Pay service Telepiu loses $165 mil in ’98

TV operator's financial troubles continue

MILAN –Italy’s dominant pay TV operator Telepiu, controlled by Gallic media group Canal Plus, posted a loss of $165 million for its fiscal 1998.

Established in 1990 by Silvio Berlusconi, who still retains a 10% stake via family holding Fininvest, Telepiu currently has 1.65 million digital and analog satellite subs, most of whom subscribe to its digital platform D+. Telepiu lost $235 million in 1997.

Italy’s second pay TV platform, Stream, which is controlled by Telecom Italia, reaches fewer than 200,000 households. (News Corp. and Vittorio Cecchi Gori were expected to acquire a majority stake in Stream Monday before Olivetti’s takeover of Telecom Italia put that deal in doubt.)

Long a money loser

Despite its dominant position in Italy’s underdeveloped pay TV market, Telepiu has always been in financial dire straits. Between 1994 and 1997, it accumulated a $490 million loss and Canal Plus, which controls 90% of the company, has been forced to invest massively in the company to keep it running.

At the end of April, Italy’s pubcaster RAI inked a final agreement with Canal Plus under which RAI will take a 5%-10% stake in Telepiu within two years, making a cash payment and providing several digital theme-based channels in exchange for that stake.

The first six theme-based channels produced by RAI will start broadcasting July 1.

By the terms of the deal, Canal Plus’ 90% stake in Telepiu should decrease, as a 35% stake is due to be sold to Italian and European partners. Telepiu’s new shareholders were expected to join Telepiu by the end of May, but the date has been pushed back because talks are still ongoing with several candidates.