Mediaset reportedly looking to Spain as first step in European strategy

Mediaset may move to consolidate its Spanish operation as the first step of a strategy to create a pan-European TV powerhouse, according to Italian financial daily Il Sole 24 Ore.

According to the newspaper, the Italian broadcaster is mulling a plan to acquire the 48.4% of Mediaset España that it does not already own as the first step towards creating a consolidated pan-European broadcaster.

Shares in Mediaset España, which controls leading commercial channels Telecinco and Cuatro, rose on the news.

The latest report of plans to consolidate the Spanish outfit follow a similar report by Bloomberg last September that also saw Mediaset España’s share price rise, but which was denied by Mediaset.

According to Il Sole 24 Ore, the acquisition of Mediaset España could be followed by moves to establish a pan-European powerhouse, possibly with German commercial broadcaster ProSiebenSat.1 and France’s TF1.

Mediaset already has a relationship with those two broadcasters in the shape of the European Media Alliance, created four years ago to foster closer collaboration between European broadcasters in the face of enhanced threats from digital players such as Netflix and Amazon.

The latest report of Mediaset’s interest in its Spanish operation came as Morgan Stanley published a note revising its price target for the broadcaster downwards in the light of a need for additional investment to combat the threat presented by digital players and an ongoing softening of the European advertising market. According to Morgan Stanley, the broadcasters most immediately impacted by the combination of a need to make substantial investment and the advertising downturn are Mediaset and its putative German partner ProSiebenSat.1.

Mediaset VP and CEO Pier Silvio Berlusconi last year said that the broadcaster was working on a plan to forge an alliance with other European broadcasters, with it taking a leading role. Berlusconi specifically ruled out working with French media giant and Canal+ owner Vivendi. The latter had been Mediaset’s preferred partner for a pan-European strategy until the pair spectacularly fell out over Vivendi’s withdrawal from an agreement to purchase Mediaset Premium in 2016.

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