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                              USA Networks, Inc.

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                            Vivendi Universal, S.A.

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          pursuant to Exchange Act Rule 0-11 (set forth the amount on which
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Additional Information


     Stockholders of USA Networks are urged to read the proxy statement when
it becomes available because it will contain important information about USA
Networks, the transactions and related matters. Investors and security holders
can obtain free copies of the proxy statement when it becomes available by
contacting Investor Relations, USA Networks, Inc., Carnegie Hall Tower, 152 W.
57th Street, 42nd Floor, New York, NY 10019 (Telephone: (212) 314-7400).
Investors and security holders will be able to obtain free copies of the proxy
statement and other documents filed by USA Networks and Vivendi with the
Securities and Exchange Commission in connection with the transactions at the
SEC's web site at

     In addition to the proxy statement, Vivendi and USA Networks file annual,
quarterly, and special reports, proxy statements and other information with
the SEC, which are available at the SEC's web site at You may
also read and copy any reports, statements and other information filed by USA
Networks and Vivendi at the SEC public reference rooms at 450 Fifth Street,
N.W., Washington, D.C. 20549 or at the SEC's other public reference rooms in
New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on public reference rooms.

     USA Networks, Vivendi and their respective directors, executive officers
and certain members of management and other employees may be deemed to be
participants in the solicitation of proxies of USA Networks' stockholders to
approve the proposed transactions. Such individuals may have interests in the
transactions, including as a result of holding options or shares of USA
Networks' stock. A detailed list of the names, affiliations and interests of
the participants in the solicitation will be contained in the proxy statement
that will be filed by USA Networks with the SEC.

Attached are a transcript of an investor and analyst conference call held by
Vivendi Universal, S.A. and a transcript of a press conference held by Vivendi
Universal, S.A.

The following is a transcript of an investor and analyst conference call held by
Vivendi Universal, S.A.

                                                               VIVENDI UNIVERSAL
                                                   Moderator: Jean-Marie Messier
                                                December 17, 2001; 6:00 a.m. EST
                                                                          Page 1


December 17, 2001
6:00 a.m. EST

COORDINATOR  Good morning, and thank you all for holding. All lines will be
placed on listen only until we're ready for the question and answer session of
today's call. I would also like to remind the parties it is being recorded. If
anyone has any objections, please disconnect at this time. I'd like to introduce
your speaker, Mr. Jean-Marie Messier. You may begin, sir. Thank you.

J.M. MESSIER  Welcome to this Vivendi Universal/USA Networks call. I'm with
Barry Diller. We are going to make short introductory remarks before taking all
your Q&A. As far as Vivendi Universal is concerned, I would emphasize that our
US strategy is definitely coming together after the recent two announcements
relating to EchoStar and USAi. EchoStar represents a clear strategic partnership
with the largest satellite US distribution platform. We made an equity
investment there. I just want to reemphasize, this is a low risk with downside
protection. This is a good swap against BSkyB, cheaper and more strategic; and
that's paving the way to a worldwide satellite distribution agreement, thanks to
our leadership in Europe in that field. We do not need to buy distribution;
content is key. But, EchoStar was a natural partner in order to achieve global
scalability in the satellite field.

          There is within the EchoStar agreement a full range of commercial
agreements, from content to technology; including channels. When you look at
them, they take all their dimensions to date with the USAi Agreement.

          On the buy of USAI Entertainment assets, I would just remind you that
this is an obvious natural fit between TV and movie productions and
distribution. The US industry is going through integration and consolidation,
even faster than many people thought a few years ago. These transactions will
give us size and scale; will allow us to integrate from movie to TV production,
and will allow us to integrate from programming to distribution. This
transaction allows us in the TV and movie field to do everything, and to have
in-house all the skills that we need.

          On the financials of the transaction, I would say that this is perhaps
quite a complex structure, but that's, obviously, a fair one on both sides,
that's the full price for USAi. But that's an attractive structure for VU.
Basically, most of the price that we are paying is the initial consideration
that Seagram in '97-'98, received from USA at the time of the first transaction.
We are paying close to two thirds of the transaction with the USAi shares that
we received at that time. The cash invested, $1.6 billion, is, in fact, the cash
received in '98, and we can say that we are buying quite significantly valued
assets that's paid off mainly directly through correlated high-value stock.

          The second point, which I think is very important, is that we are
paying with non-core, non-consolidated assets in order to get a fully
controlled, a fully consolidated business, with straightforward access to a
significant free cash flow for the benefit of the group. These are the reasons
why this transaction is very accretive to our VU shareholders. It will
represent, basically, an increase of our 2002 budget, an increase of more than
10% of the EBITDA level, more than 8% EBITDA per share; significant

                                                               VIVENDI UNIVERSAL
                                                   Moderator: Jean-Marie Messier
                                                December 17, 2001; 6:00 a.m. EST
                                                                          Page 2

accretion of the net income, $200 million, and of the net free cash flow. So the
financial is there straightforward, very favorable to VU shareholders.

          The management issue is also very important, because talent is key,
and part of the value in this business. I want to say that Barry's personal
commitment is very important in this transaction. Barry has two characteristics:
the first one is a right industry vision and the ability to implement it; the
second one, an outstanding track record in terms of cash flow goals and asset

          My job as the CEO of VU is to serve our shareholders with cash flow
growth and asset value; that's the reason why bringing in Barry Diller is very
favorable. But, also very important points management-wise is that Ron Meyer and
Stacy Snyder, who both created the rebound and the restructuring of Universal
Studios and the recent successes of the last few years, are committed to this
transaction and to Barry. The two of them gave me the indication that they
intend to renew their contract.

          The last point is the benefits of the shareholderships of Liberty
Media, which becomes a significant shareholder of VU at 3.5%. Perhaps even more
important, Liberty Media involvement shows renewed, and certainly, a growing
interest from outside-Europe investors to Vivendi Universal's story. With
Liberty Media, we have a common goal in Europe: to bring together an alliance in
the programming field, which will serve both of distribution platforms,
satellite on our side, cable on its side.

          Before turning to Barry, I would finally give you a few outlines of
the visibility for 2002. After re-expressing the fact that EBITDA-wise, our
budget of 2002, we feel definitely comfortable with what was the market
consensus before September 11th.

Second point, in 2002, we will go on with our strategy. We care about being
dominant in the content field; we care about getting operational control, and
that's what we are doing here. We care about being global, and VU is, after
this operation, the most balanced and the only truly global media company.

          2002 is going to be a growth year, and basically a year focusing on
internal growth without change of perimeter. We will continue to look for
distribution, and further distribution through commercial agreements. We will
finally pursue in 2002, beginning first half of 2002, even if this transaction
is cash financed for 2002, my clear target is to continue the reduction of the
debt and the de-leveraging of the group, with a clear target of having a debt to
EBITDA ratio well below three times.

          So these are going to be the main targets and the main focus of the
group for 2002. That being said, I'm turning to you, Barry.

B. DILLER    Thank you very much, Jean-Marie. Good morning, everyone, or good
afternoon. I'm very pleased that we've been able to make this very complicated
- though actually, when you put it down in terms of each of its points, this
transaction together. I felt for some time that the entertainment assets that
USA has, while very strong in terms of their cable distribution, their reach,
and their profitability, that in this world of convergence, they need to be
united with other assets, particularly a movie company, particularly worldwide
distribution that Vivendi Universal has.

          I think that in order to compete for tomorrow, these assets, joined
together, have the ability to do so. They are now in their rightful place, and
the company that remains USA Interactive is also a strong entity. So what this
has actually done structurally is perfect.

          As far as the entertainment assets, what is being called Vivendi
Universal Entertainment, the motion picture group has done such a superb job
over the last period that my job there will be really to support it. What I will
do in the beginning period is to integrate USA's television operations into
Universal's television operations, and then work with Jean-Marie and the other
colleagues to combine all the assets strategically, and see how much we can grow

                                                               VIVENDI UNIVERSAL
                                                   Moderator: Jean-Marie Messier
                                                December 17, 2001; 6:00 a.m. EST
                                                                          Page 3

So I'm just very pleased at this. This was, as we've said to each other, this
was not easy to do, but in the end, it's a fair and balanced transaction for
all sides. So I simply join with Jean-Marie in saying that I'm not only happy
to be part of it on the Vivendi Universal side, but USA Interactive, with a
standalone company, very well-funded with very good cash flow, has great
prospects for the future. So in both respects, I think actually we've been
able to achieve exactly what either of us would have wanted at the outset.

J.M. MESSIER  I think that being said, we are ready to turn to your questions.

COORDINATOR   Mr. Nick Bertelotti, you may ask your question, and please state
your company name.

N. BERTELOTTI   This is Nick Bertelotti from JP Morgan. Two questions. One is a
question for you, Barry. I just wondered if you can give me some guidance on how
you'll split your time between the two roles you have, which are obviously quite
demanding in themselves? The second question just confirms the deal by which
Liberty will sell its $0.27 stake in MultiThematiques. It seems as though that's
around double the price, or at least an acquisition price we have in our books,
for around early 2000 when Lagardere bought in. I wonder if you can just give me
some comment on the multiple paid and whether you think that price is

B. DILLER  As to the issue of the split of time, I don't think that you can do
it in percentages; life doesn't work that way. On some days, I will spend the
majority of my time on Vivendi Universal matters. On other days, it would be
the minority. You could, at the easiest, say it's a 50/50 split, but as we all
know, it's just not realistic to say it.

          If I look back in the last period, it is, without putting too fine a
comb on it, that is about the split of time I spent on the Interactive assets
and the Entertainment assets. But, the point that I would make about it is that
I do feel that I'll be able to equip myself in both areas without it being a
burden on either, or without diminishing either role.

J.M. MESSIER  On your second question, Nick, the price plus capital increase of
the MultiThematiques transaction with Lagardere was in the range of $220 to
$240 million. What we are offering to Liberty in the VU shares at Friday close
is representing basically $250 million; so the prices are very substantial one
with the other.

          One additional point relating to MultiThematiques: This transaction,
this buy-out of Liberty Media is clearly putting us in full control of
MultiThematiques. You have to look at it as a Step One transaction. What we have
in mind with John Malone is to look at the way we could imagine to integrate
all our programming European interests, whatever that relates to
MultiThematiques, to Universal Studios International channels, or to FlexTech,
which would create a very powerful European programming entity.

COORDINATOR  Mr. Neil Blackley, you may ask your question and please state your
company name.

N. BLACKLEY  It's Neil Blackley from Merrill Lynch. Firstly, could you just say
what has happened to the Matsushita 8% minority stake, which I thought that
they had in Universal Studios as well as Music? Also, is it possible just to
explain the deduction of half a billion on page eight of the presentation in
relation to the value of USAI Emerging Networks and USA Films? And then
finally, whilst I've got you, could you just say, Jean-Marie, what has
happened on the timing of the Beverages disposal?

                                                               VIVENDI UNIVERSAL
                                                   Moderator: Jean-Marie Messier
                                                December 17, 2001; 6:00 a.m. EST
                                                                          Page 4

J.M. MESSIER  On the first question, relating to Matsushita, what happens, just
nothing. They are still in this 8% position, relating of the studios of US
Group. We didn't change the structure there. Matsushita is only involved as an
8% owner of USG. Barry, you may want to handle your view of the value of USAI
Emerging Networks and USAI Films, and I will come back to split on that right

B. DILLER  USA Emerging Networks is, obviously, a group of businesses that we
have only recently started, and I think with anything like that, it is, of
course, hard to give any kind of hard valuation. I think that what we have
also done in terms of USA Films is that this is also a small and emerging
business. We believe actually, if anything, we've probably understated the
value just to be conservative.

