Franco-Tunisian Mogul Tarak Ben Ammar on why Vivendi/Mediaset Could Spawn a U.S.-Style Studio (EXCLUSIVE)

Franco-Tunisian mogul Tarak Ben Ammar has a long history of brokering major media deals in Italy. In 2003 he persuaded Vivendi to sell pay-TV Telepiù to News Corp., paving the way for Rupert Murdoch’s launch of Sky Italia. He was subsequently instrumental to French media company Vivendi entering into Italy’s Telecom Italia. Earlier this month Ben Ammar brought Vivendi and Mediaset together in a media alliance with far-reaching ramifications. He spoke to Variety exclusively about why the deal is going to be a game-changer.

Why did Vivendi become the single biggest shareholder in Telecom Italia after selling off its telcos, in Brazil, France, and Morocco?

The new Vivendi had sold all of their telco assets to reduce their debt. Under the (Jean-Marie) Messier rule they had 24 billion Euros in debt. So they had no choice. That was a necessary financial move to bring the debt down to zero and bring ten billion Euros of cash positive to Vivendi. But once Vivendi, from their sale of their Brazilian telco, had the cash and the Telefonica stock in Telecom Italia, they went and increased that stake in Telecom Italia by spending Euros 3.3 billion, which took us to 24.9 percent. Why? Because first of all Vivendi felt Italy is the European country that’s most backward in terms of Internet penetration. But more importantly, what are we seeing in today’s world? You see AT&T buying Direct TV, Telefonica buying Via Digital, etc. The integration of telcos and media content is the present and the future. So Vivendi felt, since they are a media company, they could help Telecom Italia upgrade their content offering to their 28 million clients. What you are seeing elsewhere as triple or quadruple play.

So how does Mediaset fit into this plan? 

Vivendi is a media company in France with StudioCanal, which has a European and international footprint, but they are not yet a media company in other countries. The alliance with Mediaset is very important because they are in Spain and in Italy. They are in free-TV and pay-TV in Italy. They are in free-TV in Spain, and Vivendi is in free and pay-TV in France. With this alliance they have millions of eyeballs watching our channels every day. Vivendi had 11 million pay-TV subscribers in places like Poland, Vietnam, and Africa, besides France. By adding Mediaset Premium now they have 13 million subscribers. Sky has 19 million, in the UK, Italy, and Germany. So it’s a winning alliance because they now have the possibility of producing content together for at least three countries where they are present together.

Do you see Vivendi/Mediaset as an alternative to Netflix in these territories?

Yes. The major studios tell us there is an alternative to Netflix; they are the ones that helped Netflix’s success by selling their content for hundreds of millions of dollars and now they realise that Netflix doesn’t need them anymore. So they are all telling us: ‘are you real? Are you ready to be a European group that could be an alternative to Netflix?’ Now with this alliance with Mediaset Vivendi is a European group. We have a foot in pay-TV and free-TV and OTT. By the Fall we are going to have an over-the-top in four countries.

Do you think Vivendi/Mediaset has a competitive edge against Netflix?

I don’t know whether we have a competitive edge. I do know that there is room for other players. In America, besides Netflix, there are Amazon and Hulu. And in Europe you have Amazon. Vivendi believes that they could be another important player, and they are probably the only European player. I do think Vivendi has something they don’t have in terms of promotional capacity to get subscribers to go on its OTT, Vivendi’s alternative to Netflix. It costs millions for Netflix to promote their service. Vivendi with its free-to-air channels and its pay-TV, and Mediaset with its channels in Italy and Spain, they have millions of eyeballs watching their channels every day. So Vivendi will promote – free-of-charge really when you think about it – its own content distribution. That’s an advantage that Netflix doesn’t have. That said, there is plenty of room for both of us.

How did you forge this alliance between Bolloré and the Berlusconi family?

My personal relationship with Silvio Berlusconi goes back 31 years, both as a friend and as a business partner. My personal and business relationship with Mr. Bolloré goes back 16 years to when I helped him become the single biggest shareholder in Mediobanca, where I am now a board member. That’s how I became a Telecom Italia board member seven years ago. You don’t make these deals unless there is a desire, an appetite, and a trust factor, which is very very important. Bollore and Berlusconi have both been shareholders in Mediobanca for many years. They know each other from the banking world, it’s a relationship that goes way back. Personal relationships are key because there is an element of trust. But then, I didn’t do the deal alone. We did this with Pier Silvio and [Vivendi CEO] Arnaud de Puyfontaine. The negotiation was with them. I was in the middle because they both knew and trusted each other.

So Silvio wasn’t involved?

No, he was not involved in the detailed negotiations and valuations. But certainly Pier Silvio kept him informed, as I did. But he never sat and looked at the contracts. All of that was done by Pier Silvio.

The Italian press has described this deal as the beginning of Berlusconi’s gradual sell-off of Mediaset to Vivendi once the three-year lock-up period is up

Vivendi has no intention of buying Mediaset. That’s a commitment that both Berlusconi and Bollore told each other. ‘We are here as friends and there is no creeping control.’ We don’t need to buy it! The objective was not a capitalistic venture. It’s unimportant why Vivendi has 3.5 [percent] and they have 3.5. The issue was: what is the industrial plan? And the fact that each takes 3.5 percent of each other is to consolidate their friendship; so that they don’t have to argue about the joint ventures that they are going to do. Vivendi could have gone on the market to buy. But no, it was friendly approach which was about OTT and content and investing hundreds of millions of Euros to produce television and films in three to four countries.

Why could this be a game changer?

If this alliance works they will be the first European media group because there are no others. You could say Sky is European, but really it’s an English group controlled by an American company. Also it will make directors, writers, producers, and agents very happy. There’s another buyer in town! It’s up to them to be competitive, sexy, artist-friendly, content friendly. Can Vivendi be a United Artists of Europe?

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