Sale of Italy's La 7 TV Network Set to Shake Up Broadcast Sector
ROME – With Wednesday’s apparent departure of the two most high-profile bidders in the sale for the television assets of Telecom Italia Media, it now appears that whatever company wins the bidding that Italy will have a new player in its burgeoning small screen sector.
On Wednesday, Silvio Berlusconi’s Mediaset officially bowed out of the bidding for La 7, the smallest of Italy’s seven national television networks, MTV-Italia, and a multiplex broadcasting infrastructure. Mediaset’s bid was considered a long-shot in any case, given the significant antitrust concerns that would come with a company that owns three national networks buying a fourth.
A few hours later, Sky-Italia, the Italian satellite broadcaster controlled by Rupert Murdoch’s News Corp., issued a statement saying that contrary to Italian news reports that it was never interested in acquiring Telecom Italia Media’s holdings.
“The company's CEO Andrea Zappia clarified in June that Sky's expression of interest was limited to gaining access to Telecom Italia Media’s financial data and that it had no intention of buying the company,” the brief statement said.
That still leaves a dozen or so companies that have expressed interest in acquiring all or part of Telecom Italia Media’s television holdings, but with Mediaset and Sky-Italia out of the picture and cash-strapped state broadcaster RAI not interested, it means that whatever company wins, it will be a new player in the sector.
La 7 controls only around 4.5 percent of Italy’s national television audience, but reports are that the sale will still fetch at least $300 million for Telecom Italia, the former Italian state telephone monopoly looking to pay down debt and focus on its core telephone business. Telecom Italia Media is thought to have at least $250 million in outstanding debt on its balance sheets.
The Discovery Channel is considered one of the two main favorites in the bidding, along with 3-Italia, a mobile phone company controlled by Hong Kong-based Hutchison Whampoa and its billionaire founder Li Ka Shing. But it’s the 3-Italia bid that is most intriguing: if it wins, the company would branch from telephony to television at the same time rival Telecom Italia is making the opposite move, and gaining access to Telecom Italia Media’s multiplex broadcasting infrastructure would allow 3-Italia to expand its digital bandwidth, significantly boosting its telephone transmission capacity.
Other companies reported to be interested in the sale include private equity fund Clessidra; Spanish toll road operator Abertis; EiTowers, an Italian telecommunications tower operator; Italian software company LT Media; and Telecom Italia ad buyer Cairo Communications.
Non-binding bids in the deal are due by Sept. 24.