At the moment, only two things in Fininvest’s future are clear: Silvio Berlusconi has resigned as president of his $ 7 billion entertainment conglomerate to enter Italian politics, and he is getting out of the film business.

After spending $ 50 million annually for the last five years on feature film production as a partner in Penta Film, Fininvest won’t finance any more Italian comedies, French co-productions or adventures in Hollywood. Nor will it be involved in theatrical film distribution. It’s not even interested in pre-buying TV rights to Italian feature films.

“We’re going back to concentrating on television. Our involve-ment with film production will be zero. Zero. Zero,” said Carlo Bernasconi, CEO of Silvio Berlusconi Communications.

The business partnership that linked Berlusconi and film producer Vittorio Cecchi Gori in Penta Film created one of Europe’s most dynamic film production entities. The five-year contract binding the two personalities in what was, by all accounts, often a tempestuous partnership, expires in April.

Many in Italian film are wondering what will fill the vacuum left by the Penta powerhouse. Vittorio Cecchi Gori says the answer is Vittorio Cecchi Gori.

“The Cecchi Gori Group will continue to produce and distribute feature films. How many? That only depends on how many good scripts we find on the market,” he said.

Getting ready

Cecchi Gori has been preparing for the demise of Penta for more than a year. He has been buying up movie theaters, picking up distribution rights to films acquired by Penta and releasing them via his own Cecchi Gori distribution wing, and continuing with production of a new crop of films under his Cecchi Gori banner. Giuseppe Tornatore’s “A Simple Formality,” starring Gerard Depardieu and Roman Polanski, is tipped to go to Cannes. Gianni Amelio’s latest, “L’America,” has a likely slot at the Venice fest.

While all production and some of the distribution activity shifts to Cecchi Gori, Penta Distribuzione will continue to operate until the end of this year to release its slate of about 40 films.

Penta Film, in much the same way, will continue to exist in a greatly reduced form, to manage the TV rights to the 300-film library of Penta productions. Reteitalia (Fininvest’s software division) holds the Italo TV rights.

Fininvest’s future investment in film will be limited to the acquisition of TV rights for foreign and Italian pix. Bernasconi said Reteitalia is cutting back its acquisition of features for TV by a full 50%. The division’s TV production budget is being cut 20% to about $ 30 million.

“We’re not cutting back because we’re disappointed in the cinema. We simply have a huge library of feature films. We’ve invested over 1,000 billion lire ($ 500 million) since 1980 in building up our film library,” Bernasconi said.

He denied rumors that Fininvest was trying to sell the Cinema 5 theater chain. He stressed the spending cuts for film production were decided prior to the fall appointment of Franco Tato as managing director of Fininvest. Tato had been brought in by Berlusconi to pare operating expenses at Fininvest and reduce the group’s sizable debt, which most estimates place at 3 trillion lire ($ 1.5 billion).

The exec denied speculation that Fininvest was seeking a partnership with a U.S. major for a new theatrical distribution banner. Cecchi Gori also denied those rumors, saying he’ll handle distribution on his own for now.

Rival Italian producers, as well as directors resentful of Penta’s financial clout, have complained that the group held the Italo film biz in an iron grip and that it flooded the market with films, some produced or acquired mainly to fill Fininvest’s TV schedules.

Won’t be missed

In some quarters, the demise of Penta will not be greatly mourned. But with public broadcaster RAI also reducing its film production budget, the lack of Penta production coin is going to worsen an already severe financing crunch for Italo cinema.

How will it cope?

“I think it will be more difficult (to produce Italian films without backing from Penta),” said Oscar-winning director Tornatore. “Fewer films will probably get made. The Italian film business may bounce back stronger and more authentic. Or it may wither away altogether.”

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