De Benedetti: the Darth Vader of Italian TV.Industrialist sought the demise of Silvio Berlusconi's empire, leaving Italy rudderless in the process Television and the control of telecommunications have been the source of political instability in Italy, causing a rift with France and problems in the European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community . As indicated by Francesco Merlo in Corriere della Sera Corriere della Sera ("Evening Courier") is an Italian daily newspaper (first in sales [2]), published in Milan. It is the most famous Italian national newspaper, and among the oldest, founded on Sunday, March 5 1876 by Eugenio Torelli Viollier. , Italy's largest daily, this instability has been caused by "strong [competing] interests between Fininvest and Olivetti." Fininvest is the $6.4 billion holding company owned by 60-year-old media tycoon turned politician Silvio Berlusconi Silvio Berlusconi (born September 29, 1936) is an Italian politician, entrepreneur, and media proprietor. , and Olivetti is part of a $6.3 billion diversified conglomerate controlled by 61-year-old industrialist Carlo De Benedetti. Fininvest is an enterprise dominant in multimedia, including television, pay-TV, print and cinema. Olivetti, through its parent company, COFIDE, is a major figure in publishing, telephony and interactive TV as well as a content provider. The problem is that COFIDE is ailing at the rate of $1.1 billion a year and needs Fininvest's market share to survive. Indeed, the "engineer" (as De Benedetti is commonly known) doesn't have the money or the market space to save his group: hence the strategy that left Italy rudderless. In order to understand the players and the game, it is necessary to look at the background of these two companies and then at the political arena they created. Regrouped under the new name Mediaset, Fininvest is reported to be 76 percent owned by Berlusconi. Mediaset's true ownership, however, is hidden via offshore banks, purportedly for tax reasons. In Italy Mediaset controls three private TV networks (Canale 5, Rete 4, Italia 1), a daily newspaper (II Giornale), a weekly news magazine (Panorama) and a soccer team (Milan) and has interests in a pay-TV service (Tele +). Even though the group is profitable, it had to pare down Verb 1. pare down - decrease gradually or bit by bit pare minify, decrease, lessen - make smaller; "He decreased his staff" more than $2 billion of state bank loans that it accumulated during its rapid growth. These loans now stand at $900 million. Through the COFIDE group and its subholding CIR (Committed Information Rate) In a frame relay network, the average transmission rate in bits per second (typically Kbps) for a virtual circuit. It defines the maximum rate that the network can handle under normal conditions. , De Benedetti controls Olivetti (computers, software and, through Omnitel, digital cellular phones), Editoriale L'Espresso (the daily La Repubblica This article is about the Italian newspaper. For the Peruvian newspaper, see La República. La Repubblica (meaning: "The Republic") is the main[2] Italian daily general-interest newspaper. and the weekly L'Espresso), L'Abaco Eletronico (a radio network) and Finegil (16 local newspapers). De Benedetti's operations have been racking up losses at a fast pace. In 1995 Olivetti's computer division registered losses of close to $320 million and a total debt of $2 billion, of which $480 million went to the 15-year cellular phone license and $510 million was used to build the cellular infrastructures. Omnitel should be profitable by 1998, but meanwhile it shows operating losses of $144 million a year and offers poor competition to the state's Telecom cellular service. De Benedetti's editorial operations are now breaking even, at best. In order to deal with these massive losses, De Benedetti is said to be planning to sell a few of CIR's holdings. He is likely to cut costs by unloading the computer division and to bring in cash by selling his very profitable Cerus group in France. In addition, the industrialist has issued new stock, bringing $1.5 billion into Olivetti. It is said that he will ultimately dismiss some 6,000 workers to cut costs. But De Benedetti's key strategy is to move his group quickly and heavily into a promising multimedia business: publishing, telephony, television, pay-TV and software. Unfortunately, there isn't room for large new multimedia players like De Benedetti in Italy today. Furthermore, De Benedetti doesn't have the financial resources to force himself on this market. His only option, therefore, seems to be to weaken or get rid of Berlusconi