Vivendi Says New CanalPlus Subs Rose in September After Report Triggers Stock Drop
The company's shares fell after a newspaper article claimed new subscriptions at CanalPlus were down 10 percent and pointed the finger at Vivendi chair Vincent Bollore's executive shake-up.
French media giant Vivendi has refuted claims made in a report by national newspaper Le Parisien of weak subscriber trends at pay TV division CanalPlus that helped trigger a sell-off in the conglomerate's stock.
The article, entitled "The Fall of the House of CanalPlus," published over the weekend, sent shares of the media company down on the French stock market on Monday. Le Parisien claimed subscriptions at CanalPlus fell 10 percent year-over-year in September. Vivendi denied this late Monday and on Tuesday said new subscription numbers rose last month. It said the figure was "actually up by 20 percent" compared to the same period in 2014.
Its statement on Tuesday was aimed at mitigating the "negative impact" on its share price, the company said. However, Vivendi would not disclose its churn rate or the net change in the overall number of subscribers to business newspaper Les Echos.
Following the close of the market on Monday, Vivendi had said it was preparing a complaint against the newspaper for "the spreading of misleading information negatively affecting its share price."
Vivendi, headed by chair Vincent Bollore, saw its stock drop more than 3 percent during Monday's trading session before finishing down 2.12 percent at $24.37 (€21.41).
The Le Parisien article, published on Oct. 18, cited unnamed "internal sources" saying that the company was losing subscriber momentum. That the alleged problems came in the same month that saw CanalPlus air the Rugby World Cup, which tends to draw big audiences in France, as well as the new season of its flagship drama Les Revenants was touted in the article as a major sign of weakness.
The article also cited an internal study it had obtained, noting that CanalPlus subscribers often sign up because they feel the channel shares their personal values and that with subscriptions falling "the worst is to be feared in the coming months, and the winter looks tough." The article then noted that the company would not respond to requests for confirmation or comment.
The newspaper quoted an internal source as saying: "These signs are catastrophic. The audience has come to see Canal as impertinent."
The article appeared to be a particular dig at Bollore, who cleared internal ranks over the summer, replacing several executives, threatened to ax popular satirical sketch program Les Guignols de l'Info because of what was rumored to be unfavorable portrayals of political allies and reportedly censored documentaries about bank Credit Mutuel and the rivalry between current and former presidents Francois Hollande and Nicolas Sarkozy, the latter of whom is a longtime Bollore ally. The government is now looking at legislation to ensure the editorial independence of channels after the incidents.
After pressure, Bollore acquiesced on Les Guignols, though he replaced the writing staff and followed up by quickly overhauling the flagship news talk program Le Grand Journal. He ousted comedian host Antoine de Caunes and handpicked the more serious Maitena Biraben, switching production companies along the way.
The ratings have been on the decline. Le Grand Journal's audience has fallen precipitously since the departure of de Caunes, from a 1.1 million average in 2014 to just 637,000 average since its season premiere in September.
Sports show Canal Football Club is also down significantly in the ratings, from an average 1.5 million viewers in 2014 to just 734,000 on Oct. 11, the last episode for which ratings were available.
Le Parisien reported that due to the falling ratings, ad rates have also declined drastically. It cited numbers for Le Grand Journal, noting a 30-second spot on the program went for $23,213 (€20,400) a year ago and just $20,254 (€17,800) last month. It said that projected rates for Jan. 2016 are said to be $12,858 (€11,300) per 30 seconds, which will lead to a significant blow in Vivendi's revenue next year.