Remember That Old Saying, “Don’t Get Mad, Get Even” – Well, Watch Murdoch and De Benedetti Do Just That To Their Joint Foe Berlusconi

Philip Stone October 15, 2009 Follow on Twitter

Suddenly it’s not all going Silvio Berlusconi’s way. He lost immunity from prosecution when Italy’s highest court ruled his own law protecting him wasn’t valid; his Finninvest company lost big-time in a civil suit to arch-foe Carlo de Benedetti (Finninvest order to pay up €750 million), and there are reports that de Benedetti may be a key to get Rupert Murdoch, Berlusconi’s public villain number 1, into terrestrial digital broadcasting which is the last place that Berlusconi wants him. The war is still very much on.

Murdoch’s newspapers in London (The Times) and in New York (Post) for months have been detailing every aspect of Berlusconi’s alleged sexual escapades at any given opportunity, and it’s probably no coincidence that this blow-by-blow reporting began after Berlusconi’s government doubled the VAT (usage tax) on Murdoch’s Sky Italia’s subscriptions. Thus it could only be expected that The Times would write, “Little could have more clearly shown Mr. Berlusconi’s contempt for the law than his lawyer’s Orwellian assertion to the court that the prime minister was no longer ‘first among equals’ but ought to be considered ‘first above equals’…He has sought to live above the law, now he will be consumed by it. It is surely time that Mr. Berlusconi stop putting his own interests ahead of the country’s.  He should resign.”

But it’s not just Murdoch’s newspapers biting at the bit. The Financial Times said, “Italy would be better off without him.”  The New York Times editorialized, “The Berlusconi era has gone on far too long, with far too few positive accomplishments. It is time for both coalitions to develop a new generation of more constructive and competent leaders to put before the electorate.”

And Berlusconi hardly helped himself in news conferences and TV appearances.  At a news conference he complained about his legal costs, having spent millions of Euros on “lawyers and judges”. Hmmm. He quickly corrected that to “consultants and lawyers” but seeing as his FinnInvest earlier in the week had been found liable in civil court for bribing a judge it was yet one more black eye.

And then on TV later that night during a discussion program he was interrupted by a female politician, and he exploded, “I recognize you are increasingly more beautiful than you are intelligent.” But 58-year-old Rosy Bindi immediately fired back, “I am not one of the women at your disposal, Prime Minister.” Second black eye.

Serious as Berlusconi’s loss of prosecution immunity may be, one should not lose sight of that civil case Finninvest lost because at its root is something that is not just causing the prime minister financial stress today, but it is the seed from which huge competitive problems may well grow in the future.

Back in the 1990s Berlusconi’s Finninvest locked horns with CIR, a Carlo de Benedetti company, and in a battle of financial titans Berlusconi won a court decision allowing him to take a controlling interest from CIR in the Mondadori publishing house with de Benedetti ending up with the Expresso Group. Sixteen years later, in 2007, a court ruled that Berlusconi’s lawyer, Cesare Previti had bribed the judge in that Mondadori case although Berlusconi himself was cleared. That ruling fueled a civil suit filed by de Benedetti and last week a court ruled that Finninvest had to pay damages to CIR totaling €750 million ($1.1 billion, £700 million). Finninvest said it would appeal.  

That Mandadori battle forever soured the relationship between two of Italy’s richest men. Is it any coincidence that the de Benedetti Expresso Group’s media properties have been leading the way in pouncing upon every piece of Berlusconi scandal they could find?  Its La Republicca newspaper has led the daily charge -- Berlusconi is suing for libel -- and its widely read and respected weekly Expresso Magazine keeps up the pressure.

So there’s certainly no love loss there, but how might de Benedetti help Murdoch stick the knife in even more? A small part of the Expresso Empire is Rete A, a digital TV network that is dwarfed by Berlusconi’s Mediaset. But if de Benedetti sold Rete A to Murdoch or to someone with whom Murdoch could do business, then arrows would fly at Berlusconi’s Achilles heel – his digital terrestrial TV empire which has no real competition right to speak of, and doesn’t want any. 

Digital is important in Italy. Berlusconi’s government saw to it legally that Mediaset and RAI – the state-owned public broadcaster that Berlusconi wields great influence upon because of government appointments -- are required by law to migrate to the digital platform by 2012. Murdoch competition on the terrestrial digital TV platform is the last thing that Berlusconi wants to see.

But given all of these problems one can’t help admire Berlusconi for the way this week he went on the offensive. Together with his tourism minister, a former beauty contestant who had once worked for one of Berlusconi’s TV channels, Berlusconi announced that the world’s media newsrooms are going to be targeted with “good” Italian news to combat all those global stories about his sex life and his legal problems. A task force will monitor the world’s media for what they consider negative Italian (Berlusconi) stories and the offenders will quickly find themselves bombarded with positive Italian news about “a generous, truthful, and audacious Italy – the Italy of entrepreneurs, art, cultural events and our products.”

As far as Tourism Minister Michela Vittoria Brambilla is concerned, all of these negative Berlusconi stories are not about the man but rather are an attack by “an anti-Italian group working against Italy with the single aim of discrediting and destroying the prime minister.”

Well, if that “group” can’t do it then Murdoch and de Benedetti no doubt will give it their all!