The CEO of Universal Music’s parent company, Vivendi, Jean-Bernard Levy, is departing the French media and telecoms conglom following a disagreement regarding the strategic direction of the group. The somewhat sudden departure follows denied speculation that Vivendi might split its business empire into two.
Levy had been Vivendi’s CEO for a decade, having initially joined a company on the brink. The one-time water firm had over-expanded in the late 1990s, and was facing major financial problems, not to mention allegations of false reporting. Levy helped restructure the business, selling off some key entertainment assets, and enabled the firm to become strong again.
Though more recently shareholders have been getting tetchy because of the underperformance of the group’s French mobile business SFR, which has been struggling to battle some tough new competition of late. And despite recording an annual profit in 2011, investors were unhappy when the firm said earnings were unlikely to grow for at least two years because of SFR’s struggles.
The exact nature of the “disagreement regarding strategic direction” is not known, though it’s thought disagreements are mainly between Levy and the firm’s Chairman Jean-René Fourtou, and may relate to SFR’s fortunes. A US court ruling earlier this week relating to a decade old legal dispute with US-based Liberty Media (relating to those allegations of false reporting) may have also added to stresses, Vivendi having been ordered to Liberty 765 million Euros. The French firm plans to appeal.
Though, commenting on Levy’s sudden departure, a source told Reuters: “It’s not Jean-Bernard’s record, it’s not the situation at Vivendi, it’s not even the situation at SFR that’s the problem, it’s the future of the group”.
Confirming Levy would depart, Vivendi said in a statement last night: “A Vivendi Supervisory Board was held this June 28. Jean-Bernard Lévy is stepping down as Chairman of the Management Board following a divergence of views on the strategic development of the Group. The Supervisory Board wishes to thank Jean-Bernard Lévy for his contribution over the last ten years alongside Jean-René Fourtou”. The firm’s Legal Counsel Jean-Francois Dubos will take over from Levy, for the time being at least.
The change in leadership at Vivendi isn’t likely to have any major impact of Universal Music, or its bid to buy the EMI record company, which, insiders say, still has the full support of the group’s board.