Mediaset’s Berlusconi says Vivendi to blame for losses

Mediaset chief executive Pier Silvio Berlusconi has blamed the collapse of the Italian broadcaster’s pay TV deal with Vivendi for its record €294.5 million loss last year.

Speaking to journalists in Italy, Berlusconi said that if Vivendi had honoured its side of the deal to take control of Mediaset Premium, the company would have broken even in 2016.

Mediaset has estimated the negative impact of Vivendi’s alleged violation of its contract to be €341.3 million, contributing  to an overall loss for Mediaset’s domestic operations of €380.1 million. The losses in Italy were offset to some extent by the strong performance of Mediaset España, which turned in a profit of €171 million.

Mediaset Italy delivered negative cash-flow to the tune of €288 million in 2016, compared to positive cash-flow of €75.5 million for the prior year, while Mediaset España’s cash-flow improved from negative €73.3 million in 2015 to negative €15 million last year.

Berlusconi told journalists that Vivendi must respect its original contract with Mediaset for the purchase of Premium and the pair’s exchange of shares, and that it was up to Vivendi to find a solution. He said that no substantive talks had taken place between the pair.

Berlusconi said that Mediaset would comment at a later stage on the ruling by Italian regulator AGCOM that Vivendi must sell down either its stake in Telecom Italia or its stake in Mediaset – acquired in stages at the end of last year – in order to conform with the country’s media concentration rules.

AGCOM said that Vivendi could not simultaneously hold its sizeable stakes in Italy’s principal telecom operator and leading commercial broadcaster and would have to sell one or the other within 12 months. It ordered Vivendi to submit a plan confirming how it would comply with the order within the next 60 days.

Vivendi has said that it will challenge the ruling.

Mediaset chief financial officer Marco Giordano meanwhile said that he expected Mediaset Premium to deliver revenues of between €630-640 million this year.