“The Italian media are currently fending off a so-called ‘French invasion.’ A total of 177 takeovers of Italian companies, by the French, took place between 2012 and 2016, while Vivendi is currently fighting for power at Mediaset and Telecom Italia,” stated the Strasbourg-based European Audiovisual Observatory.

To recap what is now becoming a Napoleonic war between Mediaset’s Silvio Berlusconi and Vivendi’s Vincent Bolloré: In April 2016 Vivendi signed an agreement to acquire 89 percent of Mediaset’s money-losing, pay-TV service Premium.

Instead of real money, Vivendi used 3.5 percent of its shares valued at 870 million euro. However, in order to buy Premium, Vivendi received 3.5 percent of Mediaset’s share, worth 150 million euro (in effect, Vivendi paid 720 million euro for Premium).

But, four months later, Vivendi reneged on the agreement and instead went for control of Mediaset. Since last December, and unbeknownst to the Berlusconi family, Vivendi had been amassing Mediaset’s stock to the point of reaching a 28.8 percent share. Bolloré’s surprising move sent Berlusconi into a panic, raking in more Mediaset shares on the open market to reach its current 38.266 percent ownership.

In terms of ownership, Berlusconi controls Mediaset through his financial group, Fininvest, and Bolloré controls Vivendi through his Bolloré Group, which owns 20.4 percent of Vivendi, which in turn owns the French pay-TV group Canal Plus.

At the moment Berlusconi and Bolloré are at an impasse over Mediaset: the former cannot go over 40 percent ownership until this month, while the latter cannot go over 30 percent without triggering a public offering for the remaining 70 percent.

The understanding among analysts is that, for Bolloré, the deal for Premium was a so-called Trojan Horse: an excuse to enter into Mediaset. Berlusconi’s lawyers charged that Bolloré reneged on the Premium deal to push Mediaset’s stock down to acquire it at lower price.

Now, in order to reduce the number of Mediaset’s outstanding shares on the market, at the end of June Berlusconi’s team will propose Mediaset’s board to buy 10 percent of its own shares.

In France, Bolloré is known as a raider with mysterious goals. For example, it is unclear what his strategy is for Canal Plus’ disappointing pay-TV programs and for iTélé (now CNews), Canal Plus’ 24-hour news channel, which is entangled in controversy over Bolloré’s connection to iTélé’s host Jean-Marc Morandini, who has been accused of multiple counts of sexual wrongdoing. Reportedly, last year Canal Plus lost some 400 million euro. As for Vivendi, in 2016 it reported adjusted net profits of 755 million euro with revenues of 10.812 billion euro.

French analysts can only explain the feud with Berlusconi as being about control of Southern Europe’s entertainment sector, considering that Mediaset also has a strong TV presence in Spain.

In Italy, Bolloré also controls the nation’s largest telephone company, Telecom Italia, with a 24.68 percent share, and has interests in Mediobanca (Italy’s main merchant bank) with a 7.9 percent share, and Assicurazioni Generali with a 0.13 percent share.

Mediobanca is Generali’s main shareholder with 13 percent of shares. Reportedly, Bolloré is looking to increase his Mediobanca ownership to a controlling 20 percent, which will give him de facto control over Generali and thus over Italy’s two main sources of financial capital.

Telecom Italia is also a cable and OTT company, and considering the U.S. experience, convergence between telecoms and television is inevitable.

According to the European Audiovisual Observatory, Italy’s three major media players are: 20th Century Fox — comprising the pay-TV company Sky Italia and Fox International Channels Italy — with a revenue share of 15.7 percent; Fininvest — comprising the free-to-air commercial broadcaster Mediaset and the Arnoldo Mondadori publishing company — with a share of 14.7 percent; and RAI — Italy’s public service media company — with a share of 13.5 percent. The other half of revenues are scattered among smaller players, with individual shares of three percent or less. (All figures are for 2014.)

Although Italy’s three major audiovisual media operators have similar revenues, their audience shares are different: RAI and Mediaset have overall audience shares of 37.2 and 32.4 percent respectively; Sky is mainly a pay-TV broadcaster and has an audience share of only 5.4 percent. (All those figures are for 2015.)

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