while at the same time seeking strategic political and industrial alliances. In order to achieve this ambitious, yet controversial plan, De Benedetti has used the strength of La Repubblica (Italy's second largest daily) and L'Espresso (the country's second largest weekly) to hurt Berlusconi politically and to support Walter Veltroni Walter Veltroni (born July 3, 1955) is an Italian politician, leader-elect of the Democratic Party, and Mayor of Rome since 2001. He was elected as first Democratic Party leader on October 14, 2007, winning a open primary summing around 2. in his quest to head the former Communist party Communist party, in China Communist party, in China, ruling party of the world's most populous nation since 1949 and most important Communist party in the world since the disintegration of the USSR in 1991. , PDS (1) (Processor Direct Slot) A single expansion slot on certain, early Macintosh models that was used to connect high-speed peripherals as well as additional CPUs. Providing a channel directly to the CPU, the PDS coexisted with NuBus slots on some models. . According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. some accounts, Berlusconi was forced to enter politics to save his media empire. Reportedly, the PDS faction supported by De Benedetti would have dismantled Fininvest if the PDS had won the 1994 elections, recalling Berlusconi's state bank loans and revoking his TV licenses. During the 1994 elections campaign, La Repubblica and L'Espresso spared nothing in their assault on Berlusconi. This was done with such venom that some observers attributed Berlusconi's subsequent center-right political victory to public sympathy and the underdog factor. Berlusconi counterattacked on two fronts. For starters, he had the president of his media conglomerate A media conglomerate describes companies that own large numbers of companies in various mass media such as television, radio, publishing, movies, and the Internet. Terminology , Fedele Confalonieri, give interviews that revealed De Benedetti's real interests. At the same time, Berlusconi continued to discuss various political reforms with PDS boss Massimo D'Alema. D'Alema distanced himself from the PDS faction led by De Benedetti. In the process, D'Alema got some venom of his own from La Repubblica and L'Espresso. Berlusconi has been plagued with legal problems in connection with allegations of bribery. But it has been pointed out that the magistrate who accused Berlusconi was in communication with De Benedetti, who is himself appealing a jail verdict for bank fraud (the courts are holding $64 million worth of De Benedetti's COFIDE stock in escrow for possible use in compensating bank shareholders). De Benedetti's use of Veltroni's PDS faction is also ingenious. Veltroni, a well-known film and TV expert, is the editor of L'Unita, the PDS daily newspaper. In addition, Veltroni is a member of the lame duck An elected official, who is to be followed by another, during the period of time between the election and the date that the successor will fill the post. The term lame duck generally describes one who holds power when that power is certain to end in the near future. parliament and a close friend of Paolo Mieli Paolo Mieli (born February 25 1949) is an Italian journalist. Born in Milan, Mieli debuted as journalist at 18 for L'Espresso, where he remained for some 20 years. , the editor of the powerful daily Corriere della Sera, who went public against Berlusconi. (Mieli also aspires to the RAI rai n. A form of popular Algerian music combining traditional Arabic vocal styles with various elements of popular Western music and featuring outspoken, often controversial lyrics. chairmanship.) Furthermore, Veltroni helped to form a parliamentary committee purportedly designed to reform TV in Italy. Thus Berlusconi's much maligned ma·lign tr.v. ma·ligned, ma·lign·ing, ma·ligns To make evil, harmful, and often untrue statements about; speak evil of. adj. 1. Evil in disposition, nature, or intent. 