Universal Pictures International’s senior vice-president and head of legal and business affairs Andrew Hall has been with the business for nine years. During that time, Universal Pictures has changed hands several times.”I’ve not moved jobs and I’m still here four takeovers later,” he says.
Universal Pictures is a division of Universal Studios, which is, in turn, a division of NBC Universal, the media giant created by last May’s mammoth $15bn (£7.97bn) merger between General Electric (GE), the parent company of US television network NBC, and Vivendi Universal Entertainment (VUE), the US subsidiary of France’s Vivendi Universal.
On completion of the merger, VUE shareholders received $3.65bn (£1.94bn) of cash consideration, of which Vivendi Universal received $3.4bn (£1.81bn). NBC Universal assumed $1.67bn (£890m) of debt, previously included in Vivendi Universal’s financial statements. As a result, GE now owns 80 per cent of NBC Universal and Vivendi Universal controls the remaining 20 per cent.
Hall joined PolyGram in 1996, two years before the legacy company was bought by Seagram. Seagram, a Canada-based company, which already owned Universal Studios and Universal Music, bought PolyGram’s record and fledgling film business. After the takeover, Seagram dropped the PolyGram name. Meanwhile, it sold off most of PolyGram Filmed Entertainment to a number of different media companies, including Carlton, and merged the remaining assets with Universal Studios.
In 2000, Hall was promoted to head of legal at Universal Pictures, when Universal Studios (which already owned Universal Pictures), and Universal Music were bought by Vivendi.
Today, Universal Pictures handles all of Universal Studios’ distribution work outside North America and is a truly global business with 14 operating companies in 26 countries, including: Australia, Brazil, the Czech Republic, Hungary, Japan, Korea, Mexico, New Zealand, Poland, throughout Western Europe (apart from Greece) and one is being set up in Russia. In addition, distribution licences are handed out to local operators in some 90 countries.
As well as marketing, selling and distributing between 15 and 18 movies a year for Universal Studios, Universal Pictures distributes films made by independent production companies. According to Hall, the division has experienced a huge growth in this ‘local acquisitions’ part of the business.
“We go out into the market and buy film, theatrical, video and TV rights from small, independent film production companies and distribute them in territories where we think they’ll sell,” explains Hall.
Universal Pictures has built up a profitable niche practice distributing specialist products that go straight to video and DVD, such as fitness videos, stand-up comedy shows featuring the likes of Jack Dee and interactive DVDs. This part of the business generates a significant proportion of Universal Pictures’ revenues.
“Most companies are American, but Korea, for example, produced some enormously successful local film products. This has resulted in a big growth in terms of legal work, as we close about 150 international deals a year,” says Hall.
Given the size and nature of Universal Pictures’ business, it is quite staggering that its in-house legal function is so tiny. There are just eight lawyers in the division’s London head office who handle virtually all of the division’s international distribution and licensing work and draft almost all of the manufacturing, marketing and distribution agreements. Additionally, there is a separate team of three lawyers which is dedicated the largely UK-based video business, serving the 90 employees in that part of the business.
Outside London, Hall’s team comprises two lawyers based in France and the Netherlands, as well as two legal consultants based in Germany and Australia who support the local businesses in those jurisdictions.
Due to Universal Pictures’ continued expansion, Hall is hoping to grow his team further. “We’ve got to the stage now where our Japanese operation, which only opened three years ago, is now our second-biggest operation and we’ll need to recruit another lawyer there,” says Hall. “We’ve not yet decided whether to localise or centralise. In the past five years we’ve increased the head office team from four to eight lawyers and one has been here since 2000.”
Because Universal Pictures’ legal team handles virtually all of the division’s legal work in-house, Hall tends to instruct external lawyers when he needs expert advice. “We outsource very little work, but sometimes instruct firms on specialist matters,” he says.
Olswang partner Tony Leifer handles entertainment law work and is currently advising on a suite of brand new precedent agreements for Universal Pictures. Meanwhile, Clintons partner Stephen Joelson and Denton Wilde Sapte partner Gilla Harris handle litigation and employment matters respectively. Additionally, some general commercial work is farmed out to Charles Russell.
Having survived four takeovers, it comes as no surprise that Hall ends the interview on a very cheery note. “The feeling here is that we’re really proud of being part of GE, one of the best companies in the world, and that it wants to keep hold of us for the long term,” Hall concludes.
Head of legal and business affairs
Universal Pictures InternationalUniversal Pictures International
|Organisation||Universal Pictures International|
|Pre-tax profits (for NBC Universal):||$2.5bn (£1.33bn)|
|Annual legal spend:||Approximately $750,000 (£398,000)|
|Head of legal and business affairs||Andrew Hall|
|Reporting to||Universal Studios head of legal Maren Christensen|
|Main law firms||Charles Russell, Clintons, Denton Wilde Sapte and Olswang|