RCS Video: an enigma inside a puzzle.

Try to figure out RCS and you will face a mystery: No one quite knows who Paolo Glisenti really is, because, you see, Glisenti is now RCS Video.

Officially, the 41 year old Glisenti is RCS Video's CEO and Rizzoli Group's Planning Manager. He's not a producer, nor is he a film-TV industry man for that matter. He's not an entrepreneur nor is he a financier. To partially solve the puzzle, one has to imagine RCS Video devoid of Glisenti. RCS Video's main attribute and the one that stands out is its Fiat -- (Giovanni) Agnelli connection. Therefore, RCS Video has a virtually unlimited availability of money. RCS Video's second characteristic is that it is a vehicle restricted to the Agnellis' closest circle of friends and relatives.

RCS stands for Rizzoli Corriere della Sera Editori, Italy's largest media enterprise with annual revenue of $2.4 billion. RCS also owns Corriere delia Sera, Italy's largest daily newspaper whose writers are kept off-limit to any analytical writing on RCS Video. Rizzoli is 77 per cent owned by Gemina, a holding company also involved in banking and finance worldwide. Over 25 per cent of Gemina is owned by Fiat Group, which is controlled by the Agnelli family. Although the Agnellis have been marginally involved with Italian television since the late 1970's, their push into the audiovisual field came with a home video label in 1984.

In 1990, RCS Video was established to group various Rizzoli holdings in the entertainment field: Vivivideo, Panarecords(allin home video) and RCS Produzione TV. RCS Video's new mandate was to be a European force in home video distribution, TV production and minority investments in various TV enterprises in Italy, France, Spain, Germany, the U.K., and the U.S.A. In order to execute this mandate, Rizzoli is said to have allocated $300 million to RCS Video under the guidance of Luca Cordero di Montezemolo, one of Giovanni Agnelii's closest people. Cordero di Montezemolo, now heading Ferrari Car Co., was also president of Italy's 1990 World Cup Games. He is known as a versatile executive Silva, RCS Video's respected producer and misled the then president of Orion TV International, John Laing, into leaving Orion for a non-existent RCS Video job.

Glisenti, a former financial editor of Corriere delia Sera (1978-1984), became president of Montedison USA in New York, an Italian-based chemical concern, in 1984. He began as a reporter for ANSA Italian news agency in 1970. In 1976, Glisenti moved to So1e24 Oreas a financial correspondent from London. According to some RAI executives, Glisenti is definitely arrogant, but much less so than others at the same level. Explained a journalist for an Italian daily: "He's new in the business. Therefore his insecurity is shown as arrogance."

But, he can well afford his posture. Glisenti's father, Giuseppe, is a former president of RAI and a former president of Rinascente, Agnelli's department stores. In addition, in 1984, Paolo Glisenti's former employer, Montedison. purchased RCS jointly with Agnelli's Gemina.

So today RCS Video is the owner of four per cent of France's TFI, five per cent of Italy's money losing Tele Monte Carlo (share-backed loan), and 100 percent of Cineriz, film archives. [n Germany it owns Kino Verlag I and II (75 per cent), VP Video (75 per cent) and has a production venture with Tele Munchen. In the U.K, RCS Video owns 70 per cent of Najestic, and five per cent of Car]ton TV and Moving Pictures, a film trade publication. In the U.S., it owns 13 per cent of Carolco and has production ventures with NBC and Kevin Costner.

Because of these investments, Corriere della Sera reported that Glisenti is now the 13th media giant in the world, after Silvio Berlusconi (6th) and Ted Turner (7th). He is even placed before TFI 's Francois Bouygues and TV Globo's Roberto Marinho.

But, the question resounds, is everything trumpeted by Corriere della Sera music to the ear? Some American executives acknowledged RCS Video's fortunate stake in TFI and even the timely investment in Carlton TV (though its shares are going through rough times). Some others, however, are critical of RCS Video's other ventures. So far, RCS Video has dumped $60 million into a comatose Carolco and it is expected to send another $17 million with no assurance of a Carolco turn around.

RCS Video's acquisition of Majestic is criticized for its large price-tag ($28 million) in exchange for a library said to consist of mostly films in the public domain. RCS Video's trade magazine Moving Pictures is expected to continue losing money while the four hour mini-series deal with NBC is considered a go1d mine for the American network. Usually the U.S. TV networks pay production companies up to $3 million an hour for the sole broadcast rights for a three year period. In the case of RCS Video, NBC received $7 million from the Italian company in exchange for most territorial rights (for distribution through Majestic). Similarly, RCS Video paid $2.5 million to Kevin Costner for some rights of an eight-hour documentary on native Americans. But, it's argued, it's RCS' money and it can be dispensed however they please. The type of actions that are not condoned are RCS Video's recent handling of Silva and the Italian Bicycle Tour.

Sergio Silva, a former RAI executive, went to RCS Video after producing four seasons of the Octopus series under the PAl banner. At RCS Video, Silva produced two additional seasons for PAl broadcast (and SACIS distribution). Reportedly in RCS Video "there wasn't enough room for two top producers." Therefore Silva was let go by Glisenti. Silva is now independently planning to produce the seventh Octopus series for PAl.

Just after the Silva bomb, RCS Video announced that the PAl - nurtured Italian Bicycle Tour (owned by RCS)was unexpectedly sold to Silvio Berlusconi's network for little more than the amount PAl offered. RAI's reaction was swift. It called the action by RCS unethical and .thus, "froze" all production contracts with RCS Video, valued at $15 million. RCS Video is also burning its bridges with Hollywood, especially after the UCI fracas. As the story goes, UCI, a UIP company, spent over a year negotiating with RCS Video for a series of multiplex cinemas to be built in Italy. After UC[ prepared a 1,000-page report, and just before signing the agreement, RCS video contacted UCI competitor Warner Brothers, who promptly alerted UCI member Paramount, which ultimately was throwing into the pot a home video deal. The proposed agreement was scrapped.

A sour note is also reported at Morgan Creek, which reluctantly let RCS Video out of a contract. These incidents are said to also be affecting RCS Video's most ambitious project to date: the development of Europe's largest video duplication factory outside of Milan. The company, called Euphon, is being built together with Carlton's Technicolor, and even though it signed Disney, it is reported. industry reaction has not been favorable. According to some accounts, Agnelli is personally aware of RCS Video's costly mistakes. However, the source reported, he continues to fully support RCS Video's top management. So far RCS Video has invested an estimated $200 million for a return in the few million dollars range.

Despite its poor record, though, no one expects RCS Video to fail nor does anyone expect Glisenti to be given the boot. To the contrary, Agnelli's continued patronage and a grin and bear it attitude from the international film-TV industry will assure RCS Video's future growth.