MILAN (Reuters) – Mediaset’s shareholders on Wednesday are set to back a plan to make the Netherlands the legal base of Italy’s top commercial broadcaster, potentially paving the way for cross-border deals needed to fight competition from online rivals.
Like other traditional broadcasters, Mediaset is trying to reshape its business, which has been hit by the growth of web advertising giants such as Facebook and Google.
Controlled by the family of former Prime Minister Silvio Berlusconi through its Fininvest holding company, Mediaset has long been targeting cross-border growth in Europe.
But the plan, which initially envisaged a merger of Mediaset’s Italian and Spanish units under a Dutch holding, had stalled due to opposition from Mediaset’s second-largest shareholder, Vivendi.
In May, the two groups reached a settlement to end the legal battle that had dragged on for the last five years, effectively paralysing Mediaset’s strategy.
As part of the deal, Vivendi has pledged to back the relocation to the Netherlands, which virtually ensures the decision will pass at Wednesday’s meeting.
Fininvest owns 44% of Mediaset and Vivendi 28.8%, a stake it will reduce over time under the terms of the agreement.
But analysts said the long delay to Mediaset’s plans to expand internationally may prove problematic.
“Expanding abroad is mandatory for Mediaset to defend its role in the playing field but it may be too late,” said Augusto Prieta, founder of advisory firm ITmedia Consulting.
Mediaset, which controls Spanish broadcaster Mediaset Espana, also has a stake in ProSiebenSat.1 Media and has repeatedly tried to involve the German group in its consolidation drive.
However, ProsiebenSat.1 has shown little enthusiasm so far.. Elsewhere, a planned tie-up between TV broadcasters TF1 and M6 shows the French market is heading for in-country consolidation.
In the five years to 2020, Mediaset’s turnover has fallen 28% to 2.6 billion euros, while Netflix, which launched its services in Europe in 2016, last year became the second largest broadcaster in the region in terms of revenues, based on data and analytics company Ampere Analysis.
For first time last year, online advertising spending in Italy surpassed TV advertising revenue in Mediaset’s key domestic market, historically dominated by traditional broadcasters, research firm Nielsen data showed.
“The European media sector must either find its path, or it will get increasingly smaller and become irrelevant,” Mediaset finance chief Marco Giordani told Reuters last month. “All shareholders in the media industry must think about that.”
Reporting by Elvira Pollina; editing by Valentina Za and Jane Merriman