Mediaset back in the black

Italian broadcaster Mediaset returned to the black last year, posting a net profit of €90.5 million – up from a loss of €294.5 million last year – on revenues of €3.631 billion, down from €3.667 billion.

The improvement in the company’s finances was down to an 11.1% cut in operating costs, thanks to a reduction in integrated TV costs in Italy in particular. Mediaset’s result in 2016 had been hit by the impact of its aborted pay TV deal with Vivendi.

Mediaset said that it expected advertising revenues to improve this year, despite a negative trend in the first two months. The group expects its exclusive rights to air the football World Cup in both Italy and Spain will help it improve its performance, but noted that market visibility remains poor.

The advertising market had a negative impact on Mediaset’s performance last year, with ad sales in Italy dipping compared with the previous year and revenues in Spain rising only marginally.

The group also highlighted the “transformation” of its pay TV offering Mediaset Premium, which it said was now “less rigidly dependent on football” and based on a new model that involved opening up the digital-terrestrial pay TV platform “to third parties”.

Mediaset recently struck a wide-ranging pay TV deal with rival Sky whereby its pay TV services would be offered alongside Sky’s on satellite and Sky would develop an offering to sit on the DTT platform.

Mediaset’s pay TV offering posted revenues of €587.4 million, down 5.2% year-on-year.