J.M. MESSIER  You realize now that the Emerging Networks' value of $400 million
with an expected 41 million subscribers in `02 represents, basically, a
$10-per-subscriber value, and USAi Films being valued there at $100 million,
which is basically half this year's sales. So I think that it gives you some

          I take this opportunity just to mention that you saw slightly
different values of the deal, brought up by VU and USAi. I want to state it very
simply. There are two points where you can have a different approach in terms of
value. The first one is, do you take 30-day average or last Friday's close? The
value that we have for the deal is 10.3 at 30 days average, which for us is an
unaffected share price of USAi. If you take the Friday close, which is an
already affected USAi share price, you end up with $10.8 billion; so this is our
range: 10.3 to 10.8.

          And on the USAI side, we are making value and we are taking the value
of the USAI warrants that we are receiving. Those warrants, a significant
number of them, the first 5% of the USAI capital, are close to being in the
money at $27.50. There is a total of more than 24 million of those. You have
another 24 million at $32, and 12 at $37. We estimate the market value of those
warrants at $800 to $900 million.

          USAi, not taking into account the value of these warrants, ends up
with a slightly higher range than ours. There are no other value differences
than 30 days average or closing price, taking into account or not the value of
the warrants. Obviously, for all shareholders receiving those very significant
amounts of USAi warrants, part of them quite close to being in the money, adds
a value that we do take in account in the global value of the transaction to
our shareholders.

          Relating to the Spirits and Wine, obviously, the FTC has to make the
final vote and announcement. I can just tell you that the process, which was on
its course - that's to say, the finalization of the consent decree of
undertakings for the sale of Malibu on which Diageo and VU could agree, this
process has ended. The documents have been finalized. They have been signed by
us; they have been signed by Diageo. So we are in the very final review and vote
process in the FTC, which allows me to tell you that we are more than confident
that the Spirits and Wine cash will be in well ahead of the end of the year. We
will not have to work between Christmas and year-end in order to get this cash,
which is good news.

COORDINATOR  Mr. Paul Reynolds, you may ask your question and please state your
company name.

P. REYNOLDS  It's Paul Reynolds at DeutscheBank. Could you just explain the
reporting structure in VU Entertainment in management terms? Basically, do
Michael Jackson, Stacy and Ron all report to Barry, and then in turn, Barry
reports to you, Jean-Marie, would be the first question.

B. DILLER  Let me just interject one piece here on that. Michael Jackson is
going to report to Ron Meyer, it is contemplated, and underneath Michael
Jackson, we will organize the Worldwide Television

                                                               VIVENDI UNIVERSAL
                                                   Moderator: Jean-Marie Messier
                                                December 17, 2001; 6:00 a.m. EST
                                                                          Page 5

Group, all of the television assets other than, of course, Canal. But, the
reporting structure would be that, in the television and motion picture area,
Stacy exactly where she has been; Michael Jackson reporting to Ron Meyer; Ron
Meyer reporting to me; me in turn to Jean-Marie.

P. REYNOLDS  Jean-Marie, you said in your introductory remarks that Stacy and
Ron's intention was to renew their contracts when they came up for renewal.
Sorry, just a pedantic point; but when do they come up for renewal?

J.M. MESSIER  In principal, we have agreed Ron Meyer to extend his contract by
two years, which will make a remaining five years, and Stacy to renew her
contract for five years, so that both of them will be five-years-plus

          I just want to state clearly that this organization, which is Barry's
job as the Chairman and CEO of VU Entertainment, of VUE, this organization is
not something for the time of the call; that's something that we discuss, that's
something that Barry has already discussed at length with Ron, with Stacy, with
Michael Jackson. That is the reason we can tell you that this team is committed
to this transaction.

P. REYNOLDS  A second question, just on page eight again. Could you just
explain how the $750 million Series A preferreds translates into half a
billion dollars of US value? Clearly there's a non-cash pay element in there;
you say there's a pay dividend. Could you just explain how that instrument
works in slightly more detail?

J.M. MESSIER  Yes; that's not a complex one. But the complex one, this one is a
straightforward preferred stock, 20 years, $750 million of face value, with a
5% PIK interest rate. The reason why we took it at the value of 500 is that
this is a below-market debt. We took a 7% discount rate. This PIK coupon of 5%
maturity of 20 years, which ends up in terms of net present value with exactly
$510 million.

P. REYNOLDS  Finally, just coming back to your comment on Liberty Media and
Europe, when do you think you might have something more to say about a
transaction? Can we expect that in the first half of next year? Can you shed
any more light on whether that will essentially be surrounding just
programming alone, or will there be some more, sort of, fundamental
restructuring perhaps of your ownership interest on the distribution side to
go with that? What do you currently envisage?

J.M. MESSIER  Yes, and I want to be very clear there. Any alliance, European
alliance, with Liberty Media will focus on the programming to create an
as-strong-as-possible pan-European programming platform, able to deal with all
distribution platforms, whatever they are; satellite on our side or cable on
the John Malonee side.

          There will be no distribution involvement, no major capitalistic
restructuring except on the programming side, no equity investment on our side.
This year's - the end of the game for both of us is to create a powerful
pan-European programming entity, leading in the five key European countries, in
the key genres of the TV programming.

COORDINATOR  Mr. Edward Citro, you may ask your question and please state your
company name.

EDOUARD TETREAU  Edouard Tetreau from Credit Lyonnais. I have a few questions,
from least important to more important. The first one is on Lagardere, with
MultiThematiques. Did you offer Lagardere the same exit conditions, in terms
of price for MultiThematiques? And also, how happy are they to eventually
become a minority shareholder in MultiThematiques?

                                                               VIVENDI UNIVERSAL
                                                   Moderator: Jean-Marie Messier
                                                December 17, 2001; 6:00 a.m. EST
                                                                          Page 6

J.M. MESSIER  On this first one, Edward, first, there is no tagalong rights
from Lagardere, so they are not offered, and they are not going to be offered
to exist in the same condition.

          They have, on the contrary, pro-rata preemption rights on the stake
sold by MultiThematiques. They are welcome to exercise this right if they want
to do it. They have been fully informed of that, ahead of the transaction. We
are waiting for their decision to exercise or not to exercise their pro-rata
preemption rights.

EDOUARD TETREAU  Coming back on the EchoStar transaction, now that we have the
USAi infrastructure and marketing power for the new channels, do you have any
idea of the revenues you can target from the new channels you will develop on
EchoStar? And also, on the technology side, do you have any target from the
revenues to come from the Media Highway installation?

J.M. MESSIER  On the first one, Barry, do you want to comment on the revenues
generated by channel?

B. DILLER  Well, the opportunity here, and it really is an opportunity, is to
take the platform, and hopefully the combined entity with 16 million
subscribers, which gives you launching rights for new services. Given the
crowded space and the ability to actually get substantial distribution for new
channel ideas in the United States is extremely crowded and difficult. This
really does give you launch capability.

          As far as revenues are concerned, it's impossible really to give you
any figures that would make any sense. What this gives you is the ability to
create new assets. That will take, from beginning to, so to speak, the stage
when you really to produce revenues, that will probably take two to three years,
to build the Program Service to the degree it becomes an advertising vehicle.
And you begin to combine then the advertising revenue together with the
subscriber revenue. But, the model, which is for two revenue streams, is the
model of the future: advertising and subscription revenue.

J.M. MESSIER  As you heard on Friday, we are very much looking to leverage
here, not only the movies and TV production's capacities, but also our other
sources of content, whatever that's - Universal Music, and the games, video
games channel approach, which we think is going, with Music, to be the next
and the most successful interactive services on digital TV.

          On the technology side, I would just like to repeat what Charlie
stated, which is that his expectation is to have four to five million PVR boxes
per year; that Media Highway will be first implemented on all PVR boxes, but
that we will in good faith on top of the existing binding and committing
agreements, look at the ways to introduce Media Highway on as broad a basis as

          The final element that I will give you is that the scale of prices for
Media Highway starts, for the first 2 million boxes per year, at a level of $10
per box, per download of Media Highway, which gives you an order of magnitude of
the additional turnover that Canal Plus technology may expect from this
agreement with EchoStar; on top of the fact that it does represent a very
significant breakthrough for our technology in the States, and obviously,
something which would ease any further worldwide satellite distribution
agreement, leveraging the strength of EchoStar and hopefully EchoStar/Direct TV
on the US market, and of Canal Plus in Europe.

EDOUARD TETREAU  I have a last question, which regards Liberty Media, which is
now your second-largest shareholder, with 3.6%. Let's imagine that tomorrow,
Liberty Media thinks, as we do, that your share price is a bit undervalued,
and takes over the stakes of the Bronfman, of Phillips, etc.; and then you end
up with Liberty Media at say 10% to 15% of your share capital. What would it
change for your strategy, and notably vis-a-vis your relationship with

J.M. MESSIER  Well, the first think, Edouard, is that I am taking your question
as Liberty Media entrance in VU as a vote of confidence, of credibility of
VU's strategy in the US, and knowing how wise an investor John Malone has
always been, I think that's very positive. By the way, with 3.6, he may be the

                                                               VIVENDI UNIVERSAL
                                                   Moderator: Jean-Marie Messier
                                                December 17, 2001; 6:00 a.m. EST
                                                                          Page 7

shareholder, if you consider that the two Bronfmans' families are two different
branches, independently managed; one with 3% for the Edgar one, one with 2.5%
for the Charles one. John Malone did offer us at the time of this transaction;
he did offer us to have ostensible agreements with Vivendi Universal for a
four-year period of time; and anywhere up to 5%.

EDOUARD TETREAU  And you've accepted?

J.M. MESSIER  We didn't reject it. So it's in the agreement.

          But, going back to your question, even when I was speaking about this
pan-European programming alliance, I think that to a large extent, if you look
to satellite digital distributions, except in UK, the strength in continental
Europe is on the side of Canal Plus. The strengths in the US market is on
EchoStar and would be even more so with EchoStar/DirecTV.

          So except the UK, if you consider the countries where digital pay TV
is a real market, or say where consumers are ready to pay and where you can have
direct access to consumers, obviously, the strength of satellite distribution is
on VU, and the VU/EchoStar alliance. So that's, I think, what can explain also
the interests of John for this programming alliance in Europe.

          By the way, as a small addition point to your question, I can just
confirm that we are very close to a final agreement with Rupert Murdoch to buy
him totally out of Stream in Italy, in order to implement expeditiously the
integration of those two platforms, and entering to what was the last regulator
concern there.

EDOUARD TETREAU  Will you commit cash on this one, or will you just take on the
equity, and the debt attached and no cash payment?

J.M. MESSIER  It would be based on a consideration, which will be below $600
per Stream subscriber.

COORDINATOR  Mr. Neil Shelton, you may ask your question and please state your
company name.

N. SHELTON  It's Neil Shelton from Schroeder Salomon. Jean-Marie, I wonder if
you can just sort of clarify again, you are very confident about getting an
Italian pay-TV deal with Rupert Murdoch. Have you received any guidance from
your regulator that they would be comfortable with one company owning the
single DTH operator in Italy, and if so, when would you expect further
guidance from them? Does the USA Networks deal, in your view, require any
regulatory approval? Could you also please give us a time, guidance if you
like, as to when you expect to come back with your debt to EBITDA target?
Thank you.

J.M. MESSIER  On the first point, in the discussions with the Italian
regulator, all the business undertakings have been agreed on. So the last and
only concern was the shareholderships of the combined platform, and the fact
that they didn't want to see both of us in the combined entity. So, yes, we
are comfortable that buying out Rupert from Stream will fit with Italian
regulatory authorities' request, which means that all the business
undertakings being agreed on, the process could be very expeditious at the
beginning, during the course of the first quarter of '02.

          As far as the USA Entertainment assets, the transaction is concerned;
we do not expect to need any antitrust clearance there. So there is no risk of
delay linked to that. And the fine guidance that we can give, most of it, Barry,
is on your side for your proxy. We hope to end up in March, but do you want
perhaps to comment more precisely on it?

