Master Of The Universe

Anyone who believes in handwriting analysis should consider the case of Jean-Marie Messier. As a cash-strapped student in the late 1970s, Messier applied to the French oil company Total for a scholarship to Harvard Business School. But, as Messier tells it in his 2000 autobiography, j6m.com, one look at his cramped script convinced the company's experts that the young man "lacked the necessary drive and ambition" to make it in the rugged world of international business. Messier never got to Harvard, but he did go on to become France's most celebrated CEO, a major global entrepreneur and — in the language of the video games that occupy one corner of his vast communications empire — a master of the universe.

In just five years, this soft-spoken executive with his Kennedyesque shock of hair has transformed a venerable French water company into one of the world's most powerful media giants. When Messier, now 44, took over as chairman of Compagnie Générale des Eaux in 1996, the 143-year-old firm was a collection of more than 2,700 divisions and subsidiaries. In one of them — Canal Plus, France's first pay TV channel — Messier apparently saw the beginnings of a global media empire for the 21st century.

Through partnership, merger and acquisition, Messier turned the water company into Vivendi Universal, a sprawling conglomerate with profits last year of $6.3 billion on revenues of $46.1 billion. He introduced the Vivendi name — devised by corporate identity experts to suggest life and vitality — in 1998 and added "Universal" after last year's acquisition of Seagram and its Universal film studio. A transatlantic empire combining film, music, TV, publishing and digital delivery systems — from television and computer screens to mobile phone handsets — Vivendi Universal ranks among the world's largest communications groups.

But Messier is not content for Vivendi Universal to be a European also-ran in a U.S.-dominated race for the digital future. He wants to win. And, in the winning, he plans to determine what that future will look like, how people around the world will get their information and entertainment — and exactly what that content will be. So last year, in addition to scooping up Seagram for $34 billion in stock — thereby giving Vivendi a major foothold in Hollywood and ownership of the world's biggest music company — Messier also bought MP3.com, one of the world's top online music distribution services, for $372 million and publisher Houghton Mifflin for $2.2 billion, which instantly made Vivendi the world's No. 2 educational publisher. Most recently Vivendi and Sony Corp. announced an agreement to distribute their joint-venture online music service, Pressplay, via Microsoft's MSN network.

While this might look like a North American buying frenzy, Messier contends that there has been a cool rationality to his every move. "It's true that the creation and evolution of Vivendi, and now Vivendi Universal, has been very rapid and ambitious," Messier told Time. "But it's also been logical. The structure of the company is fairly simple. It's a content provider seeking world leadership in a growing number of fields." And as the chairman told an audience at an industry gathering in Cannes earlier this year, "Vivendi Universal will be the world's preferred creator and provider of personalized information, entertainment and services to consumers anywhere, at any time and across all distribution platforms and devices."

Stéphane Lissner, general director of the Aix-en-Provence opera festival (of which Messier is president) and a personal friend, puts it more bluntly: "He wants to become No. 1 in the world very quickly. He's not a megalomaniac, but he is like a builder who wants to create the biggest, most beautiful building in the world."

Of course, Messier has plenty of rivals with similar building plans: AOL Time Warner (parent of Time's publisher), Bertelsmann, Disney, News Corp. and Viacom, all with their own well-honed strategies and ambitions, and all making moves in recent months to bolster their positions. In the past week alone, AOL Time Warner gained a major European foothold by agreeing to pay $1.6 billion for Britain's IPC publishing group, with its 100 magazine titles, and announced a $100 million investment in Amazon.com, the troubled U.S. online bookseller. Disney paid $5.3 billion for Fox Family Worldwide, the pay-TV programming unit jointly owned by News Corp. and Saban Entertainment. News Corp., in turn, won FCC approval for its $5.4 billion purchase of Chris-Craft industries, which is likely to give Rupert Murdoch control of two major TV stations in New York and two in Los Angeles. Meanwhile, Bertelsmann's Random House subsidiary made a joint bid with Classic Media to acquire the assets of bankrupt Golden Books for $86 million.

For years most media companies have either concentrated on content (like films, books or music) or on distribution (cable and satellite systems). Now, and especially since AOL's acquisition of Time Warner — the Internet-cable-film-TV-print-music deal that made Messier say "nothing in the world of communications would ever be the same again" — most major players recognize that the future likely belongs to those who own both. "Being strong in content is not enough," says Messier. "You also need to own part of your distribution network."

Right now, that strategy seems to be paying dividends. Just this past week, Vivendi Universal reported stronger than expected second-quarter earnings, results that sent its previously depressed stock price surging. "The results," Messier said in a statement, "confirm the robustness of our business, with limited exposure to advertising, the benefits of a truly global position, and the fast progress of the reorganization and implementation of our recent merger." And though Messier himself didn't point it out, he could not have been displeased that his strong second-quarter earnings closely followed Wall Street's disappointment with AOL Time Warner stock after the company reported slower growth in revenues than had been expected.

Of all his rivals, Messier is most fixated on that American media giant. "Our global reach allows us to generate about 40% of our business in the U.S., 50% in Europe and 10% elsewhere," says Messier. "Earlier this year chairman Steve Case said he wanted 50% of AOL Time Warner's business coming from international within the next decade. What that tells me is that Vivendi Universal is already 10 years ahead of what AOL considers its goal."

"No comment," is the official reaction from AOL Time Warner. Unofficially, a high-ranking insider says, "Our most vertically integrated and global competitor is News Corp. Vivendi — with its content in the U.S. and its distribution in Europe — is a ragbag of disparate assets. So far they haven't connected the dots." Some financial analysts agree. "Messier has done a great job bringing all these well-run, financially healthy businesses together, but he's yet to prove the vision he assembled them around is credible," says Audrey Mandela, general director of London consultancy Mandela Associates. "Turning a capacity for synergy into tangible results is something AOL Time Warner is just starting to achieve, so Messier has to get moving. Especially since the two groups aren't the only players out there trying to pull it off." The next year will be critical to Messier's efforts to turn potential into performance — and fulfill promises to shareholders that his integrated media giant can generate revenue increases of 10% over the next two years, and new business revenues of nearly $1 billion by 2002.

Though he relishes his role as a Frenchman who can take on the Yanks at their own game, Messier sees himself more as a global player than a nationalist. "Today you have an entire new generation of French business people acting and thinking of globalization as a given," he says. "I have a French passport and strong French roots. But I am managing a global group. I am not crusading for l'exception fran-ĉaise." Indeed, in a gesture that is both practical and highly symbolic, Messier plans to move into a 530-sq-m apartment on New York's Park Avenue in September to be closer to the company's core business.

The son of an accountant from Grenoble, Messier graduated from the prestigious Ecole Polytechnique in 1979. He went on to the Ecole Nationale d'Administration, the traditional finishing school for France's government and business élites, and rather predictably joined the Finance Ministry. Four years later, at age 29, he was chosen to oversee the first privatizations of state companies in French history. "I followed that example by privatizing myself," quips Messier, who joined the investment bank Lazard Frères in 1989.

At Lazard Messier quickly bonded with the firm's heavyweights, among them Felix Rohatyn and Steve Rattner, impressing them with his energy and drive. "He was always doing eight things at once," says Rohatyn, who in between his stints at Lazard also served as U.S. ambassador to France. "I never had more trouble reaching one of my partners on the phone." In between phone calls, Messier, the product of the Old-World French establishment, became a disciple of New-World market-driven business practices.