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Annual Report -
2013
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Vivendi
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Financial Report | Statutory Auditors’ Report on the Consolidated Financial Statements | Consolidated
Financial Statements | Statutory Auditors’ Report on the Financial Statements |
Statutory Financial Statements
Note 23. Financial Commitments and Contingent Liabilities
Note 23.
Financial Commitments and Contingent Liabilities
Vivendi has given a number of commitments in various forms on its own
behalf and on behalf of its subsidiaries, the most significant of which
are described below:
Universal Music Group
As of December 31, 2013, the guarantee given to Commonwealth
Atlantic Properties, assumed by Vivendi pursuant to the merger
with Seagram, covering rent payable by UMG and expiring on
May 1, 2015, had a residual value of $12 million.
As of December 31, 2013, in addition to standard comfort letters,
Vivendi provided guarantees of an aggregate value of approximately
€5 million to several banks which granted credit facilities to certain
UMG subsidiaries to cover working capital requirements.
Vivendi provided certain UMG companies with guarantees to cover
their third party commitments.
Canal+ Group
As part of the French Competition Authority’s approval of the
acquisition of the Direct 8 and Direct Star channels (renamed D8
and D17, respectively) on July 23, 2012, Vivendi and Canal+ Group
undertook certain commitments. These commitments provide
for restrictions on the acquisition of rights for American movies
and television series from certain American studios and for
French movies, the separate negotiation of certain rights for
pay-TV and free-to-air movies and television series, limitations
on the acquisition by D8 and D17 of French catalog movies from
Studiocanal, and the transfer of rights to broadcast major sports
events on free-to-air channels through a competitive bidding
process. These commitments are made for a 5-year period,
renewable once if the French Competition Authority, after having
performed a competitive analysis, deems it necessary. In addition,
on September 18, 2012, the French Broadcasting Authority (Conseil
Supérieur de l’Audiovisuel) approved the acquisition of these
channels, subject to certain commitments relating to broadcasting,
investment obligations, transfer rights, and the retention by
Canal+ Group of the D8 shares for a minimum period of two and
a half years.
On December 23, 2013 the French Council of State annulled the
decision of the French Competition Authority approving the
acquisition of the D8 and D17 channels, with a postponed effect
as from July 1, 2014. The French Council of State raised an issue
regarding an error of judgment in relation to a specific commitment
on the second and third windows for free-to-air French films.
On January 15, 2014, Vivendi and Canal+ Group submitted a new
notification to the French Competition Authority in respect of the
acquisition of the free-to-air channels D8 and D17. However, the
D8 and D17 channels continue to broadcast their programs as
the decision of the French Council of State did not challenge the
acquisition of these channels.
On August 30, 2006, the TPS/Canal+ Group merger was authorized,
in accordance with the merger control regulations, pursuant to a
decision of the French Minister of Economy, Finance and Industry,
subject to Vivendi and Canal+ Group complying with certain
undertakings for a maximum period of six years, with the exception
of those commitments concerning the availability of channels and
VOD, which could not exceed five years. On October 28, 2009, the
French Competition Authority opened an enquiry regarding the
implementation of certain undertakings given by Canal+ Group
in connection with the merger of CanalSatellite and TPS.
On December 21, 2012, the French Council of State rejected Vivendi
and Canal+ Group’s filed motions requesting the annulment of the
French Competition Authority’s decisions of September 20, 2011
and July 23, 2012. Under the first motion, the €30 million fine
imposed on Canal+ Group was reduced to €27 million. Under the
second motion, the transaction was cleared once again, subject to
compliance with 33 injunctions.
These injunctions are imposed for a period of five years, renewable
once. At the end of the five-year period, the French Competition
Authority will review the competition situation to determine
whether the injunctions should be kept in place. If market conditions
have changed significantly, Canal+ Group will be able to request
that these injunctions be waived or partially or totally revised.
An independent trustee, proposed by Canal+ Group and approved
by the French Competition Authority on September 25, 2012, will be
responsible for monitoring the injunctions implementation.