B. DILLER  We're going to have to have a shareholder vote, and we anticipate
that it will be about a two-month process. There are no - other than there is,
of course, Hart-Scott, but we don't anticipate any government regulation
issues in front of us.

                                                               VIVENDI UNIVERSAL
                                                   Moderator: Jean-Marie Messier
                                                December 17, 2001; 6:00 a.m. EST
                                                                          Page 8

J.M. MESSIER  For your third question, I would say that what I stated, you have
a debt-to-EBITDA ratio well below three times. I stated it as 02 target; for
me, that's as soon as possible, which means that I will be more comfortable
and I will act in order to achieve that first half of '02, rather than second
half of '02.

N. SHELTON  Just one quick follow-up question: Is there any lockup on Liberty
Media's holding of Vivendi shares?

J.M. MESSIER  That's partial; that's 40%, 30%, and 30%. 40% are free; 30% have
a lockup of 12 months; and 30%, 18 months.

COORDINATOR  Ms. Florence Begonin, you may ask your question and please state
your company name.

LAURENCE BEGONIN  Yes, hello, I have a question regarding the new synergies of
page 23. You expect between $35 and $55 million of synergies. Is it for the
whole period, from 2002 to 2005? Or is it yearly figures?

J.M. MESSIER  Obviously, these are yearly figures, but I want to be very clear
there. We know that the market believes in revenue synergies when they are
there; so we put in this slide what's really obvious, and what you can see we
are going to do, and to enter and to start immediately. We do think that the
opportunities of new channels creations, of monetization of Universal content
on the EchoStar platform, will have a multiplier effect on those revenue
synergies. By the way, that's very substantial, with Edouard Tetreau question.

These figures don't integrate the benefit of the EchoStar distribution
agreement. They do not integrate the benefits of the new channels creation. So
they are really very conservative yearly figures; and we will at a different
time under Barry's leadership, creation of new channels and revenue synergies,
we will express them at each time we will be able to put a figure on them. We
do not want to state huge revenue synergies and after that, you going after
the figures. We will express them on a case-by-case basis at the time that
they happen. That's, obviously, very low and very conservative figures on the
revenue side.

COORDINATOR  Mr. David Dowd, you may ask your question and please state your
company name.

S. SIMON  it's Sara Simon, in fact, from Morgan Stanley. All my questions have
been answered, so you can go to the next person.

COORDINATOR  Mr. Mark Harrington, you may ask your question and please state
your company name.

M. HARRINGTON   Mark Harrington from JP Morgan. Just a quick question on
accounting; if you could just let us know when the transaction will be
consolidated from, and how it will be consolidated; i.e., will Internet results
be included in USA Net, and how will the rest of USA Networks' divisions be
presented, presumably within Universal Studios, or as a separate division?

G. HANNEZO  Guillaume Hannezo speaking, the consolidation will happen as soon
as the 1st of January. Obviously, the interactive businesses will not be
consolidated, as we mostly own warrants; and the ... we own in the interactive
businesses are being pledged. So these are not consolidated in any way, and we
consolidate fully the result of the entertainment businesses.

J.M. MESSIER  If you go to slide 27, you can see that. The additional VU EBITDA
for 2002 is one year of USAI Entertainment assets' benefits, and down the
road, you find the financial impact of the different instruments, and you find
a minus-375 line, which is additional minority interests plus consolidation of
all USAI equity consolidation; which was the previous accounting treatment of
USAI. It means that with our

                                                               VIVENDI UNIVERSAL
                                                   Moderator: Jean-Marie Messier
                                                December 17, 2001; 6:00 a.m. EST
                                                                          Page 9

remaining stake, we will not -- these figures imply no consolidation of - no
equity consolidation - of our remaining interest in the Interactive businesses.

          That's for the accounting side. May I capitalize on your question by
telling also that we will have less of an exposure to USAi Interactive
businesses, even though very attractive ones through the warrants and through
the future value of USAi Interactive. On top of that, we decided with Barry that
it makes a lot of sense to be of long-term commercial agreements,
cross-promotion, cross-marketing agreements, between Vivendi Universal Net,
which is a leader in music online reach, in games online reach, and USAi
Interactive businesses that Barry has very successfully developed.

          By the way, do you know that if you were to look at an - combine a
unique visitor's reach of our respective sites, VU Net and USAi Interactive, the
two together in terms of reach would be ranked number four on a worldwide basis,
right after AOL, MSN and Yahoo. That's as number one of the non-ISP traditional
ISP Internet reach. So the commercial agreements that we can build between VU
Net and USAi Interactive businesses is also very important to us.

COORDINATOR  Vagnesh Pariacci, you may ask your question, and please state your
company name.

V. PARIACCI  It's Vagnesh Pariacci from Goldman Sachs. One very quick question.
Barry, in terms of what the USA shareholders have to vote for, could you just
clarify which shareholders will be voting and what the threshold to accept the
deal will be?

B. DILLER  The shareholders' vote is two thirds of the ordinary, so to speak,
shareholders; non-Vivendi, non-Liberty, non-me. So that is the ratio.
Essentially, between Microsoft, which is a - potentially, because of the
Expedia deal, which we expect will close within this window - Microsoft has
already told us that they are supportive of this transaction. While we will of
course go through a process, we would anticipate that we will certainly more
than achieve that two-thirds vote approval.

COORDINATOR  Mr. John Longhurst, you may ask your question and please state
your company name.

J. LONGHURST  Hello, this is John Longhurst at Capital. A few questions; one of
them is clarification. The first one is, with regard to the USAI Emerging
Networks and USAI Films, is this in separately because of a separate legal

          The second question relates to Media Highway, on the PVR's of
EchoStar; that's non-exclusive. Have you got any idea of any estimates or any
percentage share you expect to achieve on that box next year, given that Open TV
is the current carrier?

          Third question in terms of have you finished your share buyback in
terms of what you've committed yourself to? And will you commit yourself to

          And finally, could you talk a little about how Home Shopping Network
and Ticketmaster will now be dealing with the rest of the VU sort of global
network over the coming period?

J.M. MESSIER  Do you want to take the first and fourth, Barry, and I take the
middle of John's questions, two and three?

B. DILLER  Well, you'll have to refresh me on the first. But fourth, as far as
Ticketmaster and HSN are concerned, we're going to have as tight a
relationship, as Jean-Marie spoke in terms of the commercial agreements,
between the entities. I think that HSN is, as you may know, is fairly strong
in Europe, operating in Germany, Italy, Benelux and London. But there are
other things, we think, for us to do in electronic retailing, where we think
that the forces together, particularly where we've just agreed to cooperate in
France, where we can extend electronic retailing franchise by joining together
and doing

                                                               VIVENDI UNIVERSAL
                                                   Moderator: Jean-Marie Messier
                                                December 17, 2001; 6:00 a.m. EST
                                                                         Page 10

various things on the Interactive side with Ticketmaster, with City Search, with
Expedia, etc. I think there's a whole range of activities that, between our
Interactive, so to speak, brands in this area and Vivendi's distribution and
expertise and involvement in worldwide territory, certainly more than ours is, I
think we're going to be able to make the whole of it be better than the parts.
Sorry, what was your first question?

J. LONGHURST  Regarding the legal status of the Emerging Networks and USAI
Films. Why they are included?

B. DILLER  I don't think there is an issue on legal status. I think the reason
possibly is that we break them out and separate them, those two areas, from
operating businesses, which we do in terms of our own showing of figures, but
there's no legal issue.

J.M. MESSIER  On your second and third questions, John; on the second one, the
Media Highway is not exclusive, in the sense that EchoStar can add to Media
Highway's skills some specific services from Open TV, which may not be
available on Media Highway, but that EchoStar is committed to have Media
Highway on 100% of the PVR boxes coming out at October 1st of 2002. So that's
the commitment, is 100% of PVR boxes will receive Media Highway. There may be
additional features from Open TV; this is not decided. But that's 100%.

          On your third question, we did make this VU shares buyback program, in
fact, very quickly after September the 11th. It has been terminated many weeks
ago. The average price of the buyback was in the 45 euros range, so we do not
expect to have any other buyback programs from now on.

J. LONGHURST  Congratulations on these deals; they're a big step forward.

J.M. MESSIER  Thank you, John.

COORDINATOR  Adrian Venatalu, you may ask your question and please state your
company name.

A. VENATALU  Yes; it's Adrian Venatalu from Schroeder Investment Management. Mr.
Messier, thank you very much for this very complex deal. We have something to
chew on during Christmas! I have a few questions. First of all, are there any
tax implications on the moving of the assets in the various parts of the group?

          Secondly, can you, Barry, maybe help us on the put-call of the 5.5%,
what the volatility is; exercise date; exercise price and all that stuff? And
furthermore, the 1.5% you own in Vivendi Universal Entertainment, are there any
rules or clauses how you can exercise your 1.5, how you can exit it, and how it
will be valued? It's set at a minimum price of $275 million, which gives an
implied value of $18 billion, but what will the excess value be if you say you
want to get 350; what do you need to do?

          Then lastly, just to make sure, given the fact that you're merging USA
Networks with Universal Studios Group, what was the implied value of the
Universal Studios Group?

J.M. MESSIER  Okay, before turning the floor to Barry, Adrian, for your all
very good questions, I just wanted to tell you that this deal is very simple
in operations and strategy. It's a fact that it's quite complex on the
financial basis; even at the end of day on the economic side, we are basically
that's mostly a stock deal, and that's mostly for us paying with a
consideration, which has been received by Seagram in '97. But it's a fact that
it's a financially complex deal, and we thought that Barry and I, we deserved
to come with a deal, which was fitting with your very sophisticated skills.

         On the tax basis, and I to recognize that this is perhaps the most
complex on the financial side I ever went through; on the tax side, that's a
tax-free or tax-deferred deal, but Barry, you are going to comment on that.

                                                               VIVENDI UNIVERSAL
                                                  Moderator: Jean-Marie Messier
                                               December 17, 2001; 6:00 a.m. EST
                                                                         Page 11

          I'm just ending, by your last question; the implied value of Universal
Studios Group through the transaction is close to $10 billion. It's $10 billion.
Barry, you'll go back to tax and the other specific questions of Adrian?

B. DILLER  First of all, as it relates to my interest, the way to make it $350
million is to build a lot of assets. That will make the value come through. As
it relates to the puts and calls, on my interest, it cannot be called for two
years. In practical terms, I would say that it would not - there are
circumstances in which it could be put after the first year, but they're
extremely unlikely. I will trail the puts and calls from, hopefully in an
ordinary way, that are outlined in the 5%, in, i.e., the USA interest in
Vivendi Universal Entertainment, and those go out a number of years. With
specifics, I think if Mr. Kalfin is on, he could speak probably to the puts
and calls exactly, and their timing, but they're certainly not near-term.

A. VON DER OTERLOO  But just to remind - because on page eight, it is only
talking about the 5.5% value of the put and call. But what you're saying, that
your 1.5% has as well a value, and that was not included in the total value. Is
that correct?

B. DILLER  In the total value of what? Sorry.

A. VON DER OTERLOO  I mean, if I could look at page eight.

B. DILLER  I don't have the pages, unfortunately, in front of me; because I'm at
a different location and they did not download yet.

A. VON DER OTERLOO  In the total value, it's talking about a value for the put
and call, which is correct; but that's only on the 5.5. Do you have as low a
call, or a put, in the 1.5%?

