MILAN — Italy’s top film producer and distributor, Vittorio Cecchi Gori, is negotiating the sale of two packages of films worth $175 million to Silvio Berlusconi’s TV group Mediaset and pubcaster RAI, financial daily paper Sole 24 Ore reported Saturday.
The deal would put an end to the long dispute between Cecchi Gori and Berlusconi over their U.S. joint venture Penta, created in 1989 and dissolved in 1994, as some of the pictures to be sold to Mediaset are still owned by Penta.
After the joint venture was dissolved, its film library was split between the two partners, except for about 300 pictures, which remained with Penta and whose rights expire in three years. These are the pics Mediaset will buy, for about $70 million, together with a package of new films for about the same amount.
According to Sole 24 Ore, Rai would buy some new films for $35 million.
The sale will help Cecchi Gori solve his financial problems, mainly due to the producer’s two TV networks, TMC1 and TMC2, and their acquisition of TV rights for football matches, the report said. The producer’s TV unit, Cecchi Gori Communications, is expected to post a loss of about $30 million this year and its debt is at least $175 million.
Despite their rivalry, both Mediaset and RAI would be interested in Cecchi Gori’s TV business, the report said.
Cecchi Gori Group reacted to the press reports by saying that some parts were correct, as the group is in fact negotiating with Mediaset on an agreement over Penta and the sale of other films.
However, a CGG spokesman said it does not need to be saved because “banks understand our business, which requires big investments to acquire TV rights.”