LONDON (Reuters) - Vivendi Universal's dream of landing a $14 billion cash-rich deal for its U.S. entertainment empire is fast evaporating with final bids likely to fall short of the mark, sources involved in the auction said on Friday.

As the deadline for bids looms on Monday, the media giant is facing a dwindling field of contenders for its Universal film, television and theme park business, with most valuing the assets at least $1 billion below Vivendi's price tag, the sources said.

Vivendi chief Jean-Rene Fourtou, who took over from Jean-Marie Messier last year as the group teetered on the edge of collapse, is sticking by his $14 billion demand, despite the exit of another contender, Comcast Corp.

"I don't think anyone is going to get to that number ($14 billion)," said one source involved in the auction.

The French chief executive is now facing three options: accept a bid below its price tag; pursue a joint venture with no up-front cash with General Electric's NBC or Comcast; or go it alone down the flotation route, sources said.

For now, NBC is considered the leading contender.

U.S. TV network NBC is proposing to combine its channels, including MSNBC and Bravo, with Vivendi's business in a venture controlled by NBC. That option would give Vivendi a minority stake and may be its best hope of getting near its price target.

Among other remaining contenders, a team led by Vivendi vice chairman Edgar Bronfman Jr. has been holding high-level talks this week and is expected to present a second-round bid, a source familiar with Bronfman's activities said.

Viacom, which owns Paramount Pictures, has also been continuing talks but is still only interested in the cable TV business and has already expressed qualms about Vivendi's price demands, one source familiar with the auction said.

Paris-based Vivendi has called for final bids on Monday but bidders suspect that deadline might prove flexible, especially for those not negotiating an outright bid for all the assets.

LIBERTY: IN OR OUT?

Originally seen as a favored contender, cable king John Malone's Liberty Media Corp. backed off the auction in recent weeks, sources familiar with its plans have said.

However, Liberty Media CEO Robert Bennett said on Thursday the cable company remained interested in Vivendi's entertainment assets and would continue to have discussions.

"We continue to be involved but we also continue to be disciplined in our approach," Bennett told analysts.

Vivendi has scrambled to stir up a heated auction but bidders have become increasingly frustrated by its antics.

Hollywood's Metro-Goldwyn-Mayer walked away after submitting a $11.5 billion bid, seen by many as one of the best offers. Comcast also joined the list of departures on Thursday, saying it would not bid but would explore an alliance instead.

"I continue to believe that Vivendi will pursue one of two options: either a joint venture with NBC or delay a disposal this year and pursue an IPO next year," said Mark Harrington a media analyst at Bear Stearns in London.

If the auction does not work out, Vivendi has said it will hold onto Vivendi Universal Entertainment and sell a 25-30 percent stake on the stock market at a later date.

But that could prove a difficult task.

Industry observers note Vivendi faces the complication of an investigation by French authorities into alleged accounting irregularities which could make approval for a flotation tough.

"The underlying performance of the businesses would also make an IPO quite challenging even if one believes there will be a meaningful U.S. economic recovery during the course of next year," said one source involved in the auction.