2. conflict of interest could have been easily resolved by the special committee that Veltroni came to control. In reality, television reforms - to which Berlusconi did not object - were for all practical purposes stalled by De Benedetti's PDS faction as part of his strategy. De Benedetti's multi-pronged strategy generated four payoffs. First, it allowed Veltroni to pressure for PDS control of RAI, Italy's state owned radio-TV broadcaster. Second, Veltroni didn't promote reforms supporting local TV stations, which could seriously compete with De Benedetti's profitable local newspapers. Third, it demonized Berlusconi and his TV group, prompting journalist Saverio Vertone to comment that "the left is not denouncing [Berlusconi's] conflict of interest anymore, but it is using it for partisan purposes." Fourth, it pressured RAI into some industrial alliances. Berlusconi declined to provide De Benedetti with the microwave structure needed for his Omnitel cellular phone system since Berlusconi has a competing operation in the planning stages (possibly with British Telecom The telephone and communications carrier that provides services in Great Britain and Northern Ireland. It used to be a division of the British Post Office, but was privatized in 1984 under Margaret Thatcher's administration. ). So De Benedetti called upon RAI. After this deal, not only did the PDS and La Repubblica and L'Espresso stop calling for the resignation of RAI Chairman Letizia Moratti Letizia Brichetto-Arnaboldi Moratti (born 26 November 1946) is an Italian businesswoman and politician. She is the current mayor of Milan. She is Milan's first female mayor. Biography Moratti was born Letizia Brichetto-Arnaboldi in Milan. (who was appointed by Berlusconi during his brief term as prime minister), but they supported Moratti in her ultimately successful power struggle against former RAI President Raffaele Minicucci. A further payoff for De Benedetti could be a sought-after alliance with RAI that would result in a pay-TV service whose decoders would be incompatible with those of the existing Tele +. RAI is reportedly prepared to invest $180 million in such a service. As if this wasn't enough, Moratti's family, rich from the oil business, is said to be ready to invest in De Benedetti's Editoriale L'Espresso. It can be assumed that, if that investment comes to fruition, the future of able RAI Chairman Moratti will be assured. De Benedetti would like it better still if the next RAI president were someone favored by Veltroni's PDS. However, all De Benedetti's problems cannot be solved solely by RAI. For starters, his son Rodolfo, president of CIR, reportedly views their publishing group as a political liability and would like to sell it. Such a move is also being advanced by the friendly Corriere della Sera, which is controlled by Fiat's Giauni Agnelli. La Repubblica editor Eugenio Scalfari, possibly tired of using his newspaper as a weapon, is reportedly trying to form a group of investors to buy out De Benedetti's shares. In addition, De Benedetti's support of Veltroni has angered a faction of the PDS and the left in general. Not only does the head of the PDS refuse to talk to La Repubblica or L'Espresso (D'Alema prefers the rival TV of Berlusconi), but, with the assistance and caretaking of Prime Minister Lamberto Dini Lamberto Dini (born March 1, 1931) is an Italian politician and economist, former Prime Minister and Foreign Minister. , the political left has strengthened the role of IMI IMI International Masonry Institute (Washington, DC) IMI Israel Military Industries IMI Institute of the Motor Industry IMI International Market Insight IMI Imposto Municipal Sobre Imóveis (Portugal) , an investment bank formed by a group of banks. IMI will compete with the giant Mediobanca, a Fiat fiefdom fief·dom n. 1. The estate or domain of a feudal lord. 2. Something over which one dominant person or group exercises control: and an investor in De Benedetti's COFIDE. IMI will be involved in bringing Berlusconi's Mediaset public (possibly on June 24, 1996), a move that will reduce Berlusconi's stake to 49 percent and generate an estimated $1.5 billion for Mediaset. According to PDS member of parliament Lanfranco Turci, this IMI maneuver "irritated Carlo De Benedetti." Through his press officer, De Benedetti declined requests for an interview. Some analysts feel that De Benedetti's means justify the ends, but it is also acknowledged that the stakes are high and the risks enormous. The De Benedetti-Berlusconi fight of the titans could explode and - as The European and The New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times pointed out - the political instability could affect not only Italy but the European Union. De Benedetti's Problems: * Anger of other PDS leaders over his use of Walter Veltroni * Closed Italian market for expansion into pay-TV, TV and multimedia * Court-ordered frozen assets Frozen Assets is a novel by P.G. Wodehouse, first published in the United States on July 14 1964 by Simon & Schuster, Inc., New York under the title Biffen's Millions, and in the United Kingdom on August 14 1964 by Herbert Jenkins, London. ($64 million worth of his shares) of the COFIDE holding company * Embarrassing links with Antonio