Vivendi shakes up pay-TV unit

LONDON - Vivendi Universal is slashing the workforce of its unprofitable pay-TV unit Canal+ as the French media giant struggles to satisfy ambitious financial commitments it made to analysts when it announced its three-way merger with Seagram.

The move is understood to be part of an attempt by CEO Jean-Marie Messier to make the loss-making division turn a profit.

Canal+ is Europe's biggest pay-TV operator with 15.6m subscribers, but it has a number of loss-making operations in markets where it faces tough competition. This includes its recently merged Italian operation, Italian Telepiu, which joined with News Corporation and Telecom Italia's joint venture Stream because the market was not big enough for the two of them.

The group is said to be pursuing similar mergers in other European territories and is in talks with Dutch-based UPC about merging their Polish operations.

Canal+ in France is also suffering from stagnating subscriber numbers in the face of the rising cost of soccer broadcasting rights, which is a major driver for pay TV.

It is making a series of changes to its programming line-up including scrapping live studio show Nulle Part Ailleurs, which has had a primetime slot for 14 years.

Historically, the show was a new-subscriber magnet but it had become expensive to produce and its ratings have declined.

The overhaul will include shedding 71 staff as Canal+'s French TV station merges its newsroom with that of i-Television, an all-news channel launched in 1999. Around 35 jobs are expected to go from internet unit, CanalNumedia.

Vivendi said it did not expect to make any redundancies as it will seek to redeploy the staff in other parts of the group.



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