B. DILLER  Yes. Sorry, I might have misheard you. Did you say that the value
in the 5.5% was stated?

A. VENATALU  Yes. It's included in the total value of the transaction.

B. DILLER  Sorry, in the other total value, yes.

J.M. MESSIER  Adrian, on the 5.5% owned by USAI, the call and puts period is
that we cannot call before five years. And USAi cannot put before eight years.
The second point is, your remark is correct, because we do consider that this
1.5% preferred interest from Barry is really an incentive to grow the

A. VON DER OTERLOO  But how can Barry exercise his 1.5%, and how will that be

B. DILLER  I can exercise it after the first year, under certain circumstances,
and it cannot be called until the second year. Our hope is that it will
continue to be carried as the assets grow, and it will appreciate. It does
have a fixed-floor terminal value, which I believe has been stated inside the
endless number of documents, which is $275 million.

J.M. MESSIER  Yes; you find that,  Adrian, on the slide 48 on the Web site.
With the precision that Barry just gave, he can put after one year. We cannot
call before two years.

COORDINATOR  Daniela Estrebel, you may ask your question and please state your
company name.

                                                               VIVENDI UNIVERSAL
                                                   Moderator: Jean-Marie Messier
                                                December 17, 2001; 6:00 a.m. EST
                                                                         Page 12

D. ESTREBEL  My name is Daniela Estrebel from Deutsche Asset  Management.
First of all, am I correct in assuming that the total consideration is not
$10.3 billion, but $11 billion, if one includes the $750 million deferred

          And second question is, you've referred to the debt position in 2002.
Could you give us a breakdown in the net debt position of the Vivendi
Environment part of the business, the Media part of the business, and the
Communications part of the business?

J.M. MESSIER  On the first point, no. You are not correct. The 10.3 includes
the value of the preferred A, that's the $750 million deferred - 20-years -
deferred payment. So the 10.3 is, on the basis of 30 days average, the
complete, the full net present value of the deal to VU shareholders; 10.8
being the one at the Friday close. It does include the net present value of
every deferred payment. That's USAi TV Prods without the Emerging businesses.

          On the Vivendi Environment debt Guillaume.

G. order of 15 million.

J.M. MESSIER  Fifteen million euros is the net debt of Vivendi Environment.

D. ESTREBEL  And of Media and Communications?

J.M. MESSIER  For the Media and Telecommunication, where we have this ratio and
this target of being well below three times EBITDA, as you know, we do not
make an allocation of capital split per business. The only additional
indication that I can give you is that, as you know, Cegetel is today quite a
de-leveraged and exceptionally de-leveraged telco in Europe, and will be
basically totally free of debt on its balance sheet during the course of the
first half of '03.

COORDINATOR  Mr. Michael Dolan, you may ask your question and please state your
company name.

M. DOLAN  Michael Dolan from Bank of America Securities. I have a couple of
questions from the debt side. Can you just tell us what conversations you've
had, if any, with the credit rating agencies regarding this transaction? Also,
in terms of Vivendi and Vero Mall, what your ongoing strategy is, how you're
placed with that at the moment with regard to further potential reduction of
your stake in that particular entity.

J.M. MESSIER  Guillaume, do you want to handle this one?

G. HANNEZO  On the credit agency, we have had an extensive discussion, which has
helped us to structure this transaction in the most credit-rating-efficient way,
and you will see that besides the $1.6 billion cash, all the other instruments,
if you go through the structure of preferred A, preferred B, have a strong
equity credit contribution. So this transaction has been structured in a way,
which is designed to preserve Vivendi Universal credit rating, to which we are
very much committed too. The commitment which Jean-Marie just reiterated on VU
de-leveraging to have the US GAAP gross debt well below three times EBITDA is
something which I hope will make further comfortable, the credit rating
agencies, as to what is our target for the end of this year.

J.M. MESSIER  On  Vivendi  Environment,  I can only  reiterate  the fact  that
we will end up by  de-consolidating  Vivendi Environment. In the way and
timetable we will achieve this, there is no change vis-a-vis our
previous statements.

                                                               VIVENDI UNIVERSAL
                                                   Moderator: Jean-Marie Messier
                                                December 17, 2001; 6:00 a.m. EST
                                                                         Page 13

M. DOLAN  Just one final follow-up  question there on your ratings.  You
currently have a split rating.  Which is it that you're actually committed to?
Is it something in the Bbb range, or something in the single-A range?

J.M. MESSIER  Bbb range is for us quite close to an optimum.

COORDINATOR  Mr. Mike Hilton, you may ask your question and please state your
company name.

M. HILTON  It's Mike Hilton,  ABN Amro.  You've very kindly given us the EBITDA
numbers for the main two channels you're buying. Can we get some EBIT numbers
as well, if that's possible?

J.M. MESSIER  Barry, do you have them?

B. DILLER  I really don't have the specific, we'll supply them to you
separately, of course, but we don't really calculate that way. Though it's, of
course, easily done. We'll do so, and we'll get it to you certainly within

J.M. MESSIER  What I can tell you is that basically EBIT figures are very close,
if my recollection is correct, at 10 million euros of different - they are close
to be absolutely equal to EBITDA figures.

COORDINATOR  Mr. Messier, I will turn the call back over to you at this time,

          J.M. Messier So thank you very much for attending this call. I think
that as you have heard, VU US strategy is really coming together. When we
entered into the creation of Vivendi Universal, there was one hole, which was to
relative weakness, which was the lack of integration and distribution on the TV
and movie field. With this natural, simple operations transaction, we are
answering to this relative weakness in the most efficient and lowest
capital-intensive way.

          We benefit, on top of that, of a very accretive transaction to our
shareholders. We benefit, on top of that, of Barry Diller's commitment to
Vivendi Universal Entertainment. I do think it is a major step forward in the
ability of Vivendi Universal on a global basis to fully implement its strategy,
and that's why we do consider this transaction as a major one for the group,
largely over the size and the dollar size of the transaction.

          With that in mind, that time, we have really all the skills that we
need within the group, including the ability to answer to what was seen as our
relative weakness on the US market, and that's the reason why we do believe that
this transaction will further and quickly enhance the VU value for our

          Thank you very much for attending this call.

Additional Information

     Stockholders of USA Networks are urged to read the proxy statement when
it becomes available because it will contain important information about USA
Networks, the transactions and related matters. Investors and security holders
can obtain free copies of the proxy statement when it becomes available by
contacting Investor Relations, USA Networks, Inc., Carnegie Hall Tower, 152 W.
57th Street, 42nd Floor, New York, NY 10019 (Telephone: (212) 314-7400).
Investors and security holders will be able to obtain free copies of the proxy
statement and other documents filed by USA Networks and Vivendi with the
Securities and Exchange Commission in connection with the transactions at the
SEC's web site at

     In addition to the proxy statement, Vivendi and USA Networks file annual,
quarterly, and special reports, proxy statements and other information with
the SEC, which are available at the SEC's web site at You may
also read and copy any reports, statements and other information filed by USA
Networks and Vivendi at the SEC public reference rooms at 450 Fifth Street,
N.W., Washington, D.C. 20549 or at the SEC's other public reference rooms in
New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on public reference rooms.

     USA Networks, Vivendi and their respective directors, executive officers
and certain members of management and other employees may be deemed to be
participants in the solicitation of proxies of USA Networks' stockholders to
approve the proposed transactions. Such individuals may have interests in the
transactions, including as a result of holding options or shares of USA
Networks' stock. A detailed list of the names, affiliations and interests of
the participants in the solicitation will be contained in the proxy statement
that will be filed by USA Networks with the SEC.

The following is a transcript of a press conference held by
Vivendi Universal, S.A.

                         Vivendi Universal USA Network

[recording device is activated]

Jean-Marie Messier:      OK...thank you for joining us this morning...I was,
                         this morning, as a true New Yorker, going through my
                         New York Times newspaper when I read these headlines:
                         Messier Hits Milestone in His Search for a Title. I
                         found that was a little bit strange of a title of
                         headlines for today's announcement. And then I was
                         going through the article, who says: Messier who turns
                         41 next month--no, sorry, it has been 45 this
                         months--demonstrated Saturday night. I saw that it was
                         more on Sunday night that he can still play a young
                         man's game--not so sure--and a team game when needed.
                         Definitely so--the team game when needed. And after
                         that it was saying longevity's probably the first thing
                         that comes to mind; and also being pretty lucky and
                         fortunate to be surrounded by good people all the way
                         through...yes...being surrounded by good people all the
                         way through. And that's the reason why I'm so pleased
                         this morning to be here on this stage with Barry...but
                         to have in the front row here my friend Edgar, Pierre
                         [unintelligible], Ron Meyer, who is going to be the
                         clear number two of this wonderful venture...Michael
                         Jackson. And after reading the New York Times, I was
                         going through Barry's statement. And Barry's statement
                         in his press release...there was one expression I like
                         very much: `great Good Luck.' I can take it. I have a
                         great good luck...which is to be able to transform and
                         grow a group like Vivendi Universal; and to be able to
                         work with people like Barry, Ron, Pierre, and a few
                         others. So, that being said, and definitely Mar Messier
                         is a great player...[laughter] and I am not. That being
                         said, let's go to the core of what we are doing
                         together" creating Vivendi Universal Entertainment, VUE
                         in English...VUE, or `VUE' with a loud French accent.
                         And let me start by telling you that this has been a
                         story in our discussions between Barry and I for more
                         than one year where we have been discussing since the
                         very beginning of the creation of Vivendi
                         Universal...what we can do and what we can do more
                         together. Even if it has been in real terms and
                         agreements the very day of Thanksgiving, which was a
                         good sign. And it was, which is also a...looking to the
                         future, it was a wireless have pictures
                         requiring live most of the handshakes
                         are wireless handshakes, and that's where the future
                         lies. And in that case, it was a Thanksgiving wireless
                         handshake. This combination that we are presenting to
                         you this morning is the simplest you can imagine. It is
                         simplest because this is the time in the US industry of
                         integration and consolidation. And putting together
                         Universal Studios Group and USA-I Entertainment assets
                         is an obvious move for both of's a natural fit.
                         So if that's obvious and natural, let's do it. This
                         combination, VUE Entertainment, is creating a new US
                         major...a tier one player. And that's the reason why we
                         choose as a code name for these discussions: Tier One
                         because this code name is exactly expressing what we
                         intend to build and to develop. And we saw that it was
                         the right place to compete and the right time. And
                         thanks to these transactions Vivendi Universal's
                         strategy in the US is coming together and I'm glad of
                         it. So very simple on the strategic basis...very simply
                         also on the management side and on the people side.

