Vivendi Sets Up New Italian Unit in Strategic Expansion Move

Arnaud de Puyfontaine meeting at Consob

Pursuit of Italian soccer rights expected

ROME – French media conglomerate Vivendi is expanding its presence in Italy by establishing a Vivendi Italia unit dedicated to producing and acquiring local content – a move considered key to its plans to create a Southern European media powerhouse centered on premium content and digital distribution.

The new Milan-based unit, which will start up later this month, “will be the vehicle to invest in the Italian creative and cultural industries,” a company spokesman said Wednesday, confirming Italian press reports.

No details have been disclosed on who will be running Vivendi Italia.

The decision to set up an Italian outpost comes shortly after the appointment of Vivendi CEO Arnaud de Puyfontaine (pictured) as executive chairman of Telecom Italia, which Vivendi controls with a 24% stake.

It also comes after potential regulatory setbacks for Vivendi in Italy and a rancorous dispute with Mediaset, Italy’s leading commercial broadcaster, with which Vivendi forged a strategic alliance last year that subsequently went sour.

But a rapprochement between Vivendi and Mediaset is now a more distinct possibility because of soccer. Besides increasing its investment in Italian scripted content of various formats, Vivendi is expected to pursue the purchase of premier league Serie-A Italian soccer rights, which have suddenly come up for grabs. An auction of the rights last week foundered after Mediaset abandoned the process, alleging that it was unfair, and Sky Italia made a bid below the asking price.

Luigi De Siervo, head of sports rights distributor Infront, which is handling the Serie-A rights sale, told Italian news agency ANSA that he was confident “the situation between Vivendi, Mediaset, and Telecom [Italia] would soon lead to a solution.”

“The Sky colossus will face off with the Vivendi, Mediaset and Telecom colossus” for the Series-A rights, De Siervo said, reflecting expectations that their common interest in soccer rights would encourage Vivendi and Mediaset to mend fences.

Analysts at Milan brokerage Equita SIM have also expressed the view that Vivendi’s new Italian content unit and its pursuit of Italian soccer rights are elements that “could bring to Vivendi and Mediaset back together again.”

However, de Puyfontaine said in an interview with financial daily Il Sole 24 Ore that, though he would like to reopen discussions with Mediaset, no such meetings are planned at the moment.

The defunct Vivendi-Mediaset alliance, forged in April 2016, was meant to create a pan-European content platform able to compete with Rupert Murdoch-owned paybox Sky and with Netflix in Southern Europe. (Vivendi owns film and TV producer Studiocanal.) But the deal hit the skids when Vivendi pulled out a few months later and then aggressively purchased Mediaset stock, raising its stake in the company from 3% to 29.9%.

De Puyfontaine is expected to meet with Italian government officials in Rome this week and also members of media regulator Agcom, which in April gave Vivendi a year to cut either its 24% stake in Telecom Italia or its 29.9% stake in Mediaset. Sources say Vivendi will try to mollify regulators by freezing their voting rights in Mediaset to just below 10% at an upcoming Mediaset shareholder meeting.

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