MILAN — Stream, Italy’s No. 2 digital TV platform in which Rupert Murdoch is planning to acquire a stake, posted a $190 million loss in 1998 and has accumulated $440 million in losses over the last five years, president Miro Allione said.
Established in 1993 by the state-run giant Telecom Italia to develop and distribute multimedia services using the infrastructure of its parent company, Stream has 135,000 cable and satellite subscribers and expects to reach 600,000 households by the end of this year, he said.
Even if this target is met, Stream will also post a huge loss in 1999, Allione said.
In December, News Corp. Europe signed a preliminary deal with Telecom Italia to buy 80% of Stream, but the introduction of a bill limiting the acquisition of soccer pay TV rights has made News Corp. reconsider its plans.
Allione said that if News Corp. pulls out of its original deal to acquire 80% of Stream, “other buyers will be found very easily; there is a line outside our doors.”
Stream’s conditions unchanged
As for conditions for purchase, Allione said they “remain the same: $625 million to be invested in two years, $500 million of which to buy soccer rights.”
Telecom Italia is trying to create a group of international media companies to replace Murdoch if the tycoon withdraws. They might include TF1, DirecTV, Viacom, AT&T and Telefonica.
Italy’s leading publishing house, RCS, might buy a stake in Stream. But the Milan-based company, which lost millions in the Carolco misadventure, is expected to be a very cautious player in the audiovisual industry.
Commenting on the 1998 financial results, Allione said that Italy’s dominant TV platform, Telepiu, controlled by Canal Plus, is surely doing better.
“However, Canal Plus recently said it invested $3.2 billion in Italy, half of which in Telepiu. Since Telepiu is still losing money, this means that Canal Plus has lost $1.6 billion in Telepiu,” Allione said.