                         This business is about talents. Talents are the
                         keystone...the key asset of the creative businesses.
                         And, here, vivendi Universal Entertainment will start
                         with the greatest talented team that you can imagine.
                         I'm glad for that to have Barry's commitment to be on
                         board as the chairman and CEO, both for Barry's
                         industry vision but also for Barry's track record in
                         terms of cash [unintelligible] gross, asset
                         value...that's my job vis a vie VUE shareholders. By
                         introducing Barry in this position, I'm serving my
                         shareholders. But this team is, and all the leadership
                         of Barry, not only about Barry. There will be a clear
                         and fantastic number two with this team...his name, you
                         know him, that's Ron Meyer. And Ron has achieved since
                         Edgar has come to join Universal Studios, the most
                         wonderful turnaround and successful paths of the
                         histories of this industry in the States. Ron will be
                         along Barry the number two of this venture with...along
                         with him three outstanding top executives: Michael
                         Jackson, who will report to Ron and who will, for the
                         film spot, report to Stacy--Stacy will have under her
                         leadership all the movies activities. Stacy will report
                         to Ron; and Tom Williams on the recreation business
                         will do so too. A wonderful team...with the addition of
                         Pierre Leskur. And when I was asked over the last few
                         days on when I heard questions about, `How is that
                         going to work between Barry and pierre?' I was saying
                         to myself, `look, it means that Pierre has made a good
                         job with Universal Studios and in the integration
                         between Universal Studios and Studio Canal over the
                         last year. Because if Pierre has not made a good job
                         over the last year this question would even not arise.
                         So, this business is about talents. We have a
                         wonderfully talented team around the leadership of
                         Barry and Ron. This transaction is so simple on the
                         personal basis. Barry and I...Barry is supposed to
                         have--I read that also in the press this morning--a
                         strong personality. Wow. [laughter]. I Think that it's
                         going to be easy to work because our relationship is
                         based only on two things: the first one is trust and
                         respect, trust and confidence; it's achieved by being
                         candid, direct, and business-focused. And a second
                         characteristic of our relationship is, in this case,
                         mutual freedom. Because of those two characteristics,
                         this may and this will work. On the financial
                         side...that's a clear win-win. USAI's getting a good
                         price and a full price for its assets. But vivendi
                         Universal on this side, without getting into details on
                         the financing, we are fully taking the advantage back
                         of the initial transaction originated by Edgar Broffman
                         Jr. To have a step two you need a step one. That's
                         basic but that's true...everywhere at any time. And, as
                         you realized, most of the price that we are paying for
                         USAI Entertainment assets are the shares that we
                         received at the time of the '97-'98 transactions; and
                         the cash, even on the nominal basis, we used it nicely
                         over that period of time that we received at that time.
                         Most of the transaction is based on the initial
                         consideration received by Seagram. So to a large extent
                         I want to sort of thank and to thank my friend Edgar
                         Broffman for having initiated this transaction in '97.
                         There was a few goals in this transaction. The first
                         one, which was uncertain in terms of timing at that
                         time, was a dream of Edgar to get the full control back
                         of these assets one day after having them being grown
                         and successfully grown by the best manager...[recording
                         briefly stops then starts]...We are swapping non-co,
                         non-consolidated assets against fully
                         controlled--Barry, the lights will go up when you stand

                         up. [laughter] So, it's's very good because
                         those non-co, non-consolidated assets...we are turning
                         them in fully controlled, fully integrated, fully
                         managed, fully consolidated, full access to cash flow,
                         strategic assets. And, finally, we get so the
                         relationship and the enhancements of our relationship
                         with Liberty Media. This value and industry-driven
                         transaction is very positive to Vivendi Universal. I
                         want to in this room I speak about the
                         first row but in the last row...Doug, thank you for
                         joining us because when we are speaking of leadership
                         of Vivendi Universal, we have to realize that's a great
                         part of this leadership is Doug's success in creating,
                         developing, strengthening, the absolute world leader in
                         the music side, Universal Music Group, and I can tell
                         you that with Doug and all his team around him our
                         intention, Doug, is to kill them all. And to have UMG
                         even as a stronger leader on the music industry. So,
                         ladies and gentlemen, one year after the creation of
                         VUE, all the skills, all the assets, all the talents
                         that we need to fully deploy...our strategy, are within
                         Vivendi Universal or within our close partners. This
                         transaction allows us definitely to successfully
                         implement this global strategy in the US and abroad; it
                         does address what was seen as our relative
                         weakness--that is to say integration and distribution
                         on the US market...not forgetting our clear advantage.
                         Even more so, after this transaction, we are definitely
                         a global group well balanced between USA--forty percent
                         of our turnover--and non-US world, sixty percent. This
                         is a great step. The ultimate goal is clearly to make
                         from vivendi Universal the global media leader of the
                         future. This is a great step towards this goal. I am
                         pleased to be able to announce it today with
                         Barry...with the support of Barry but more than with
                         the support of Barry, also with the support of all the
                         teams--especially those who have been gathered and, at
                         that time, Edgar's leadership in Universal Studios
                         around Ron Meyer. So, ladies and gentlemen, that's my
                         pleasure to introduce to you a young man named Barry

Barry Diller:            Thank you, Jean-Marie. You know, I'm not so
                         sure that I like descriptions of age. I think, you
                         know, leading off with it was a bit unfair though. Uh,
                         contrary to written recent opinion, I am not sixty, I
                         am fifty-nine...but I'm not sixty...YET. Hopefully
                         inevitably. Um...the other thing is that, though we use
                         this name, which we did, which was Jean-Marie's idea
                         called `Tier One.' From the outset was our code
                         name...our little code didn't seem to work very well
                         since this has been out there in the world of comment
                         and media now for a little bit. In a way, I think it's
                         kind of good because, uh, it allowed people to get
                         comfortable with...with what is a complicated
                         transaction its organization; but what is, in
                         actual reality, very simple. What we've done, and I
                         think that what we've been able to achieve is the
                         testament to the ability for it to have some
                         success...what we've done is to have, in a sense, early
                         re-patriozation of the assets of USA on the
                         entertainment side that...when Edgar and I did our
                         orginal transaction it was quite clear that the
                         motivation was, of course, for the assets to grow in
                         value and then, at a point, it was determined then that
                         that point would be, when I ceased to be the chief
                         executive, that Seagram's and Vivendi Universal as its
                         successor would have a `path' to control; that path to

                         control would have undoubtedly been exercised and the
                         assets would be put back together. What neither of us
                         knew at that time was that while there was some
                         consolidation and concentration, it had not reached
                         fairly fevered pace that it has in the last several
                         years. And what that did to really...Jean-Marie and I,
                         when we started talking about this, is we really said
                         to each other and we...we...the real, I would say,
                         connective tissue began right after Labor Day when we
                         sat in a room a couple of blocks from here and we said,
                         `you know, if we don't solve this issue...if we don't
                         solve this issue between us, while we have all got our
                         reasons why because it's difficult to do, it's complex
                         to do, it involves personalities, it involves all sorts
                         of...of conflicts in terms of who owns the shares and
                         all of that. But if we don't solve this, years from
                         now, people will look and they will say, what dopes
                         were you both that you couldn't figure out how to get
                         these businesses to align themselves correctly for the
                         future.' And what we've done is essentially that.
                         Before the `termination date' of repatriating these
                         assets the wisdom in this transaction is what we've
                         been able to do; and, I think, a perfectly balanced way
                         is we will take the entertainment assets of USA and put
                         them together with Vivendi Universal's assets so that
                         they can operate on a real scale integrated--which they
                         must be if, in fact, there's gonna be the kind of
                         growth and competitive thrust that's necessary in this
                         world. And, on the other side, the USA Interactive
                         assets--and later we're gonna have a press conference
                         on USA Interactive. We thought to combine everything in
                         one thing would drive you all crazy, much less us,
               , immediately after this, we're gonna turn to
                         explaining a bit more about what the USA Interactive
                         company is. But to be able to have a USA Interactive
                         stand-alone, independent company that has tremendous
                         out-of-the-gate, so to speak, starting gun in the fact
                         that it will have...six hundred and some odd million
                         dollars of cash flow in its first year next year...uh,
                         close to three billion dollars in cash...and in an area
                         that's full of so much promise. The ability for that
                         company to be on its own and the ability to consolidate
                         these companies AND, I think, the ability
                         of...[fumbling noise] god forbid I press this, it will
                says Eject Number One--that's me,
                         so...[laughter]...that what we're gonna be able to
                         create on V-U-E, VUE, which we think will over time the
                         little acronym will...will...

Jean-Marie Messier:      -You can see that everyone is making progresses in

Barry Diller:            Yeah, definitely. Let's see...[laughs] so...the ability
                         of us, together, to strategize what is possible; and
                         somebody asked me earlier, they said, well where does
                         your heart really lie in this? I mean, do you have an
                         entertainment heart or this interactive heart?' And I
                         said, `I've been saying long before this,' and people
                         who have heard me bam around in conversations and
                         presentations et cetera, I said that `the truth is that
                         I certainly have a long established entertainment
                         heart. I started in the entertainment business when I
                         was round twenty. I haven't lost my curiosity for it. I
                         started my interest in interactivity and developing
                         that part...god forbid I would call it `muscle,'
                         whatever it is...'blood' and whatever in '92 right
                         after I left Fox, long before there was an Internet or
                         long before there was a functional Internet. So, I
                         actually...I have genuine, so to speak, heart in both
                         places I think that the ability to do
                         that and to play this role in us the

                         ability, I think, first of all, to have a great good
                         time in addition to the great good luck that we've had
                         heretofore and that we have in this in competing all
                         over the world. The other thing that I would say is
                it relates to my time and people's questions
                         about, well what am I gonna do with my time? And how am
                         I gonna split it? The truth is you can't chop time in
                can' doesn't...that's not real.
                         I basically, up until now, spent about fifty percent of
                         the time in interactive and about fifty percent of the
                         time on the entertainment side. The interactive
                         business has grown, the entertainment business has
                         grown. On some days I'll spend ninety percent on
                         interactive or ninety percent on VUE. But I believe,
                         and we've talked a good deal about this, that I'll be
                         able to do both areas of my responsibility without it
                         being a burden on either. I actually think it will help
                         either. So, that's the thing on time. You may want to
                         ask additional questions; to the extent I can answer
                         them I'll try but that's my thought on that. As far as
                         the people I get to work with...on the side of this new
                         venture. First of all, I've known Ronny Meyer, he's
                         been my friend for, I don't know, too long a time...not
                         too long but a long time only in terms of judging the
                         width of the tree. But we've been friends for a very
                         long time. And Pierre Leskuer, who I've known for
                         several years now and I would say that...actually
                         pre-dating this transaction we began to be friends...we
                         have some French in our lives commonly although my wife
                         is Belgian though the language is...that side of the
                         language is French...uh, and she has a flat in Paris
                         and, so, I have...I certainly believe that Pierre is my
                         friend and I' the process of what we've put
                         together I think I'm gonna enjoy that association.
                         Michael Jackson, who is sitting here, recently came to
                         USA to run its entertainment businesses, to be in
                         charge of them, because I felt they absolutely had to
                         have the full time attention of a single leader and
                         Michael Jackson is that leader; previously he ran what
                         I think is the best channel in the world, Channel Four.
                         I thin we have organized this in such a way, in the
                         conversations I've had with Ron and some conversations
                         I've had with Stacy, and some conversations that
                         Michael and I have had...I think we have an original
                         organization for this; it is going to be tension-free.
                         It is certainly hopefully going to be lively and
                         opinionated and full of the passion of argument, which
                         is where I think the best stuff comes out of almost
                         anything creative. But I think it's organized at the
                         outset correctly. And, as far as the interactive side,
                         I'll deal with that later in terms of its executives
                         here in this part. With me this morning is John Miller,
                         who is the CEO of information and services on the
                         interactive side of USA. So I think, I mean, although
                         I've probably forgotten something, I'm happy...I'm
                         happy to shake your hand actually although I don't want
                         them to take any pictures because they'll be THAT
                         picture, you know? That kind of bromidic picture and
                         whatever--we'll avoid that. But we will be happy to
                         answer any questions that you have...

Jean-Marie Messier:      Yes? On the left side?

UM2:                     [question in French]? [now speaking English] Last
                         question if I may ask to Mr. Diller. It was in the
                         communique this morning about the French producers
                         basically about, I quote, `an Americanization of French

                         cinema.' I just wanted to have your views on that, I
                         mean, after Mr. Messier, if I may. Thank you.