di Pietro, the former magistrate who prosecuted Berlusconi * Embarrassing political use of Editoriale L'Espresso * General losses on the order of $1.1 billion * Losses and problems with the cellular phone service * Pending jail sentence jail sentence jail n → peine f de prison for bank fraud * Reduced ownership of Olivetti (to 15 percent) De Benedetti's Potential Solutions: * Ally with friendly financiers like Luigi Giribaldi, who now holds 9.11 percent of COFIDE, in order to replace Mediobanca, Generali and Pirelli * Ally with RAI for pay-TV and Omnitel links * Get rid of money-losing divisions such as the computer division and sell profitable non-multimedia units to bring in fresh capitol * Reduce Berlusconi's Mediaset market share and Berlusconi's influence by any means necessary By any means necessary is a translation of a phrase coined by the French intellectual Jean Paul Sartre in his play Dirty Hands. I was not the one to invent lies: they were created in a society divided by class and each of us inherited lies when we were born. * Reduce work force by 6,000 people * Aim to reward the efforts of Walter Veltroni on De Benedetti's behalf with the PDS leadership * Through his brother, leftist left·ism also Left·ism n. 1. The ideology of the political left. 2. Belief in or support of the tenets of the political left. left Senator Franco Debenedetti (who writes his surname differently), pressure the state to "stop [Telecom Italia's] Stream video-an-demand project with Bell Atlantic" * Try to bring up the value of CIR/COFIDE shares * Use the family of RAI's Moratti as investors in Editoriale L'Espresso Berlusconi's Partners: Albacom (Mediaset)* Banca Agricola Montevano (Mediaset) Banca di Roma (Mediaset) Banca Nazionale del Lavoro Banca Nazionale del Lavoro SpA is an Italian banking firm. Founded in 1913 as Istituto di Credito per la Cooperazione, it was nationalized in 1929. It was re-privatized and listed on the Milan Stock Exchange in 1998, before being acquired by French banking group BNP Paribas (Mediaset, Albacom) British Telecom (Cellular phone plans) Capital Research (Mediaset) Camit (Mediaset) IMI (CARIPLO CARIPLO Cassa di Risparmio delle Provincie Lombarde (Italian Bank) , Monte dei Paschi, San Paolo for Mediaset) Leo Kirch Leo Kirch (born 21 October 1926 in Volkach, Bavaria) is a German media entrepreneur. Life Leo moved shortly after he was born to the nearby town of Würzburg. After completing high school he studied marketing and management as well as mathematics at the University of (Mediaset, Tele +**) Mediobanca (for Berlusconi's Mediolanum IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. )(***) Morgan Stanley (Mediaset IPO) Johann Rupert (Mediaset, Tele +) Al Waleed (Mediaset) De Benedetti's Partners: Acer (Taiwanese company that may take over Olivetti's computer division) Apple (Acorn) Banca Agricola Mantovana (COFIDE) Bell Atlantic (Infestreda) Carlo Caracciolo (Editoriale L'Espresso, brother-in-law of FIAT's Gianni Agnelli) CCIL CCIL Chester County InterLink (West Chester, Pennsylvania) CCIL Clearing Corporation of India Limited CCIL Canadian Council of Independent Laboratories (Omnitel) Chase Manhattan (Olivetti) Robert Fleming (Olivetti's broker) France Telecom (Infestreda) Generali (COFIDE) Luigi Giribaldi (COFIDE) Hughes (GM) far HOT, satellite telecommunications(****) Lehman Brothers (Olivetti investment bankers) Mediobanca (COFIDE) Pirelli (COFIDE) U.S. West (Videostrada, a $4 billion regional cable system in Italy) * Albacom (British Telecom, MCI (1) (Media Control Interface) A high-level programming interface from Microsoft and IBM for controlling multimedia devices. It provides commands and functions to open, play and close the device. (2) (Microwave Communications Inc. , Banco Nazionale del Lavare) ** Tele +, with 800,000 pay-TV subscribers, will break even at 900,000 subs. *** Mediobanca (Comit, Credito Italiano, Banca di Rome) **** Hughes' DirecTV also bid for the TV rights to Italian soccer matches outside Italy. Biased Major Italian Media Outlets (with Circulation or Viewership) LEANING LEFT: Corriere della Sera (D 717,000) La Repubblica (D 550,800) L'Unita (D 160,000; S 350,000) The Economist - Italian correspondent Tana de Zulueta L'Espresso (W 452,000) RAI-3/Tg3 (AD 2,740,000) TMC/News (AD 800,000) LEANING RIGHT: II Giornale (D 236,000) Panorama (W 542,000) Italia 1/Studio Aperto (AD 1,531,000) RAI-2/Tg2 (AD 4,079,000) Rete 4/Tg4 (AD 1,636,000) D = Daily, W = Weekly, S = Saturday, AD = Audience Daily Note: The author is involved in the attempt to reform broadcasting in Italy |
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion