Mediaset points to collapsed Vivendi deal for 2016 losses
Mediaset, the Italian commercial broadcasting group, has claimed that it would not have suffered a loss last year if the sale of its pay-TV arm to Vivendi, the French media giant, had gone through.
Mediaset said that its 2016 results had been “radically altered by serious damage on the Italian activities of the group by Vivendi’s contractual violations.”
In April last year, Mediaset and Vivendi announced an agreement involving the exchange of 3.5-per-cent shareholdings in each other, and Vivendi taking 100 per cent of the share capital in Mediaset Premium in a €880-million ($946.4-million) agreement.
However, the agreement collapsed in July after Vivendi said it only wanted to buy a 20-per-cent share of Mediaset Premium and a 15-per-cent stake in the parent company, prompting an ongoing battle between the two companies.
The failed-deal contributed to losses of €341.3 million for Mediaset, which was more than the €100 million that had initially been estimated by its chief executive Pier Silvio Berlusconi at the end of last month.
In a statement, Mediaset said that “a series of extraordinary one-off charges” totalling €269.3 million, as well as additional losses of €72 million, led the group to post an operating loss of €189.2 million last year, compared with profits of €231.4 million in 2015.
Last year, Mediaset's pay-TV service posted an 11-per-cent increase in revenues, reaching €620 million, and the group said it expects sales to grow by between €10 million and 20 million by the end of 2017.
Following the collapse of the deal, in December, Vivendi upped its stake in Mediaset to 28.8 per cent, which prompted Mediaset to call on Agcom, the Italian communications authority, to intervene, claiming that Vivendi was preparing a ‘hostile takeover’ of the company.
Earlier this week, Agcom ordered Vivendi to reduce its stake in Mediaset or Telecom Italia, the Italian telecoms group, within a year because its share in the companies breaches the country’s anti-trust rules.
Agcom did not disclose how much of a stake in either company Vivendi must dissolve, but it has ordered the French firm to present its plan within the next 60 days and it could face a fine worth between 2 and 5 per cent of its revenues.