The chess game to win the European streaming war – VideoAge International
The story begins in 2016, when Vincent Bolloré decided he wanted his French company, Vivendi, to rescue Italian company Mediaset Premium from Silvio Berlusconi, a financially troubled pay-TV service.
Among other companies, Vivendi owns Canal Plus, a European pioneer in satellite and pay-TV services, and in 2016 Bolloré planned to re-enter the Italian TV market — it previously owned Italian satellite TV service Tele Piú in 1996 (before it was sold to 21st Century Fox and renamed Sky Italia) – making him a shareholder in Mediaset’s Premium, which was Sky’s biggest competitor in Italy.
Then, as now, the goal of many large media groups in Europe was to create alliances in order to build a large pan-European content platform so that it could compete with international streaming players such as Netflix, Amazon Prime and Disney Plus, among others.
In 2018, however, Vivendi suddenly reneged on the agreement with Premium (which at the time was a public company, but controlled by Mediaset) causing the de facto closure of the service. Premium’s operation was given to Sky, while the brand remained with Mediaset.
At that time, Bolloré’s expansionist designs in Italy emerged in another way. Leaving Premium to its fate, it turned directly to Mediaset, with the aim of becoming its majority shareholder. Within months, his Vivendi bought floating shares of Mediaset on the Borsa di Milano stock exchange, quickly reaching up to 29.9% ownership, putting majority shareholder Silvio Berlusconi’s Fininvest in serious trouble.
After the initial shock, Fininvest reacted violently, taking legal action to prevent Vivendi from buying more shares and strengthening its relative majority in Mediaset by achieving control of just under 50% (in part by placing shares in the hands of friendly shareholders since Mediaset could not directly buy so much without activating an expensive share buyback offer).
Meanwhile, Vivendi became the largest shareholder in Italy’s main national telecommunications operator, TIM-Telecom Italia (with a 23% stake). Alarmed, the other Italian shareholders of the telecommunications company formed an alliance with the American company Elliott Management and obtained loans from Cassa Depositi e Prestiti (a financial institution 83% owned by the Italian state) to increase the ownership . These actions froze control of Vivendi and removed the French from a management position. And, in an effort to further dilute Vivendi’s influence, the Italian shareholders of TIM negotiated a merger (to create a single Italian telecommunications network) with Open Fiber, a company equally owned by Cassa Depositi e Prestiti and ENEL , the state energy group.
Vivendi’s strong presence in Italy became a big concern for Italian politicians who questioned whether it made sense to hand over major Italian communications assets, such as television networks and a telco, to Bolloré. The answer, of course, was “no”, and under a 2004 law (the so-called Gasparri law, named after Maurizio Gasparri, Minister of Communications under the Berlusconi government), the Italian Communications Authority ( AGCOM) got involved in getting Vivendi out of its dominant positions.
With the AGCOM judgment, Vivendi was forced to entrust a large part of its shares in Mediaset to a blind trust (Simon Fiduciaria), thus preventing it from influencing the company’s important decisions.
With this decision, we come to the second half of 2020 in the midst of a pandemic, when the European Union declared the provision of the Gasparri law (under which AGCOM acted) to be “inadequate”, going on to say that the companies telephone and television networks were consolidating in other EU countries, and Italy should not be treated as a special case.
Since the EU had in effect repealed the Gasparri law and overturned the AGCOM decision in the Vivendi-Mediaset case (a decision also overturned by a court in the Lazio region), the blind trust Simon Fiduciaria was able to leave the scene, and Vivendi regained control of all 29.9% of Mediaset shares.
But as very often happens in Italy, what goes out through the front door can come back through the side window, and so a government decree to combat the COVID-19 emergency had an additional amendment (dubbed the “Amendment” save Mediaset”), which established that AGCOM could still reaffirm its original disposition on the Vivendi-Mediaset matter.
And so, we now come to the present day, with the EU challenging the “save Mediaset” provision (even though it’s still in effect), while Berlusconi’s companies pursue their civil and criminal lawsuits against Vivendi, claiming that the French group did not respect the law, first with Premium and later with Mediaset.
It is clear that, ultimately, the real fight is to know who will become the major European player in streaming, and Mediaset has been working for some time now on the creation of Media For Europe (MFE), a pan-European television group to which Bolloré has joined opposite. , which would initially bring together television networks in Italy, Spain and Germany.
For this project, and through a series of acquisitions of shares on the open market, Mediaset became the majority shareholder of the German television group ProsiebenSat1, even if it is still excluded from its management. Then there is major ownership (but not control) of the Spanish television network Telecinco. In Spain, Vivendi succeeded in legally stopping the acquisition of Telecinco by Mediaset (while Bolloré has no stake in Telecinco), blocking or at least postponing the creation of MFE by Mediaset.
Conversely, Mediaset’s strategy worries Vi-vendi. It is a clash between two strong personalities – Berlusconi and Bolloré – neither of whom wants to cede control of such an important commercial initiative in the European media market. They always play chess and the outcome is always unpredictable. Meanwhile, Mediaset has already decided where MFE will be based, choosing Amsterdam, the Netherlands, for tax opportunities.
(By Enzo Chiarullo and Mauro Roffi)
audio version (a DV works service)
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