Gov't shakeup bolsters Mediaset stock
EmptyROME -- A day after Italian Prime Minister Romano Prodi resigned after losing a confidence vote in the Italian Senate, his coalition rallied to prevent former prime minister and media kingpin Silvio Berlusconi from using the crisis to retake power.
But that move did nothing to hurt Mediaset, the broadcasting giant Berlusconi owns, which saw its shares surge as much as 3.5% in an otherwise flat market on speculation that aggressive media sector reforms backed by Prodi would be weakened by the political climate.
As of late Thursday, there was no progress in naming a new prime minister. Italian President Giorgio Napolitano met with political leaders from all major parties to discuss the best way to proceed. But political analysts said a new candidate to lead the government was not expected until at least Saturday and that the process could drag into next week.
In his deliberations, Napolitano has several options: He could ask Prodi or another member of his coalition to try to cobble together enough support to form a new government; he could appoint a new prime minister not closely aligned with any party to lead a caretaker government for several months; or he could call for new elections that would reshuffle parliament and could hand power back to Berlusconi and his allies.
Many center-left and far-left parties that dominated Prodi's coalition issued statements Thursday saying they would do whatever they could to prevent Berlusconi from gaining from the crisis.
"Only one thing is clear, and that is that we cannot risk having Berlusconi in power again," said Oliviero Diliberto, a member of parliament representing the Communist Party.
Since the crisis started on Wednesday, Berlusconi has been silent. But the performance of Mediaset's shares alone added nearly €60 million ($79 million) to the tycoon's net worth, coming after months in which they failed to keep pace with the Italian Stock Exchange's blue chip index -- based on concerns over proposals for the reform of the Italian media sector.
Among the reforms that may now be put on the back burner is one that would cap Mediaset's share of the total television advertising market to 45% -- below its current share -- and another that would force both Mediaset and state broadcaster RAI to switch one network to less profitable digital technologies by 2009. Now the fate of those reforms is cast in doubt.
The 70-year-old Berlusconi, a multibillionaire, held power for nearly five years before being ousted by a narrow margin in voting held in April. Aside from Media-set, he owns stakes in the publishing sector, telephony and several Internet-related ventures.