Always Another Game To Play

Michael Hedges May 3, 2015 Follow on Twitter

Reordering the media world is taking a pace, if not dimension, only a few saw coming. Opportunity is created in all this disruption, certainly for the few most nimble or most lucky. Unease is palpable among those trying to make ends meet or trying to meet the end. The spotlight follows the most important actors, at least until the curtain falls.

With most of Italy’s media dynasties under one form of stress or another the appearance of Rupert Murdoch at the home of Silvio Berlusconi this past week attracted wide-spread speculation. The Murdoch family principally controls pay-TV operator Sky Plc, recently created by an internal share-swap among UK/Ireland BSkyB, Sky Deutschland and Sky Italia. The Berlusconi family principally controls broadcaster Mediaset, which owns pay-TV operator Mediaset Premium.

This particular meeting had “several themes,” said Mediaset Deputy Chairman Pier Silvio Berlusconi, son of the former prime minister, at the Mediaset board meeting where he was named company CEO, reported ilfattoquotidiano.it (April 29). “It was a meeting in accordance with the relationship we have had with the Murdoch family for a long time.” Attending with the elder Mr. Murdoch was son Lachlan, appointed co-chairman of News Corporation and 21st Century Fox a year ago. Yes, back in 1998 Mr. Murdoch tried to buy Mediaset.

Perhaps the media titans and their presumed heirs talked about football. Mr. Berlusconi is “in the final stages” of selling a 51% stake in football club AC Milan to Asian investors for a sum in the vicinity of €500 million, reported the Financial Times (April 30). Last summer Sky Italia and Mediaset struck a rights deal with Lega Serie A, of which AC Milan is part, for three years ending in 2018 at a nice round €943 million per season. Sky Italia gets every match on its satellite platform while Mediaset Premium will get digital terrestrial rights for matches involving eight teams, including AC Milan. Mediaset outbid Sky Italia last year for UEFA Champions League matches rights in Italy through 2018 at a stunning €700 million. Financial losses at AC Milan are between €60 and €70 million annually, noted Corriere Della Sera (April 30).

Many observers, Italian and otherwise, have concluded that Mediaset, all or part, is in play. At the first of last week speculation centered on Vivendi chairman Vincent Bolloré’s reported interest in expanding the Canal+ pay-TV brand and using a €15 billion war-chest to do it. In early April Reuters (April 7) reported M.Bolloré interested in taking a run at Sky Plc, 39% held by the Murdoch family. After stock-traders raged for a day or so all parties backed away from the suggestion.

“We have met the men of Vivendi several times and there are chances we will consider something, but for now nothing is concrete,” said the younger Mr. Berlusconi. “Areas of possible cooperation (with Vivendi) are many but our control over Mediaset is not in question.” Vivendi will hold a significant stake (8.3%) in Telecom Italia once Brazilian broadband provider GVT is spun to Telefonica and M.Bolloré, said Bloomberg (April 29), may raise the holding beyond 10% as he raises his personal holding in Vivendi. Possibilities, say various reports, include Vivendi acquiring all of Mediaset Premium, perhaps to roll it into Canal+, or Vivendi with Telecom Italia taking a significant stake in Mediaset itself.

The other “theme” widely discussed in Italy and beyond is the senior Mr. Berlusconi’s intention if, indeed, something of an asset sell-off is on the table. Certainly as a consumate 20th century politician and deal-maker he is basking in the attention. But his public career as an elected official is ahas reached a nadir. His political party Forza Italia is in tatters. Some suggest he’s raising money to repair both. He once said his greatest passion was politics, “after football, of course.”

See also in ftm Knowledge

Media in Italy

The Italian media market is totally unique and very competitive. Italian consumers are quickly embracing new media and the advertising community is quickly changing. And hovering close is Italy's richest person - Silvio Berlusconi. 112 pages, includes Resources, PDF (October 2012)

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