This article originally appeared in
August 8, 2006
Italy eyes Mediaset's new role
Berlusconi empire will have hand in political right


    ROME -- Mediaset was for years the power
    behind Silvio Berlusconi's political throne.
    Now, in the wake of Berlusconi's razor-thin
    defeat in April, the media giant seems set to
    play the role of kingmaker.

    Mediaset runs three of Italy's seven national
    networks, including the two largest. During
    Berlusconi's five-year tenure as prime
    minister, the broadcasting power was often
    used to explain the government's policies
    and sway public sentiment.

    But while public opinion has turned against
    Berlusconi -- the polling firm Opinioni reports
    his approval ratings as of the end of July
    were a dismal 23% and falling -- there are
    no shortage of candidates eager to assume
the flamboyant Berlusconi's role as the leader of Italy's political right ... with a little help
from Mediaset.

"The leading figures on the political right aren't interested in Berlusconi's money or his
ideas," James Walston, a political scientist at the American University of Rome, said in
an interview. "What they want are his votes and his access to Mediaset."

The most likely candidates to assume Berlusconi's political role are 50-year-old Pier
Ferdinando Casini, former president of the chamber of deputies from the Christian
Democracy party, and Gianfranco Fini, 54, a former foreign minister and deputy prime
minister and the leader of the party that rose from the ashes of Benito Mussolini's
fascists. Both men make a strong case to take over the leadership of the Italian right --
and it's likely that neither could do it without Mediaset's blessing.

"There is no doubt that Mediaset is in a position to crown one of these men the leader
of the Italian opposition and then to make things difficult for (newly elected Prime
Minister Romano) Prodi," Claudio di Sandro, an author and media sector analyst with
Rome's Catholic University, said in an interview.

The next question is to ask which person Mediaset -- which is to say, Berlusconi --
will anoint.

One factor is determining who will offer stronger guarantees to safeguard Mediaset's
future. Prodi has said he is considering several options to limit the broadcaster's
influence, such as stripping the company of one national network, or setting caps on
advertising revenue or market share.

But the biggest factor is whether the 69-year-old Berlusconi is willing to admit the time
has come for him to step aside.

"My own opinion is that Berlusconi is not going to anoint Casini or Fini or anyone else
as long as he believes he has a chance to rehabilitate his image and return to power
himself," a media specialist working as a consultant with Prodi's office said, asking not
to be further identified.

Is there a chance that Berlusconi -- Italy's richest citizen -- could yet return to power?

The conventional wisdom is that he cannot. Since losing to Prodi by just 0.018 of a
percentage point in April, Berlusconi's coalition has performed steadily worse in
regional elections in May and a hotly contested referendum vote in June. And with age
working against him, a series of gaffes and miscues have harmed the leader's image,
pollsters say.

But the same insiders caution that it may still be too soon to dance on Berlusconi's
political grave.

"Weeks after the election, Berlusconi hasn't officially conceded the election and he
has embarrassed himself in public since leaving office, making himself look more like
an angry child than someone who should be prime minister," Maria Rossi, co-director
of Opinioni, said in an interview. "That said, Berlusconi has been counted out before
and has somehow come back."

If that is indeed the game plan, it could play into the hands of the Prodi government,
which benefits from disarray among the opposition parties.

"If Berlusconi insists on trying to remain politically relevant, then that could translate
into a long and healthy government for Prodi," the American University's Walston said.

How does all of this effect the business end for Mediaset?

The company, which is by some counts Europe's largest media empire, lost a lucrative
source of income when Berlusconi was voted out of office. Its three networks
received an estimated €1.1 billion ($1.4 billion) in government contracts during
Berlusconi's five years in power -- a revenue source likely to slow to a trickle with
Prodi in charge. And there's no doubt that it will lose the favor of regulators and
influence peddlers without such obvious ties to political power.

But Mediaset CEO Giuliano Adreani has always been successful in running a tight ship
despite Berlusconi's political maneuverings, and there seems to be no reason why
they wouldn't continue now that the company's controlling shareholder is out of office.

"Whatever the former prime minister tries to do in the coming months and years, I don't
see Mediaset getting sidetracked," Javier Noriega, chief economist with investment
bankers Hildebrandt and Ferrar, said in an interview. "It's a company run very

During the campaign, Prodi said that he hoped to see a day when the nation's
television networks no longer played key political roles as they do today. A pleasant
notion, experts say, but nothing likely to happen any time soon -- no matter what
happens to Berlusconi's political fortunes.

"An apolitical Mediaset?" asked Catholic University's di Sandro. "It's one of those
things that looks good on paper, but I don't see it happening while Berlusconi is still
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Volume 77; Number 9
Volume 77; Number 9
Silvio Berlusconi