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The Murky Mediaset Mystery

It is looking as if Mediaset, the television empire run by ex-Italian prime minister Silvio Berlusconi and his family may end up with a new partner for the Berlusconi family very soon.

The surprising 30% boost in the value of Mediaset shares could be the result of a suspected, though not proven, attempt at market rigging.  Sleepy August when almost everyone in Italy is at the beach, is the ideal time for a little market tinkering.

Recently, the share price in Mediaset has been rising rather more than it should in view of the dire straits the company finds itself in.  The reason for the increase is said to be a rumor that someone is interested in acquiring a sizeable chunk of the Berlusconi family company.  Who could be interested in such an acquisition?

Several names are being broached in Italy’s press:

  • Tarak Ben Ammar
  • The Emir of Qatar who is the owner of Al Jazeera
  • Vladimir Putin

So far, it is know known which, if any, of these illustrious names may jump on board the somewhat rickety Mediaset boat.

Market Rigging?

Some are wondering whether names have been dropped in a deliberate attempt to boost the value of Mediaset shares.  In the last three weeks or so, Mediaset shares have gained 30% in value.

Is the increase legitimate or is it the product of sophisticated market rigging?  Italy’s markets regulator CONSOB is said to be investigating, and this is Italy, the land of Machiavellian plots and schemes.

Berlusconi would probably like to make a quick billion or so; he seems to be running short of funds, as mentioned in this recent article: Where has Berlusconi’s Money Gone?  And Berlusconi needs lots of cash to fund his widely rumoured comeback campaign.

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The motives for market rigging certainly exist, but they remain for the moment, mere suspicions.

The Near Collapse of Mediaset

Since Berlusconi lost power, shares in Mediaset have fallen dramatically, losing nearly 50% of their value.  The reason for the decline in Mediaset shares may be linked to the fact that Berlusconi no longer holds the top spot in Italy, a position which allowed him to give his own company a few helping hands.

Being prime minister also meant Berlusconi could attempt to delay attempts at regulating Italy’s television industry.  Now, he cannot, so his company can no longer benefit from systematic delaying tactics and legislation which is designed to make life for Mediaset’s competitors tougher.

Note that Mediaset probably would not have come into existence but for friendly legislation granted by Italy’s parliament.  More political assistance has been keeping the company going.  Having the company’s founder as prime minister did not do Mediaset any harm whatsoever, as one might imagine, although the helping hands do not seem to have been strong enough.

Sky Italy is one such competitor which believes Berlusconi government legislation attempted to limit its profits and, therefore, its expansion, to the clear benefit of Mediaset.

The global crisis has undoubtedly had a detrimental affect on the fortunes of Mediaset despite the company virtually dominating the market for television advertising in Italy.

Mediaset Premium Bombs

A hastily put together attempt to sell a product called Mediaset Premium which is similar to rival Sky’s pay TV offering did not go according to plan and is losing money.

The future is not looking rosy for Mediaset, though it might look better if a new partner emerges.  If that partner happens to be Berlusconi’s chum Putin, lots of people in Italy are going to be very worried.  Berlusconi friendly propaganda galore would follow in such an event.  A terrifying prospect.

 

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