Jean-Marie Messier:      Not only...don't apologize to ask the question in front
                         of Pierre Leskur, that's...that's no problem there. Uh,
                         as I was saying, the fact that this question is raised
                         just shows that Pierre Leskur presents and work in L.A.
                         with all the USG team over the last year...has ben very
                         successful. But what we have achieved, which was not
                         obvious at the beginning, the French guy, even knowing
                         the business, coming to L.A. has been totally
                         overcomed...and that several very positive outcomes
                         have been reached through Pierre's action in L.A. one
                         of the most important for me being the integration
                         between the US and European side, between Universal
                         Studios and Studio Canal. That job needs to go ahead,
                         needs to be pursued, and no one here has better skills
                         than Pierre Leskuer to continue this job. And, on a
                         more personal basis and that's something that we
                         discussed with Barry and which is very substantial with
                         not only Barry's views but with our own internal
                         management's views and with what has happened, for
                         example, during our discussions with Ecco Star, as an
                         entertainment group we need to be able vis a vie
                         distributors to deal as one single entity. And I've
                         discussed so many times this point with Edgar Broffman,
                         who's smiling right in front of me. And we had been
                         successful in breaking the deal with Ecco Star only
                         because at the end of the day we had been able to make
                         the arbitrage between our technology interest, our TV
                         and film interest...Doug, our music interest, our games
                         interest. We need to act as one single worldwide
                         content group. So we will create a worldwide
                         entertainment committee, which is going to be gathered,
                         let's say, half a day every month and whose main goal
                         is going to gather all the strengths, all the
                         entertainment CEOs of the group...starting by Barry and
                         Ron...Doug, obviously, and [unintelligible name] Turen
                         on the publishing side, to make those positive
                         arbitrage, to extract the synergies between our content
                         businesses, and to have one single voice in our
                         relationships with the key distributors. And I've asked
                         Pierre, who has been very successful in integrating the
                         movie business on the two sides of the Atlantic, to be
                         along with me in managing and sharing this committee.
                         This is very important to us and this is very important
                         to the group. On your Franco French movie industry
                         question, may I just say that, as we all know and as we
                         all understand, the Franco French exception culturale
                         is dead. We are today in a time of cultural diversity.
                         What does that mean? It means that you need to be both
                         global and local. The wonderful success of Doug
                         Murray's team is the UMG is not only the world leader,
                         UMG is a local leader in six out of the seven main
                         markets around the world. WE need to understand that
                         this is true on the movie side too. The interests of
                         Vivendi Universal is, on one hand, a rather wonderful
                         US major...very successful, very dynamic. Vivendi
                         Universal Entertainment in the US...and, at the same
                         time, to keep Canal presence, Studio Canal being the
                         first support of the French movies industry. But as
                         Canal proceeds as sole and first support of the Polish
                         movie industry in Poland...of the Italian movie
                         industry in Italy. And, for me, let me put it in
                         perhaps a too aggressive way: that kind of statement
                         sounds a little bit archaic in the times that we are
                         living and in those times of cultural diversity. And

                         the anxiety underlined there is totally artificial and
                         has no basis. Yes?

UM3:                     Mr. Messier, Nicola Bai from Lezico. I have another
                         Franco French question if I may. You remember a few
                         years ago your good friend Rupert Murdock had to take
                         the US citizenship. Do you--because of his investments
                         in this country--do you think that you will need to do
                         the same?

Jean-Marie Messier:      No, I don't think so. I'm pleased that Rupert is a US
                         citizen. I'm proud of my French passport and, uh, I
                         think that obviously in this case we do not need that.
                         May I underline very...very narrow difference between
                         Rupert and I. I think that he is basically the owner of
                         this group. I think that I'm the chairman and CEO of
                         Vivendi Universal on the behalf of my shareholders and
                         vis a vis any question relating to nationality and
                makes a difference. Part of
                         Rupert's US citizenship was, was linked with regulatory
                         issues. So, let me be clear, I[`m proud of being a new
                         Yorker--even more so after nine, the eleventh and I'm
                         proud to have my family living here. We are a global
                         group. I'm the French chairman and CEO of the global

Barry Diller:            I would only add that my wife is a Belgian and in
                         Belgian law if you are married, you can have a dual
                         citizenship. So...I'm going there. Yes? Oh, more in the

Justin Opelar:           Justin Opelar of Variety. Just a question--with the
                         backdrop of tremendous success in the film division
                         over the past year...any concerns about continuity? You
                         know, given that this is a, you know, substantial
                         management change and kind of, you know, a new
                         structure. And then, one more question, just now that
                         you guys are getting into, you know, the television
                         business to some extent, there's gonna be some ad
                         exposure there, that had long kind of not been a very
                         significant part of your revenue model. Any kind of
                         concerns about, you know, exposure to that very
                         cyclical market?

Barry Diller:            On the first part, um, as I read someplace that...what
                         I'll do is fix something--try to fix something that
                         ain't broke--one the contrary, as I've talked with both
                         Ron and Stacy, I'm gonna cove to their culture in this
                         area and, in fact, I'm just a complete supporter of
                         what they have done. I can't imagine that there will be
                         any disruption of any kind in any area on any level or
                         in any particular. It just simply seems to me actually
                         impossible. As it relates to ad exposure I think, Jean
                         Marie, you can answer it as far s the percentage of
                         advertising exposure. I would only say one thing about
                         the, the nature of cable television networks is that
                         they have, of course, two streams of revenue; one comes
                         from advertising and the other comes from subscribers.
                         And it is the strength of those revenue streams that
                         are guaranteed, so to speak, that makes what is, of
                         course, a terrible advertising climate which is gonna
                         continue for a bit. It isn't gonna continue forever,
                         obviously, but it certainly allows the level of program
                         commitments that Mr. Jackson has been engaged in, in
                         juicing together in just such a short period of time
                         from being made to create the assets that when there is
                         an advertising economy with some robustness inside of
                         it that, in fact, the advertising revenues will shoot
                         back in; but it's protected to a degree by subscription

Jean-Marie Messier:      And just to give you some orders of magnitude, Vivendi
                         Universal Media activities will represent, '02,
                         basically, 32 billion Euros of turnover. The turnover
                         of USAI Entertainment assets are two billion Euros. One
                         set of that is advertising driven, that's six hundred
                         or so, that's in order...just to fix order of
                         magnitudes...two percent of Vivendi Universal media
                         turnover. So, our exposure to advertising as a group is
                         going to jump to double from two to four percent. I'm
                         very fine with that and I'm very fine that it keeps to
                         Vivendi Universal its very strong defensive qualities
                         in the current environment.

Barry Diller:            In the back?

UM4:                     At four percent maybe it can go higher. What is your
                         opinion of the broadcast network business? Would you
                         like to own one? Do you see any value in those
                         businesses right now?

Jean-Marie Messier:      Can we just stop asking when we are presenting to you
                         what we think is a decisive step, to ask about...yeah,
                         but please, don't you have another one in mind? No? WE
                         do not have another one in mind. Two thousand one has
                         been a year for Vivendi Universal of integration in
                         addressing what was one relative weakness on the US
                         market...the lack of integration in the TV and movies
                         filed, and a lack of access to distribution. So the
                         combination of the acquisition of USAI Entertainment
                         assets and the strategic partnership with Ecco
                         Star...we are fully addressing this relative weakness.
                         Let's work primarily for 2002 to the internal growth of
                         our group. And I can tell you we have a goal in 2002 in
                         terms of revenues gross, which is to continue to reach
                         and to reach in 2002 a double-digit organic growth. I
                         think that at the end of the day such a step as of
                         today is critical for our strategy. But the key
                         strengths of the group? That's to make double-digit
                         organic growth every year. In 2002, we are going to
                         focus on that one.

Barry Diller:            On this side...

Jean-Marie Messier:      And you tell us in the back of the room if you have any
                         question coming from the outside?

UF:                      [inaudible]

Barry Diller:            OK, another couple of questions here and then we'll go

George Stallag:          hi, gentlemen, George Stallag with the Hollywood
                         Reporter. Quick question. Can you talk a little bit
                         about specific projects that you guys might have been
                         discussing already that leverage the strength of the
                         now-combined operations? I remember you guys have kind
                         of indicated that we might see a Fast and Furious TV
                         series, something like that. What's the latest there?
                         What else might you guys have in mind?

Barry Diller:            I mean, I think that there's a...there are a series of
                         things that we've already started to discuss that we
                         actually have been discussing for a little bit
                         before...uh, there is a vast library at Universal in
                         terms of the past both in terms of films and
                         television. There's this wonderful cream that has risen
                         to the top in the last few years, of those titles, that
                         can play their role in terms of potential television
                         series et cetera--I mean, rather than give you specific
                         titles and such. But the work has already begun on

                         that. We think that the prospects are rich and we would
                         think that over the next period you'll begin to see
                         them develop.

Jean-Marie Messier:      ON the left side? Yeah, we will go back to you right
                         after. Don't worry.

UM5:                     Why the reluctance, Mr. Messier, to discuss the
                         financing? Can you give us some details on how you're
                         going to make this...

Jean-Marie Messier:      -The financing is very easy. You have, basically, three
                         parts in this deal: the first one which represents
                         two-thirds fo the global compensation of the
                         acquisition is by bringing back to USAI those 330
                         million shares of USAI that we are owning. And Barry is
                         going to reduce the capital of USAI with that. That's
                         basically giving back the shares that we received at
                         the time of the initial transaction. The second part of
                         it, in rough terms, of the 32-million vivendi Universal
                         shares that we are swapping with John get
                         more USAI shares that we also bring into the
                         transactions. It's a 1.6 billion dollars consideration
                         in treasury stock. And, finally, you have a cash
                         portion of 1.6 billion dollars, which is an amount
                         equivalent to the one was given to Seagram in 1998. Uh,
                         the 1.6 billion dollars of cash has been pre-financed
                         by the sale of our `B Sky B' stake last week. And using
                         our treasury stock to gain Liberty Media as a core
                         shareholder of Vivendi Universal and helping this
                         transaction to happen, [unintelligible] for our
                         shareholders a very good use that we can do with our
                         treasury stock. At the end of the day, this transaction
                         is not putting pressure on Vivendi Universal. On the
                         reverse, what it allows us to do is to increase our
                         EBDA target for 2002 by more than ten percent. It's to
                         increase our net income in 2002 by roughly 200 million
                         dollars. It's to increase the net free cash flow of the
                         group in 2002 by, let's say three hundred and fifty
                         million dollars. At every level of the PNL and of the
                         cash flow that you may look at, this transaction is
                         very positive to VUE shareholders year one.

Barry Diller:            Why don't we go to the question behind that we didn't
                         do and then, as Larry King says, we'll go to the
                         phones. Yes?

UM7:                     Thanks, Thierry Arnot with Le Tribune and the French
                         Business Daily. Uh, I was wondering whether you could
                         both elaborate on the reasons why you decided against
                         integrating the whole of USA networks into Vivendi
                         Universal. And the second question related to that is
                         do you look at it in the same way, in a sense, you are
                         looking at TV back in ' other words, let's grow
                         the assets separately with a view to later repatriating
                         them into Vivendi Universal?

Barry Diller:            Well, I would say, as to the first question, that one
                         of the foundations of this--and I think the art of the
                         transaction--was the ability to have these USA
                         Interactive assets stand on their own separately as a
                         pure business line. And this area of interactivity,
                         while it has certainly gone off like a rocket over the
                         last several years in oft spoken bubble terms is
                         nevertheless the real deal. Interactivity and the...the
                         convergence in all of these, so to speak, media of
                         information and entertainment and direct selling. I
                         mean, interactivity as an organizing principal,
                         standing on its own, is a wonderful business
                         proposition and we've been able to build real
                         companies. It's very important in this transaction and

                         in the art of it I believe that we were able, in a
                         sense, to carve this exactly correctly. And, so, there
                         is this USA Interactive company that I hope and I
                         believe will go one for a very, very long
                         time...growing and building in that...truly important
                         sector of world business; and each year, I believe more
                         so. It does not have, as it relates to the
                         second part of your question, some of you will want to
                         add to does not have the...the foundation
                         principal that the other transaction had. I think much
                         of the misunderstanding and...and, as I've said in a
                         quote that I gave about this, totally unfair criticism
                         of that transaction. The original transaction was it
                         was ALWAYS understood that in that transaction these
                         assets would return. It was understood, by the way, and
                         implied that the best of all possible worlds would be
                         if they increased in value because if they decreased in
                         value. in fact, that would have been a tragedy. In
                         fact, they did increase in value. As Jean-Marie has
                         said, there had to be a step one before step two and
                         those shares that were part of that transaction are
                         what, to a very large degree, paid for its
                         repatriozation. So, uh, I think it relates to
                         the same thing happening all over again, while there's
                         nothing in the world that I would preclude, because
                         there certainly is the ability for anything to happen,
                         USA's course is clear and independent. USA Interactive
                         is clear and...independent and there are no such
                         agreements or discussions or et cetera or anything that
                         is a foundation principal with regard to that.

