On Friday, April 2, the nearly year-long bid by former Vice President Al Gore and his business partner Joel Hyatt to buy TV channel Newsworld International, or NWI, from Vivendi Universal-which looked like a done deal a few days before-stumbled into the twin state of which Mr. Gore must have had his fill: uncertainty and dispute.
The Observer reported that Mr. Gore was on the home stretch to a new career as a mini media mogul when an important investor balked. Vivendi Universal Entertainment could not agree to sell the property to Mr. Gore and his group for some $70 million as planned, and by Tuesday morning one well-placed source inside Vivendi called the deal “dead.”
But by late in the day a close friend of Mr. Gore’s called The Observer to insist that the acquisition was still kicking: “Negotiations are moving forward,” the friend said. A Vivendi source confirmed that Mr. Gore and his group “may have found some other financing. It may still be alive.”
Suddenly the 2000 butterflies were flying once more: Did Mr. Gore win, or didn’t he?
Spokespersons for Mr. Gore and Vivendi Universal declined to comment. When asked on Friday whether the deal had died, Mr. Hyatt said, “No,” followed by a curt, emphatic “no comment.” Mr. Hyatt was still hard at work: According to a well-placed source, Mr. Hyatt made a last-minute plea to a number of high-net-worth investors in recent days, sending out business plans along with an apologetic note asking that they respond quickly with money.
When reached on Tuesday, April 6, Mr. Hyatt said that reports of the deal’s demise were “inaccurate.”
He then added a defiant “no comment.”
Mr. Hyatt, co-founder of Hyatt Legal Services, a national chain of legal clinics, has funds of his own and is well-connected in investment circles. Mr. Hyatt raised funding for Mr. Gore’s 2000 Presidential campaign. He’s now a business professor at Stanford University.
Presently, NWI has carriage in about 20 million homes, and packages “foreign newscasts originally broadcast in countries such as Germany, Japan, Canada and the European community,” according to its Web site. Mr. Gore’s group has made plans to transform the channel into a 24-hour news, documentary and public-affairs channel geared toward twentysomething viewers. They have also insisted that the network would not be a weapon to fight Rupert Murdoch’s Fox News. In April 2003, Mr. Hyatt purchased a Web site called V.tv from the .tv Corporation, prompting speculation that Mr. Gore’s channel would be called VTV. The company’s Web site listed Mr. Hyatt as the representative of Mr. Gore’s holding company, INDTV L.L.C., registered in Stanford, Calif.
Should the deal with Vivendi fizzle, there is at least one other way that Mr. Gore could acquire NWI. Once the Universal properties merge with NBC, chief executive Bob Wright could decide to sell the property to Mr. Gore under new terms and conditions, perhaps with NBC taking an investment of its own. NBC is currently awaiting final approval from the Federal Trade Commission to merge with Universal Entertainment, which includes USA Networks, the Sci-Fi Channel and Universal Studios. That is expected to be complete in May or June. If Vivendi doesn’t sell NWI to Mr. Gore, then it would automatically become part of NBC Universal and the new management would be responsible for it.
How interested NBC Universal will be in owning NWI is not clear-after all, it already owns CNBC and MSNBC. And an NBC source said the company wasn’t “expecting this to be part of the assets they acquired” after the deal was approved.
Mr. Gore’s acquisition of NWI had seemed imminent. Even the Canadian Broadcasting Company, which is under contract with NWI to provide programming, was apparently taken by surprise that the deal had stalled. “There were still a couple of things to be worked out, but none of it sounded catastrophic,” a CBC spokeswoman told The Ottawa Citizen on Monday.
In any case, proceeds from the sale of the digital cable channel will go to the newly formed entity, NBC Universal. Since that merger was announced, Vivendi has worked outside of that deal to sell NWI to Mr. Gore. As The Observer originally reported, Mr. Gore had approached Vivendi’s chief executive, Jean-René Fourtou, through France’s president, Jacques Chirac, in hopes of getting a better price. That earned him a meeting last summer with Universal Television executives and Vivendi’s chief operating officer.
But the deal was put off as the company prepared to sell the rest of its Universal Entertainment assets to NBC. Until about three weeks ago, former NWI owner and InterActive Corp. chief Barry Diller held up the proceedings while he resolved his own ownership issues with the Universal properties, including NWI. A spokeswoman for Mr. Diller denied suggestions that he had stalled Mr. Gore’s deal to improve his own.
“It was only Mr. Gore who asked us to reconsider, given how long the process was taking,” she said. She added that “we did agree to let this asset escape … for no consideration of any kind or as part of any discussion with Vivendi.”
As news of Mr. Gore and Mr. Hyatt’s travails hit the wire, Mr. Gore’s critics- especially his right-wing critics-were feeling pretty smug. One skeptical investment banker told NYTV that it seemed unlikely that a major fiduciary would risk large sums of money on Mr. Gore’s acquisition. “These investments, if they don’t work, it’s not like you’re investing in a big pile of intellectual property,” he said. “It’s all gone out over the air waves. It’s done. You’ve got no backstop to recoup any kind of investment you’ve made.” Considering the plight of CNN, he called the cable-news business a “killing field.”
On Wednesday, March 31, when Air America launched, former Saturday Night Live writer-producer, best-selling author and new left-wing radio commentator Al Franken asked Mr. Gore on the air how his TV channel was coming along. Mr. Gore said it was too early to tell. He was prescient.