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SILVER LINING FOR SILVIO

After a period of rapidly dwindling political credibility, a resounding win in last week’s national media referenda has put the wind back in Silvio Berlusconi’s threadbare sails.

But even with the legislative heat turned off and the blessing of Italian voters regarding his ongoing ownership of three private TV webs, the tycoon-turned-politician insists that the sale of a substantial interest in Ms TV holdings will go ahead, possibly at a higher price.

A statement released by Berlusconi following the results of the June 11 referenda announced his willingness to relinquish control of Mediaset, Fininvest’s TV division.

Put on hold to await the outcome of the referenda, ongoing negotiations mainly center on offers from Australian media giant Rupert Murdoch to buy up to 100% of Mediaset, and from Saudi prince al Walid ben Talal, angling for a 30%-40% stake.

Al Walid’s interest is believed to fit snugly into the dimensions of Fininvest’s so-called “Wave Project,” under which a third of the conglom’s TV assets would be sold to one or more offshore investors.

Others tipped to come in with the Saudi prince on the deal are Germany’s Kirch Group and Time Warner. The latter, however, has denied that negotiations are taking place.

Popular opinion – backed by statements from Fininvest president and CEO Fedele Confalonieri – sees Berlusconi favoring the “Wave” option as a means of removing a conflict of interest between his political and business activity, yet keeping a hand in the running of his media empire.

Murdoch’s interest in acquiring the entire parcel is believed to be a less attractive solution to Berlusconi.

With some 30%-35% of Mediaset to be floated on the stock market, and a further third of the division remaining the property of Berlusconi’s family, the “Wave” deal would still make it relatively easy for Berlusconi to keep control of his company, especially with his daughter Marina at the helm. She currently figures in a top management role.

Al Walid is expected back in Milan in the coming days to continue talks, and Confalonieri has announced that a decision regarding the sale of Fininvest will be made public in the next two to three weeks. He also stated that the group’s sweeping referendum victory means the price for outside investors could now be significantly higher.

Along with the ruling on ownership of more than one private TV channel, other referendum questions answered in Berlusconi’s favor covered a proposal to drastically reduce the number of commercial breaks during the broadcast of feature films, and a bid to limit ad sales companies from selling TV advertising to more than two networks.

The referenda were all rejected, with votes of 57% to 43% on TV ownership, 55.7% to 44.3% on commercial breaks and 56.4% to 43.6% on the sale of advertising.

No surprise

The majority of “no” votes on all three of these matters came as no surprise in the wake of a Fininvest publicity barrage in which a large number of popular small-screen celebrities under contract to the group were mobilized, urging Italians to block the proposed reforms.

Employing the same promotional muscle (from Fininvest ad division Publitalia) which has been behind Berlusconi’s political initiatives ever since his entry into the ring, the Fininvest campaign stated its case in simple terms designed to go straight for the jugular of Italy’s uncommonly telecentric society. The basic thrust was the threat of less TV, and in particular, less films on TV.

“Berlusconi’s victory in the referenda was the victory of the soap operas and films that Fininvest broadcasts continuously,” said political and business opponent Vittorio Cecchi Gori.

Whatever the nature of Berlusconi’s referendum success, the media mogul chose to interpret the results as a renewed show of confidence in his political leadership abilities. Along with his allies, the Forza Italia leader has begun calling for the current caretaker government headed by Prime Minister Lamberto Dini to step down, and for new general elections to be held in the fall.

In a separate Fininvest development, Marcello Dell’Utri announced to the group’s administrative board last week that he would be willing, if necessary, to step down as head of Publitalia, the country’s most powerful ad sales company.

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