Jean-Marie Messier:      Just two quick points, the first one to underline.
                         Those assets have grown in value and we are paying them
                         with the USAI stock, which as grown in value at the
                         same time; that's the reason why from a VUE
                         shareholder's point-of-view this transaction makes a
                         lot of sense. And on the interactive side, just to make
                         you sensitive to one point, we are very much looking
                         with Barry to build between vivendi Universal net and
                         USA Interactive the right commercial long term
                         agreement between our respective interactive and
                         Internet-based businesses. If we were able to play it
                         right, through the right cross-marketing agreement, do
                         you realize that together those assets in terms of
                         unique visitors reach will rank on the worldwide basis,
                         number four? Right after the three ISPs: AOL, MSN, and
                         Yahoo! If we play as a ring to a large extent VUE Net
                         content online Internet sites and the wonderful
                         transactional businesses of USA Interactive, we will be
                         together number one of the non-ISP in terms of Internet
                         reach. I think that it gives you an idea of the
                         potential which does exist here through commercial
                         agreements between us and it does explain to you the
                         reason why I've been discussing with Barry and
                         requesting through the transaction to get for the
                         benefits of my shareholders--of VUE shareholders--a
                         very significant amount of warrants on USAI Interactive
                         to get Barry my share, my stake or my shareholders'
                         stake, of the value that you are going to create also
                         on the interactive side.

Barry Diller:            And we're hopeful that it comes.

Jean-Marie Messier:      Outside?

Barry Diller:            Yes, let's take it. Okay?

Operator:                [through phone connection] We have a question coming
                         from Richard Berrier, you may ask you question. Please
                         state your company name.

Richard Berrier:         Um, yes, Richard Berrier, Los Angeles Times. Just a
                         couple of questions. I was a little unclear on Mr.
                         Armstrong's role in the structure? Can you clarify
                         that? I also wanted to ask what the value of this
                         venture will be. And the third question is, um, if you
                         could perhaps elaborate on some of the most fundamental
                         changes we can expect to see at Universal Studios
                         including in the recreation group?

[recording abruptly ends] [end of tape, side A] [start of tape, side B]

[recording device is activated]

Barry Diller:            Well, first of all, I think as it relates to Mr.
                         Armstrong I would direct you to AT&T.

Jean-Marie Messier:      It was Jackson perhaps?

Barry Diller:            Did you say Jackson?

Richard Berrier:         I'm sorry, Mr. Jackson.

Barry Diller:            Sorry, then...the role of...I thought I...

Jean-Marie Messier:      Michael, you're not leaving for AT&T are you?

Barry Diller:            No-no-no. Michael Jackson is not Michael Armstrong.
                         Uh...I think I spoke about it earlier. Michael jackson
                         is going to be the senior executive on the television
                         side of the combined Vivendi Universal Entertainment
                         and, as it relates to changes at Universal Studios,
                         we've talked about that. I think that, in fact, I
                         certainly anticipate none. I would direct you later,
                         after this press conference you can all gather around
                         Ron Meyer and Michael Jackson and they'll tell you what
                         they think because they're the responsible parties.

Jean-Marie Messier:      And with Ron as number two to Barry you can imagine
                         that it's going to be a strong team. Value, which was
                         your in the between question? Uh,
                         let's be over simplistic that's the only way because
                         this financial transaction is a little bit complex.
                         Barry has a lot of very nice people around him who love
                         sophistication in the financial deals.

Barry Diller:            let me just say we're evenly matched. [laughter]

Jean-Marie Messier:      That's quite simple. You may have seen different
                         figures in terms of value of the deal. Let me take the
                         three key figures: 10.3 billion dollars is our value of
                         the deal based on the thirty days average for any stock
                         transaction within the global agreement. We took a
                         thirty days average because that's usual and because it
                         can be an unaffected price after the leak of last
                         week--that's 10.3. Ten point eight billion dollars
                         would be the value of this transaction if you take
                         Friday close stock prices. The problem for us with that
                         is that Friday close do include part of affected stock
                         price on the USAI level. Basically, it gives a 10.3 to
                         10.8 billion dollars range. The only other difference
                         between USAI approach and our approach is that
                         obviously we are taking into account the value of the
                         warrants that we are receiving on USA Interactive.
                         Twenty four million of those warrants, the first trench
                         of twenty four million is not so far, even closer,
                         since the opening of today from being in M&A. They have
                         an objective market value, very significant value to
                         our shareholders that we are taking into account. USAI,
                         looking at the sales of the entertainment assets on a
                         stand-alone basis is not taking into account this value
                         of the warrants; it's a discrepancy of basically eight

                         hundred million dollars, which may leave you to the
                         11.6 or 11.7 billion dollars, which has been the other
                         figure mentioned for the value of this deal. Obviously,
                         between the...on the warrants, the two approaches are
                         correct. USAI shareholders can look at the value they
                         are selling the entertainment assets; and we are
                         looking, as VUE shareholders, at the total amount of
                         what we get, what we pay for, and what we receive. And,
                         so, we do integrate those warrants with, as I was just
                         mentioning...have a true and very impressive value. I
                         think that those warrants are long term, ten years,
                         let's you...Barry? Time to grow and grow and grow again
                         the value of USA Interactive businesses.

Barry Diller:            The way we look at the warrants, obviously, from USA's
                         point-of-view--the only issue for the warrants is
                         dilution and the dilution clicks in...first of all, a
                         very long time from now and also at prices that...that
                         are certainly higher than our current share price. So,
                         for us, the effect of the dilution, given our share
                         base, is fairly small and, therefore...and its timing
                         is distant. And, so, consequently, for us in valuing
                         the transaction we feel we legitimately value it at a
                         different basis. This is...well, people would say how
                         could you value the same transaction two different
                         ways? Well, the truth of it is of course you can; there
                         are two different securities, they have different
                         characteristics, the considerations are different in
                         terms of valuing them on either side; and it's, of
                         course, open to interpretation. It's what keeps
                         analysts happily at work and alive. Uh...were not
                         concerned at all by this and we think the simplistic
                         explanation of this is the one that will carry.

Jean-Marie Messier:      This range is basically sixteen to eighteen times eBDA
                         pre-synergies and twelve to fourteen times EBDA
                         post-synergies. And, one more time, we are paying
                         mostly...with a stock that will receive initial...and I
                         think that whatever you look at this transaction, all
                         of this makes a lot of sense. But speaking about
                         financing and structure fo the transactions, that's
                         also the...the occasion to thank all of our internal
                         teams who have worked on these transactions but also
                         the outsiders and I'm thanking on our our
                         financial advisor, Goldman Sachs, as the global advisor
                         and Morgan Stanley as the equity advisor to our legal
                         advisor, Kravas and my favorite lawyer and partner,
                         Fiza Assad who is in the back of the room...our audit
                         team of Arthur Andersen hereto such a transaction is a
                         teamwork inside and outside. And I want to thank all of
                         them; they made a tremendous job in such a minimal
                         period of time...that's impressive.

Barry Diller:            I would...I would certainly add to that the one thing
                         that I can say on both of our behalf is that we have
                         improved employment in new York City profoundly over
                         the last month. [laughter] And, on our side, we could
                         not have done this without Allen & Company as our
                         financial advisor and our special committees
                         advisor...Bear Stearns. With particular respect to
                         this, because fo this transaction...because of USA's
                         board membership, which leave literally four directors
                         who are, so to speak, unconflicted--meaning that they
                         don't' have interests on any side of this because
                         between he Vivendi board members and the Liberty board
                         members and me and....uh...other USA associates. There
                         were four people but we were very lucky, there were
                         four great people...uh...led in this case by Bill
                         Savoy...and...and his leader, Paul Allen, who were one
                         part of the special committee and, on the other side,
                         was General Swarzkopff, who is a member of our board

                         and Ann Busqet. And they...when you're on a board and
                         someone calls you up and says, `you know, we need a
                         special committee so you're really have
                         to go to work.' And they really did in the last ten
                         days...had to put in an enormous amount of work--they
                         were the group that actually, on the USA side, voted
                         this transaction into being. So a special thanks to
                         them as well as Wachtel Lipton without whom I might be
                         standing here but I'd be far thinner in many different
                         respects. Um...but...and one addition that I would add
                         in this case. Here in this room is Guillaume Aniso,
                         who's the CFO of Vivendi Universal and, in Californian,
                         is victor kaufman, who is the vice chairman of USA and,
                         in respects, in the same way...and without their
                         creative abilities and without there...

Jean-Marie Messier:      -Their endless discussions...night discussions...

Barry                    Diller: -Their endless discussions for sure...there
                         would have been, of course, no transaction. It would
                         not have been possible without both of them and I'm
                         glad I'm going to be associated with both in the
                         future. So, just one more question maybe we should do

Jean-Marie Messier:      There was one...

Barry Diller:            Sorry...

UF1:                     [inaudible in background]

Barry Diller:            Okay, then we'll let you all go to life.

Operator:                Thank you, our next question comes from Frank Arienz.
                         You may ask your question. Please state your company

Frank Arienz:            Frank Arienz, Washington Post. I have two questions for
                         Mr. Diller: one, what changes will we see on USA
                         networks and when to tell us this deal has happened?
                         And, second, as former head of paramount, Fox, this
                         seems to put you back up at the power level of folks
                         like Michael Eisner and Dick Parsons. How does that
                         feel to be back?

Barry Diller:            I didn't thin I went very far away to be honest with
                         you but you can all have your own little ideas about
                         that. I've been reading about all of that it, like,
                         makes me laugh every time I see that.
                         can only say the truth, it really does make me kind of
                         smile. That's about my only thought about it. As far as
                         USA networks, I mean, I really think that you should,
                         after this, ask Michael jackson. I mean, he's...he has
                         been at work at USA long Michael?

Michael Jackson:         Six weeks.

Barry Diller:            Six weeks. And it's all done and he has a new program
                         schedule for you and he'd be happy to tell you all
                         about it. No...he...he's got this network at a very
                         interesting time. We, last year, I think with some
                         hindsight wisdom, we lost wrestling and that hurt our
                         ratings; but I thin the ideas for USA network and the
                         discussions that he has been having recently and in
                         every discussion that I've been around and heard, I
                         think you would expect real growth for USA networks. It
                         will begin at some point next year; it isn't gonna come
                         fast because it doesn't' happen that way. Solid growth
                         in terms of networking comes over a period of time;
                         but, from the early work ai have enormous confidence in
                         their prospects. So, we have, what? Paris?

Jean-Marie Messier:      One other question in Paris? That's right?

UM*:                     [asks question in French]

Jean-Marie Messier:      [answers question in French] [returns to English],
                         on this one, the basic answer was what about the depth
                         and credit rating relating to this transaction? I just
                         emphasized the fact that there is 1.6 in cash and 0.75
                         in preferred stock...twenty Euros below the market
                         interest rate, which is basically 2.5 billion dollars,
                         out of which the cash part has been pre-financed by the
                         sales of Partifal the [unintelligible] sale of Partifal
                         [unintelligible] AB stake. AS far as the global depth
                         ratio of the group is concerned, our target is to have
                         in '02 a depth to EBD ratio well below three times and
                         especially we are focusing to reach that target ahead
                         of the end of the first half of 2002, which means that
                         Vivendi Universal will end up its program of selling
                         its non core asset in the first half of '02; it will
                         give us very comfortable triple B credit rating targets
                         that we are very comfortable with. [Short question to
                         questioner in French]? Ah...doing in French and English
                         if you don't mind for our Paris people? Uh...[continues
                         to caller in French] [returning to English] So, no
                         cleaning of balance sheet because the balance sheet is
                         clean. That was the first part of my answer and the
                         second one is we are committed to issue full US gap
                         earnings starting Q1 of '02. We already, in fact,
                         worked on the basis of US gap accounting methods in '01
                         in order to build our track record at the time of this
                         year, at the time of the release of our first full
                         quarterly US gap in '02. So we are already applying all
                         US gap methodologies, including those relating to
                         amortization. Another question in paris? That's all? Is
                         there perhaps a final question here? None? There was...

