Remember earlier this month when Gavin told you about Vivendi being greedy and taking $400 million from Activision-Blizzard so that they can invest it elsewhere? Well, it’s actually closer $3 billion.
Vivendi, who owns a 61% stake in Activision-Blizzard, wants to pay down its €13.19 billion debt in order to avoid a credit downgrade. As explained by Forbes:
On July 9th, five years after the merger of Activision and Vivendi’s Blizzard division, Vivendi gained the right to force Activision to pay a special dividend without permission from non-Vivendi directors on the Activision board.
While Activision has about $4.3 billion on the books, $2.7 billion is held out of the US of A – repatriating that money would trigger taxes to the tune of about $1.5 billion. Lovely. This means that Activision will probably have to take on debt in order to pay the dividend. Of the $3 billion, $2 billion will go straight into the Vivendi coffers (the rest, presumably, will go to stock holders).
While Bobby Kotick may want to buy Vivendi out rather than see his accounts plundered, it’s unlikely that Vivendi will be willing to sell Activision before using it’s controlling stake to pay down its own debts.
Activision-Blizzard is still in a strong position, and Kotick has avoided the major layoffs that have become all too familiar lately. I bet that they can actually handle some extra debt without experiencing major financial hardship – the dog from the new COD can probably come and rescue them. That said, numbers are declining in WoW, and I seriously doubt that microtransactions will save them, there. This is when I appreciate Kotick’s hard-nosed mentality and hope that he can keep everything together – so many gaming companies are going through such hard times, it would be a shame if Activision-Blizzard had to suffer through no fault of their own.
On a side note, $4.3 billion just sitting in their accounts?! That’s a lot of COD!
Last Updated: July 23, 2013
Admiral Chief Groot Wors
July 23, 2013 at 10:08
Greedy bastards.
Admiral Chief Groot Wors
July 23, 2013 at 10:08
Excuse me while I go vomit
Admiral Chief Groot Wors
July 23, 2013 at 10:09
Header lulz too, fatcat moolahcat
Blackhawk
July 23, 2013 at 10:20
Yep, that’s one phat feline right there. Love it! 😀
Admiral Chief Groot Wors
July 23, 2013 at 10:22
Don’t you mean PHAT PHELINE YO?
Blackhawk
July 23, 2013 at 13:31
Nah, homes, that’s one ph too phar….
Mark Treloar
July 23, 2013 at 14:16
Catnip dealer
OVG
July 23, 2013 at 10:15
Would you like chips with your COD?
Admiral Chief Groot Wors
July 23, 2013 at 10:22
“Sold separately”
Argentil
July 23, 2013 at 10:20
Well, there were rumours that Vivendi wanted to sell ActiBlizz – but it’s far too valuable/expensive for purchase. This could be a ploy to depreciate its value and sell it off.
Weanerdog
July 23, 2013 at 12:09
They have been trying to sell their stake for some time but the price was just too high.
RinceWind
July 23, 2013 at 10:23
Maybe they can add microtransactions to their daily routine in the office? “Need another pencil son? $5. Want to open the blinds Shela? $10” Could work!
OVG
July 23, 2013 at 10:27
They do that anyway. Jason West was caught with an Activision pen at security and was locked out of his office.
TiMsTeR1033
July 23, 2013 at 10:29
what!?! serious?
OVG
July 23, 2013 at 10:32
Only Joking :p It was a pencil.
RinceWind
July 23, 2013 at 10:34
Back in your box troll!
OVG
July 23, 2013 at 10:36
That is what Bobby told the ex-Infinty Ward boss
Tarisma
July 23, 2013 at 10:26
Welcome to big business. This kind of stuff happens all to often.
Also wow has declining numbers but it still had like 9 million active players… That’s quite a lot considering I think GW2 is the next biggest mmo with 3 million copies sold. Note that’s just sold not active players. (Someone may need to check these facts)
HvR
July 23, 2013 at 10:44
yes and then out of nowhere there is cash flow problems a whole bunch of developers gets retrenched (and lucky if they get the leave paid out) while the executive with their MBA gets golden handshakes without ever doing anything for the industry.
Dean
July 23, 2013 at 10:47
There’s an old analogy with that in mind. When a rowing team loses the race, cost cutting measures need to be taken so they fire 4 oarsman, sell a further oar and hire a second skipper.
So the team is two oarsman, one oar and two guys shouting commands.
Tarisma
July 23, 2013 at 10:47
How the work works.
MBA’s were one of the major contributing factors to the current recession. South Africa was lucky that a lot of out top execs have CA’s so they could “see” the financial downturn coming and prepare for it.
HvR
July 23, 2013 at 10:56
They are probably better but I’ve seen CA’s on executive level make the most horrendous decisions, normally where they can make the numbers work regardless if the numbers are in any way in tune with reality.
In the majority of cases where the founders of a company is no longer involved on a executive of board level the company either declines slowly, implodes spectacularly or gets assimilated into the bigger parent company to the detriment of the consumer.
Tarisma
July 23, 2013 at 11:04
Still I prefer corporates to owner managed. I cannot handle constant management override. Basically you have lost every argument before you start. At least when there are shareholders there are more often better business procedures in place.
Trevor Davies
July 23, 2013 at 11:17
I think we have opposite work experiences – my situation is completely reversed hehe.
Trevor Davies
July 23, 2013 at 10:30
Ah… business ethics.
Tarisma
July 23, 2013 at 10:32
Remember to draw the ethical line in pencil.
Trevor Davies
July 23, 2013 at 10:45
You don’t put it in writing heh
Tarisma
July 23, 2013 at 10:48
Well in pencil you can just rub it out and move it if need be.
HvR
July 23, 2013 at 10:41
Next week next they fire all the developers from their smaller teams and lock up the IP for the next 5 years to “stream line” the business during “tough” economic times
The week after they hire a person with a MBA that played super mario in the 90’s and programmed “hello world” in their first year of varsity to “reallign” the business to the “needs of the gamers” at the 10 times the salary of the a developer. If they can get a women extra points for them for gender equality.
This is what is wrong with the industry.
Tarisma
July 23, 2013 at 10:51
That’s unfortunately how all industries work. And the reason why after I’m done with my CIMA ill be doing an MBA
HvR
July 23, 2013 at 10:59
Good luck MBA is only half the requirement the other half is who you know or are related too. Go look at the surnames of the executives and board members of listed companies and see how many you can pair up.
It is the new royalty and upper class where “business management skills” is a birth right.
Ultimo_Cleric N7
July 23, 2013 at 10:44
Disgusting……
OVG
July 23, 2013 at 10:44
KARMA is a bitch
Unavengedavo
July 23, 2013 at 14:01
You named your dog KARMA?
OVG
July 23, 2013 at 14:02
LOL
OminousRain
July 23, 2013 at 10:49
I have an idea. War Craft 4
Verrayne
July 23, 2013 at 13:11
http://wow.joystiq.com/2012/03/02/blizzard-layoffs-could-mean-many-things/
Blizzard laid off 600 employees last year…
And it’s much better to keep that money in Europe than try to bring it to America and get taxed on it.