Four years after their botched pay-TV deal, where Vivendi walked away from plans to buy Mediaset’s pay-TV unit — a pact that was supposed to lead to a strategic alliance that could have given the family-controlled companies scale to compete against streamers — the barons and their progeny continue to duke it out. This time around, however, indictments and accusations of political meddling are raising the level of hostilities.
Bolloré, who is Vivendi’s former chairman, current CEO Arnaud de Puyfontaine were indicted by Milan prosecutors on Dec. 12 in a probe called Operation Unfair Play.
The Italian probe stems from a Mediaset lawsuit claiming that in 2016, Vivendi plotted to drive down Mediaset stock price by planning to dishonor their $1 billion deal to buy its Mediaset Premium pay-TV unit. Vivendi then allegedly took advantage of the ensuing devaluation to raid Mediaset, in which the French company now owns a roughly 30% stake. Commenting on why the pay-TV deal went sour, de Puyfontaine in 2016 said, “If you tell me you are selling me a Ferrari but instead it turns out to be a Fiat Punto, there is a problem.”
Under Italian law, an indictment doesn’t imply guilt — nor does it mean that Bolloré and de Puyfontaine will stand trial.
Vivendi, which denies wrongdoing in the Mediaset deal, has just lodged a complaint with the European Commission claiming Italian media legislation barring cross-ownership of media companies, passed when Berlusconi was in power, is a “blatant infringement of EU law.”
It’s due to this legislation, known in Italy as the Save Mediaset law, that Mediaset has managed to freeze most of Vivendi’s voting rights in Mediaset, relying on the fact Vivendi also owns a large chunk of Italy’s top telco, Telecom Italia.
In Europe, spectators of the long-running feud say it’s still anyone’s guess how it might play out. “My experience is that disagreements between businesses are much better handled sitting face to face around a table than by calling in the suits,” says François Godard at Enders Analysis, who adds that charges leveled against Vivendi sound “a bit conspiratorial.”
Several analysts note that Berlusconi’s linear-TV empire, which has been especially vulnerable during the pandemic, doesn’t have a credible game plan for the digital age. Meanwhile, Vivendi is sitting pretty, largely due to its ownership of core asset Universal Music Group. Ultimately, Mediaset has more to lose than Vivendi, says Godard.
Adding another layer of complexity is Mediaset’s nebulous plan to create an Amsterdam-based pan-European entity called MediaForEurope (MFE) that would merge Mediaset’s Italian and Spanish units and comprise the group’s 24.9% stake in German broadcaster ProSiebenSat.1. But MFE has been put on indefinite hold after Vivendi, which opposes the entity’s governance structure, recently scored legal victories against it in Madrid and Amsterdam courts.
As the legal wrangling rages on, the only thing that’s certain is the suits are getting richer in Europe.