UF*:                     [asking question in French]

Jean-Marie Messier:      Oui...I'm just going to give in French about the Pierre
                         Leskuer role...[answers in French] [returning to
                         English] So now we go back to English for one final

UM8:                     Maybe I missed this earlier but what is the reporting
                         relationship, Mr. Diller? Who do you report to?

Barry Diller:            Who does

UM8:                     Him.

UM8:                     Directly. Okay.

Barry Diller:            That's it. Um...thank you all very much. We
                         have...[laughter] What? Did I do that wrong?

Jean-Marie Messier:      Excellent!

Barry Diller:            It was a simple...simple answer. Simplicity is best.
                         We're gonna have a five minute break and then we'll do
                         a USA Interactive...hopefully a brief press conference
                         but thank you all very much.

Jean-Marie Messier:      thank you...thank you everyone.

Barry Diller:             What's that? No, this is nice, this is very nice us
                         together. You don't want that handshake. We'll do that.

[recording device is deactivated]

[recording device is activated]

Barry Diller:            We're gonna get this USA Interactive thing going for
                         those of you who have an interest in USA Interactive.
                         So if we could...kind of take the A/V out of here that
                         doesn't relate to it, I'll answer questions
                a little bit about USA Interactive.
                there anything here numerically I want to
                         cover for you? If you look--a couple things about USA
               've made fifty-five investments or
                         acquisitions since 1997; they're all focused on areas
                         that have natural relationships to each other. There's
                         a natural migration therein to interactivity. We have
                         transactions that scale. What we believe is that
                         merchandizing creates margins, it's why we've spent our
                         time on things where there is margin. We've had an
                         annual growth rate that's been very high, twenty
                         percent over the years--sorry, twenty percent from 2000
                         and which we will think will continue into 2003. In
                         terms of online migration, travel is at fifteen
                         percent, ticketing is at forty percent of
                         migration...the margins are growing even faster,
                         twenty-nine percent over the next few years. We have
                         low inventory risk. At HRN we have thirty percent gross
                         margins. I'm really not...I don't think I need to go
                         through these various little metrics. The one thing
                         that I probably would do is something that we think is
                         really interesting...that in 1995, if you looked at
                         revenue through the screen it was really advertising
                         and subscriptions. In 2000, transactions
                         are...uh...thirty-nine percent; growing, I guess,
                         eleven percent in '95. And in 2005, transactions are
                         estimated to be about sixty percent of what will happen
                         over a televisions screen. And the interesting thing
                         for USA is we are already, in terms of a percentage of
                         mix in the company, at where it is going to be in
                         2005--so we think that the areas that we're in, the
                         areas that USA Interactive is in, are the enormous
                         growth futures of the world. And, given our start, the
                         fact that we start this enterprise with strong cash
                         flow, with an awful lot of cash--close to three billion
                         dollars--and...and an integrated interactive universe
                         that...I said earlier, it would be a crime if we were
                         not able to capitalize on that. We're already nine
                         percent of interactive commerce. We think we'll be
                         twenty percent in 2002. WE think we're going to be the
                         dominant player. As against our nearest competitor,
                         which is EBAY, in terms of profitability, they are
                         slightly more profitable than us at the moment. They
                         have essentially one line of business. We have twenty
                         different lines of business inside USA Interactive. So
                         we have a fantastic opportunity inside this interactive
                         company and we intend to be about it with as much
                         moment as we can bring to bear. So, with that, I'll
                         answer any questions that you have. So...questions? Yes

UM9:                     [unintelligible]

Barry Diller:            I don't' think there's a need to...uh...we've talked a
                         bit about it in the past and we're gonna talk about it,
                         obviously, in the future. There is the potential and w
                         control those companies, obviously, they're
                         subsidiaries, technically, of USA. Uh, I would think
                         that in the future we would look to consolidate them,
                         we will look to--we may not do it. In fact, they are a
                         find stand-alone. They have a nice basis. They're
                         perfectly okay in their configuration. But a
                         rationalization is possible over time. Yes? I think

UM10:                    [unintelligible]

Barry                    Diller: Okay...we've been at this, by the way, since
                         six this morning so I think every possible question
                         from any possible country, other than Transylvania, has
                         already been answered.

                         What would it be?

Operator:                Excuse me, Simon Applebaum, please state your company?

Simon                    Applebaum: Yes, Simon Applebaum from Multichannel news
                         and, Barry, I will try to have something a little bit
                         different. Uh, how will this...what role will your ne
                         company, will USA Interactive, play in the effort with
                         Vivendi to develop interactive TV channels with Ecco
                         Star? Channels, by the way, which will not be exclusive
                         to Ecco Star, they will be sold to cable operators here
                         in the US and overseas?

Barry Diller:            Yes, well, first of all, we're gonna have commercial
                         agreements between us and between USAI and VUE and
                         vivendi in lots of different areas. AS far as the
                         commerce channels...we are going to launch a travel
                         service at some point in the next six to nine months;
                         we have existing arrangements for that. We actually
                         have existing carriage arrangements with Direct TV,
                         which, if Ecco Star acquires Direct TV, we'll become
                         for the whole. UH, and we're gonna...we have one more
                         category that were going to probably announce within
                         the next three months or so, which will be a commerce
                         and transaction service. The deal that we have made
                         divides commerce and transactions on the left side with
                         USAI and entertainment on the right. We will service
                         each other; we will combine in certain areas because
                         there is a relationship between entertainment and
                         interactive commerce in terms of commercial
                         arrangements. But, as far as the ownership of the
                         assets, all transaction and interactive assets are
                         owned wholly by USA and vivendi has its own interactive
                         assets. Yes, Victor Miller?

Victor Miller:           -interactive question but I didn't get this in during
                         the regular call. What impact will the deal have on the
                         individual USA networks and who runs them? UsA and Doug
                         Herzog, Bonnie Hammer in Sci-Fi, Patrick Ven and Trio
                         Newsworld and prime...will there be a change in focus?
                         Will everyone stay in place? What's happening there?

Barry Diller:            Um...I think...Michael's not here
                         anymore...Jackson...but all of the executives of USA
                         Entertainment, the ones that you just named, will
                         remain in place; they will be combined with other
                         activities of...Universal Television worldwide, which
                         will all be under the responsibility of Michael jackson
                         who, in turn, will report to Ron Meyer. But we don't
                         anticipate any changes. We have very good teams on Sci
                         Fi Channel, on USA Network, and Patrick Vien is a
                         first-rate executive in charge of our emerging networks
                         so we don't anticipate a change. Yes, Victor?

Victor Miller:           Thanks, Barry. You've talked about the migration. Could
                         you give us a sense of metrics for everyone on how much
                         you've seen the ticketing business go online? The
                         airline ticket business going online? The home shopping
                         business going online? How quickly has that happened
                         and how far could it go?

Barry Diller:            Well, Ticketmaster Online is now up to about forty
                         percent; we think it will go higher than that next
                         year, it's in our plan. What's the amount it's gonna go
                         to, John? Forty-five percent. we see it
                         continuing, and that's remarkable when you think FORTY
                         percent of EVERY transaction and for Ticketmaster, this
                         big company that five years ago didn't know what an
                         Internet was; they thought it was a toaster. Uh...and
                         that's not disrespectful, I, quickly add to Fred Rosen,
                         who built that company, who did a fantastic job doing
                         it...I'm just saying that, in fact, it didn't exist. On
                         the travel side, fifteen percent of all travel is
                         online; that's remarkable is...I men,

                         ticketing is a relatively small category. Travel is in
                         the trillions. So...fifteen percent online migration.
                         My feeling about travel is that travel migration online
                         is going to go fairly quickly. I can't imagine that
                         people will really want to get the
                         information...actually get questions answered, asked,
                         et cetera in all different parts of the kinds of things
                         that interactive travel can do online. I think
                         everybody's gonna go online in terms of their travel
                         products. I think it's gonna be true for all
                         businesses. I think that the idea of businesses
                         outsourcing their travel to other people when there
                         is--are these interactive systems that allow you to do
                         it much more efficiently and without anybody, so to
                         speak, in the middle in bricks and mortar, kind of,
                         situation. I think that there's enormous opportunity as
                         to our colleagues at Expedia on the business side for
                         online migration. Home shopping, from the first hour fo
                         the first day, I the first year it's up to
                         ten percent of HSN's business. It was profitable since
                         its inception. It is the big, I think, growth engine of
                         HSN. So I see the naturalistic movement to online for
                         accessing goods and services. I also think that as you
                         get the on anytime computer...which is quickly coming.
                         I mean, I think it's a couple of years out probably,
                         but those of us that have them--certainly in
                         offices--and some, certainly, people have them in
                         homes. If you have a cable modem, it's on all the time
                         and you see cable modem adoptions. The more that it's
                         there; the more that there are multiple appliances for
                         accessing information and services and interacting
                         online. The more there's that ubiquity, I think the
                         faster that all goes. And, also, the other thing is
                         it's's so much at the very beginning because
                         it is still run a bit too much by a technical side. The
                         intuitive is needed for normal
                         people to feel comfortable inside these systems is just
                         beginning. In the next few years I think it will adopt
                         more and more and more.

Victor Miller:           Bridging media and your USA've talked
                         about launching a travel channel and Mr. Messier's got
                         five channels, I think, he's done through his Ecco Star

Barry Diller:            Yes.

Victor Miler:            Is that anything that, um...

Barry Diller:            -yes, we've talked about that and we would probably
                         undertake it jointly although, as I say, we already
                         have, already set aside, a pure...Tier One...what is
                         it? It's in the basic tier of DTV where ewe already
                         have a channel set aside in that basic tier on DTV for
                         travel. So I would think it would be fairly
                         naturalistic. If there's nothing else...thank you

[recording device is deactivated]

[end of tape, side B]

Additional Information


     Stockholders of USA Networks are urged to read the proxy statement when
it becomes available because it will contain important information about USA
Networks, the transactions and related matters. Investors and security holders
can obtain free copies of the proxy statement when it becomes available by
contacting Investor Relations, USA Networks, Inc., Carnegie Hall Tower, 152 W.
57th Street, 42nd Floor, New York, NY 10019 (Telephone: (212) 314-7400).
Investors and security holders will be able to obtain free copies of the proxy
statement and other documents filed by USA Networks and Vivendi with the
Securities and Exchange Commission in connection with the transactions at the
SEC's web site at

     In addition to the proxy statement, Vivendi and USA Networks file annual,
quarterly, and special reports, proxy statements and other information with
the SEC, which are available at the SEC's web site at You may
also read and copy any reports, statements and other information filed by USA
Networks and Vivendi at the SEC public reference rooms at 450 Fifth Street,
N.W., Washington, D.C. 20549 or at the SEC's other public reference rooms in
New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on public reference rooms.

     USA Networks, Vivendi and their respective directors, executive officers
and certain members of management and other employees may be deemed to be
participants in the solicitation of proxies of USA Networks' stockholders to
approve the proposed transactions. Such individuals may have interests in the
transactions, including as a result of holding options or shares of USA
Networks' stock. A detailed list of the names, affiliations and interests of
the participants in the solicitation will be contained in the proxy statement
that will be filed by USA Networks with the SEC.