ROME — Italian commercial broadcaster Mediaset posted a sharp 36% drop in fiscal 2011 net profit to €225 million ($297 million), as advertising at its channels in Italy and Spain continued its downward trend due to a harsh economic climate.
The European TV heavyweight, controller by former Italo prime minister Silvio Berlusconi, also warned it expected net profit to be even lower for 2012, unless the ad market is boosted by the UEFA European soccer championship and the London Olympics this summer.
Mediaset’s revenue fell 1% to $5.26 billion.
Advertising intake in Mediaset’s domestic Italian market fell 3.3%, including its Mediaset Premium pay TV operation on DTT.
But while Mediaset’s free-to-air channels are suffering shrinking audiences, Mediaset Premium, which competes with Rupert Murdoch’s Sky Italia paybox, ended the year with revenue up 14% to $814 million.
Mediaset has announced a restructuring plan to cut production costs and investments by $330 million a year, and CEO Fedele Confalonieri has warned that layoffs are likely.
Meanwhile, Berlusconi’s personal income rose 20% in 2011 to $63 million, making him Italy’s highest-earning pol.