The future of Mediaset, the jewel of the Berlusconi empire: renew or sell?

The future of the empire left by Silvio Berlusconi, valued at more than 6,000 million euros, is unknown, particularly that of the “crown jewel”, the Mediaset television group, whose cultural influence forged the power of a magnate who, however, did not finish adapting his media empire to the digital age.

A year and a half ago, Berlusconi transformed the emblematic brand into Media For Europe (MFE) to compete with new operators such as Netflix and Amazonbut its business continues to depend on general television, whose golden age is long gone.

“If the Berlusconi family does not assume the digital transformation and realizes that this lack of will can penalize them, they could decide to sell the asset to other groups”, explains the professor of Strategy at the Milan Polytechnic School of Business Giuliano Noci.

The former prime minister, who died last Monday at the age of 86, saw the potential of private television in the 1990s: he settled in Italy with Canale 5, exported the formula to Spain under the Telecinco brand and tried his luck in France with La Cinq, the first general private channel in the country.

“He understood before others the role that television had in the creation of consensus, also political. He was in the forefront”, argues Noci.

At the first signs of wear and tear, Berlusconi successfully adapted the channels to new tastes: they were leaders for more than two decades and grew to become mediaset in a company with almost 5,000 workers and a turnover of more than 4,000 million euros in 2020.

But the recipe is not infallible: Telecinco lost leadership in Spain in 2022 while Mediaset Italywhich held the audiovisual monopoly in the country, has seen its income decrease due to new foreign platforms.

It is not easy to predict who will now be in charge. Berlusconi owned 60% of fininvestthe family’s holding company, which controls almost 50% of MFE, albeit excessively personal.

The rest of the capital is distributed among other groups, such as the French vivendiand private shareholders.

The key is now found in the tycoon’s will, which will clarify whether the balance falls on one of his five children, who for now share the remaining 40%, or if his last partner, Marta Fascina, enters the scene.

“Cavaliere himself, when asked about the future of Mediaset, replied that it would be “not only Italian, but always from my family.””, recalls Luca Davi, specialist in finance and markets of the economic daily Il Sole 24 Ore.

The latest movements do not fully corroborate those words, since the new MFE left Italy to settle in the Netherlands and acquired 28% of the German group Prosiebensat in its pan-European expansion.

In this context, hours after his death, the group’s titles shot up on the Milan Stock Exchange above 13% due to speculation in the economic press about the sale of the media colossus.

Already in 2016, vivendi launched an unsuccessful takeover bid to take over mediaset Italy and still controls 23% of this division, while Berlusconi recently rejected an offer from the American group Discovery, according to some leaks.

“It is hard to believe that the children adopt a violent change of strategy, but much will also depend on the succession knot”, analyzes Davi.

Marina and Pier Silvio, the eldest children, are the only ones who exercise executive power in their father’s businesses. The first as president of Fininvest and the second as CEO of mediaset Italy and who this Tuesday asked their employees “work” to honor the “beloved creature” by Berlusconi and, incidentally, sent a message of continuity to the markets.

The American Allan Friedmannauthor of the only authorized biography of Berlusconiopines today in the newspaper La Stampa that “Marina and her brothers may very well decide within one or two years, or later, to sell Mediaset”, but sees no reason for the operation to be immediate.

The other two large Fininvest companies are of less concern: Mediolanum Bankof which they own 30%, does not cause problems and the Mondadori publishing house (53%) already sold its stake in the newspaper Il Giornale in April, definitively abandoning its piece of the pie in the decadent world of the written press.

The heritage of Berlusconi includes, in addition to the companies integrated into fininvestincluding the Monza football club and the Manzoni theater in Milan, numerous buildings and villas throughout the country.

“Nostalgia is not good in such a business”, illustrates Nocifor whom the absence of “lighthouse“Berlusconi will require his successors to act with pragmatism and incorporate new talent:”If not, the smartest solution is to sell”.

Source: EFE