ANY UNIVERSAL APPEAL? SOME DOUBT ANYONE WOULD SNAP UP PARK, STUDIO.

Byline: Greg Hernandez Staff Writer

Struggling Vivendi Universal, which reported a catastrophic first-half loss Wednesday, is planning to put several of its big-name assets up for sale to reduce its massive debts - including its publishing company Houghton Mifflin and possibly its stake in EchoStar Communications Corp.

But will Vivendi, a French utility transformed into the world's second- largest media company, also resort to putting on the block such assets as its U.S. theme parks, film studio and music company?

Analysts said Wednesday that it will not be easy for Vivendi to sell some of those major holdings, given the current economic climate that has other conglomerates like The Walt Disney Co. and AOL Time Warner plagued with financial troubles of their own.

``It's interesting that when the tide goes out, all the boats go with it,'' said David Joyce, an analyst with Guzman & Co. ``Vivendi would not be getting full prices because people realize that while there are some good assets, they do have some near-term liquidity issues.''

But Paul Kim, an analyst with Kaufman Bros. in New York, is more pessimistic.

``Any kind of U.S. entertainment assets they'd like to get rid of but there are literally no buyers for any of these assets unless the price is a fire sale,'' Kim said. ``Every potential buyer is also in financial straits. I really don't know who would buy it.''

Kim points to the lack of success MGM had earlier this year when 80-percent owner Kirk Kerkorian briefly explored putting the company up for sale with an asking price of $7 billion. There were no suitors.

Vivendi, under the leadership of recently ousted CEO Jean-Marie Messier, made a series of multibillion-dollar acquisitions in recent years, including the 2000 purchase of Seagram and its Universal movie, music and other media units in a $34 billion stock purchase.

In addition to Seagram and Universal, Messier bought other media properties including Canal Plus, Europe's largest pay-television company, as well as USA Networks Inc., owned by media mogul Barry Diller. As part of the deal, Diller was installed as chief executive of Vivendi Universal Entertainment.

The holdings include Universal Studios Theme Park, in both Universal City and Orlando, Fla., while the music division's record labels include such artists as U2 and Eminem.

Universal's movie studio is in fifth place in domestic box-office receipts for 2002 behind Sony, Twentieth Century Fox, Disney and Warner Bros. Its most recent hit has been ``The Bourne Identity,'' which had grossed $114.7 million as of Sunday. There are high hopes and positive buzz for its newest release, ``Blue Crush,'' which will bow in theaters nationwide Friday.

Guzman speculated that Diller himself could seize the opportunity to become involved in some kind of purchase.

``Barry Diller has a lot of influence and connections, and it's plausible that he would try and put together a group and do some kind of management buyout with some partners,'' Guzman said.

When the possibility of Walt Disney acquiring Universal's properties was raised to Thomas Staggs, CFO of The Walt Disney Co., Staggs said, in an interview with Reuters, that it was something Disney would consider but only if it were ``not dilutive to the earnings or the cash flow.''

Disney's theme parks and resorts division, which includes Disneyland in Anaheim and Walt Disney World in Florida, saw revenue drop by 5 percent in the third quarter. The ongoing slump in its theme-park business has spilled over to the fourth quarter, where bookings are currently down by 10 percent compared with a year ago.

But Guzman said major media players like Disney can't be completely counted out if they think the price is right.

``Even though the media companies seem to be in dire straits, they are actually generating free and clear earnings,'' he said.

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Photo:

(color) At the gates of Universal Studios Theme Park in Universal City, a sign of bad times: an offer of free admission for a year for a fee of $14, added to the purchase of a regular ticket.

David Sprague/Staff Photographer