Vivendi Universal topper Jean-Marie Messier has reportedly pacted with Rupert Murdoch for Viv U to buy loss-making Italian pay TV platform Stream.
“There is an agreement at our level,” Messier told Blighty’s Financial Times, “which means I will definitely go away on holiday on Friday.”
Viv U will pay Murdoch and Telecom Italia $600 for each of Stream’s 650,000 subscribers, valuing Stream at $390 million.
The deal was widely expected after Italy’s powerful antitrust watchdogs let it be known they would nix a merger between Viv U’s Telepiu and Stream, which is jointly owned by Murdoch’s News Corp. and telco giant Telecom Italia (Daily Variety, Dec. 17).
The antitrust body opposed a single national pay TV platform controlled by the two international giants, but said it would accept a single shareholder.
The decision surprised the industry, which had expected the merger to go ahead.
However, insiders believe the right-wing government led by media-tycoon Prime Minister Silvio Berlusconi opposed the Stream-Telepiu merger because a strengthened single pay TV operator would threaten the dominant position of Berlusconi’s TV group Mediaset. Pubcaster RAI also was against the pact.
The two financially beleaguered platforms announced merger plans earlier this year to curb heavy losses incurred mostly through the high cost of soccer rights.
Messier said that the combined entity would break even by the end of 2003. Telepiu wouldn’t have broken even before 2006.
Last year Stream lost $360 million and Telepiu $198 million.