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Annual Report -
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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 27. Contractual obligations and other commitments
(b)
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 five-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.
(c)
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.
Canal+ Group has implemented a number of these injunctions, some of which since July 23, 2012 and others since October 23, 2012, mainly
focusing on:
acquisition of movie rights:
–– by limiting the duration of output deals to three years, requiring separate agreements for different types of rights (1st pay-TV window,
2nd pay-TV window, series, etc) and prohibiting output deals for French films, and
–– by divesting its interest in Orange Cinema Series – OCS SNC or by adopting measures limiting its influence on Orange Cinema Series – OCS
SNC (please refer to Note 27.5 below);
distribution of pay-TV channels:
–– by the distribution of a minimum number of independent channels, the distribution of any channel holding premium rights, and by drafting
a model distribution deal relating to independent channels included in the Canalsat offer,
–– by the obligation to promote, in a transparent and separate manner, the distribution of exclusive independent channels on each owned
platform serving more than 500,000 subscribers, and
–– by making all its own movie channels distributed by Canal+ Group (Cine+ channels) available to third-party distributors (unbundling);
Video On Demand (VOD) and subscription video on demand (SVOD):
–– by separating contracts entered into for the purchase of VOD and SVOD rights on a non-exclusive basis, and not combining them with rights
purchased for linear distribution on pay-TV,
–– by offering Studiocanal’s VOD and SVOD rights to any interested operator, and
–– by forbidding exclusive distribution deals for the benefit of Canal+ Group’s VOD and SVOD offers on Internet Service Providers platforms.
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.
Moreover, Vivendi granted a counter-guarantee, in favor of TF1 and M6 to assume commitments and guarantees made by TF1 and M6 in
connection with some of the contractual content commitments and other long term obligations of TPS and other obligations recognized in the
Statement of Financial Position of TPS. As of December 31, 2012, the remaining amount of these commitments was not significant and the
counter-guarantee expired on January 4, 2013.
(d)
In connection with the divestiture of Canal+ Nordic in October 2003, Canal+ Group has retained distribution guarantees given in favor of Canal
Digital and Telenor Broadcast Holding by a former subsidiary, which guarantees are covered by a counter-guarantee given by the buyers.
(e)
As part of the divestiture of NC Numéricâble on March 31, 2005, the Canal+ Group granted specific guarantees with a €241 million cap (including
tax and social risks). Specific risks relating to cable networks used by NC Numéricâble are included in this maximum amount and are counter-
guaranteed by Orange up to €151 million.
