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Today's deal between VU and U.S. satellite-TV outfit EchoStar is the latest example of VU's continuing expansion and directly addresses criticism Messier has received for not having sufficient distribution outlets in the U.S.

MESSIER CLEANS UP

VU Chief Still Feeling Urge to Merge
Taking three large, disparate companies and forming a global media powerhouse might be enough for some people, but apparently not for Vivendi Universal chief Jean-Marie Raymond Pierre Messier.

After buying Seagram last year (following that company's successful digestion of PolyGram) and putting it together with Vivendi and French pay-TV outfit Canal Plus—a three-way merger notable for its swiftness as well as its size—Messier is still adding pieces to his empire, emulating the new synergy-driven, vertically integrated blueprint for mammoth media companies established by AOL Time Warner.

Today's deal between VU and U.S. satellite-TV outfit EchoStar is the latest example of VU's continuing expansion and directly addresses criticism Messier has received for not having sufficient distribution outlets in the U.S. And, if a proposed deal with Barry Diller goes through under which VU would purchase the entertainment assets of Diller's USA Networks (including the USA cable network and the Sci-Fi Channel), VU's American pipes would be considerably fatter.

The Echostar deal will create five new channels, including one devoted to music. EchoStar is currently the #2 satellite-TV entity in the U.S., with 6 million subscribers, but when the company acquires DirecTV as part of its purchase of Hughes Electronics (which the VU deal will help make possible), its base will expand to 16 million—that's assuming, of course, that the deal passes muster with the feds. The arrangement, which runs for eight years, has the French media giant investing $1.5 billion in Echostar in exchange for preferred stock, with Messier taking a seat on the EchoStar board.

The Diller deal, meanwhile, is interesting because it includes the possibility that Diller will reconsider his decision to work only for himself and join the VU fold, overseeing film and TV operations. Such a move also would up Messier and VU's Wall Street cred, thanks to Diller's broad media experience and successful track record.

Diller probably would not consider joining forces with Messier were it not for the resignation last week of VU Vice Chairman Edgar Bronfman Jr. Relations between Diller and Bronfman, who sold Universal's television assets to Diller for $4.1 billion in 1997, are said to have soured after Bronfman invoked Seagram's veto power to block Diller from buying NBC.

Other recent stops along Messier's road to media hugeness have included the acquisition of textbook publisher Houghton-Mifflin and the consolidation of VU's Internet businesses under former MP3.com President Robin Richards.

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