MILAN — The long-awaited merger of Italy’s debt-ridden pay TV channels Telepiu, owned by Vivendi Universal, and News Corp.’s Stream was finally sealed Wednesday.
Vivendi U has bought out News Corp. and will own the new pay TV platform outright (Daily Variety, Dec. 20). No financial details were disclosed in the announcement from Vivendi U TV arm Canal Plus, although analysts put Stream’s value at $480 million.
In the four years that the deal has taken to broker, the two platforms have fallen deeper and deeper into debt. In 2001 Stream lost $360 million and Telepiu $198 million.
Antitrust watchdogs nixed last year’s merger attempt that would have given Vivendi U 75% of the new company and Murdoch 25%.
Wednesday’s deal was pushed through after News Corp. bought the 50% it didn’t own in Stream from Telecom Italia for $42 million, forcing the telcom giant to write off its $75 million investment in the pay TV misadventure. This freed News Corp. to sell Stream to Vivendi U.
The merger still needs antitrust approval, which it is expected to get.
Deal will finally create a single operator in Italy, where pay TV is under-developed compared to the rest of Europe and the U.S. because viewers have a wide choice of free-to-air channels.
Stream has about 800,000 satellite and cable subscribers. Telepiu has signed up 1.8 million subs since its launch in 1990.
The two financially beleaguered platforms incurred heavy losses mostly due to the high cost of soccer rights. Telepiu is also one of the key Italian film financiers, investing more than $42 million each year in the local movie industry.