-Andre Feffer, described his boss as a team player. “He doesn’t like paper but prefers personal communications or the phone. But he also likes delegation. He gives big freedoms that are motivating,” Feffer said.

Lescure does not pretend to be close to Messier. Instead, he portrays the two top executives as sharing a common vision. Lescure said the bond was forged soon after Messier joined Vivendi four years ago and increased the company’s stake in Canal Plus, becoming its largest shareholder.

Lescure credits Messier as the driving force in Canal Plus’ purchase of its biggest pay-TV rival in Europe, Nethold. He accompanied Messier during early negotiations with Seagram chief Bronfman.

Yet the two executives couldn’t be more different. A graduate of one of France’s prestigious engineering schools, the 44-year-old Messier is part of the country’s business elite.

In just four years, Messier, a former investment banker and government bureaucrat, has transformed the water-and-sewage utility Vivendi into a global media force. But he is a newcomer to the entertainment businesses that are expected to drive his ambitions for creating a worldwide wireless network.

A journalism school graduate, Lescure lacks the formal management training that is the standard pedigree for running one of France’s blue-chip companies.

A Rise From Chief Programmer to CEO

But within Canal Plus, Lescure is a near-mythical figure. A counterbalance to the aloof and aristocratic Rousselet, Lescure rose from programming head to chief executive in 1986, before taking over as chairman when Rousselet retired six years ago.

From the start, Canal Plus possessed an us-against-the-world swagger that stemmed from surviving near-failure. The original channel almost went under because the French refused to pay for TV programming.

The company owed its start to political connections with France’s president at the time, Francois Mitterand, a golfing buddy of Rousselet. After changing the rules by granting a rare broadcast license to Rousselet to launch Canal Plus, Mitterand allowed the company to televise movies a year before other networks. Canal Plus agreed to underwrite theaters and films in exchange for a powerful monopoly over pay television in France that lasted almost a decade.

Critics claim that the government treatment left Canal Plus with a sense of entitlement that has hindered its ability to compete.

Lescure proudly pointed to Canal Plus’s commanding position in 11 countries. Today, Canal Plus has stakes in pay-TV services in France, Spain, Italy, Poland, Belgium, Scandinavia and the Netherlands. In Europe, it lacks only Germany, where the Kirch Group rules. In Britain, News Corp. is king.

But Lescure is haunted by co-production deals in Hollywood in the early ‘90s with Carolco Pictures and Regency International Pictures that ended in disaster. Canal Plus pumped tens of millions of dollars into Carolco before it went bankrupt from cost overruns.

Lescure, who quickly became a fixture on the party circuit, earned a reputation as an easy target who tried to buy his company’s way into Hollywood’s tightknit inner circle. Canal Plus has spent hundreds of millions of dollars making movies in Hollywood under Lescure’s watch.

His extraordinary spending wasn’t limited to the U.S. Analysts say he overpaid to get television footholds outside France, particularly in the Netherlands and in Italy with the 1997 Nethold deal.

“We’ve learned a lot,” Lescure said. “We had to adapt the [French] format more than we expected.”

Last year, Canal Plus was profitable in only two territories--France and Belgium--with companywide net losses narrowing 13% to 136 million euros (about $121 million). Lescure said that the losses are the price for establishing European dominance and that the company will return to profitability in 2001.

“If they are going to expand into this international organization . . . they have to give up . . . this little club that grew out of their beginnings as the local channel that no one thought would work,” said an executive at a rival French television company. “Hollywood is a different business requiring serious financial discipline that has not been Lescure’s strength.”

Lescure hopes to bring content to Vivendi’s wireless world. Vivendi has planted its stake in a European wireless industry that is far ahead of the U.S. With its partner Vodaphone AirTouch, Vivendi is launching what it calls the first multi-access portal. Subscribers will get stock quotes, sports scores, headlines, movie listings and more on their cellular phones, televisions or hand-held computers.

To this burgeoning wireless world, Canal Plus brings TV subscribers, content and interactive experience. In addition to 11 million customers in Europe, it owns 25 themed channels, movie studios, interactive television services, Internet sites and set-top box technology. Canal Plus customers can already bank, bet, shop and play games with strangers on their TV sets.

Universal’s music and movie libraries will play a central role in differentiating Vivendi’s portal service, called Vizzavi. Subscription services for downloading music and movies from the Internet will eventually be part of the mix.

French TV executives say the merger has presented an opportunity to clean house at Canal Plus. They point to the sudden resignation in September of Lescure’s deputy and close friend Alex Berger.

Lescure had expected Berger, a former movie producer and an American, to serve as his liaison in Hollywood. Berger’s departure was a blow to Lescure.

“He was my boy next door, and now the room is empty,” said Lescure, pressing a button near his desk to open a sliding door that connects their offices.

Canal Plus employees say Berger’s exit underscores the retracting influence of a group known as “Friends of Pierre.”

The new rising power appears to be Denis Olivennes, who joined Canal Plus three years ago, after helping rescue Air France from bankruptcy. With an office at the opposite end of the executive floor, Olivennes serves as Lescure’s bad cop.

“I’m here to be what the top guy doesn’t want to be,” Olivennes said.

For his part, Lescure prefers to be remembered as a visionary.

“When I’m in a wheelchair, I’d like the brand to still be alive, changed by new technologies and part of something big.”