Telecom Italia Announces Plans to Sell La7
The former Italian state telephone monopoly seeks to sell the country's smallest national television network along with some of its other holdings in hopes of paying down debt.
ROME – Former Italian state telephone monopoly Telecom Italia announced Thursday that it would look to sell La7, the country’s smallest national television network, and other holdings of its Telecom Italia Media subsidiary as the beleaguered company looks to pay down debt.
La7 is the only national free-to-air broadcaster that does not belong either to state broadcaster RAI or Mediaset, the television and film giant controlled by former Italian Prime Minister Silvio Berlusconi. RAI and Mediaset own three national networks each. The company owns around 5 percent of the free-to-air television market, though it has been growing slowly since 2010.
La7 is also smaller than Sky-Italia, the satellite broadcaster and subsidiary of Rupert Murdoch’s News Corp.
La7 was formed in 2001 when Telecom Italia acquired second-tier broadcaster Telemontecarlo, which predominantly ran reruns of Italian and foreign programs, and changed its format, increased the amount of original programming, and rebranded it as La7 -- Italian for “The Seventh” -- referring to its role as the seventh of seven national networks.
Telecom Italia said Thursday that profits rose 10 percent in the first quarter compared to the first quarter of 2011, but almost all the growth came from the company’s holdings in Brazil and Argentina. Domestically, profits fell 2.9 percent in the first quarter, that that was an improvement from previous quarters. The company was also carrying a staggering €30.3 billion ($40.3 billion) in debt on its books.
Telecom Italia Media, which owns La7, as well as a controlling stake in MTV Italia, a small production studio, and significant broadcasting infrastructure assets, is setting its television assets apart to prepare for the sale process, officials said.
After the sale, Telecom Italia said it would “focus on core activities” in the telecommunications sector. Cash raised from the sale of La7 and other Telecom Italia Media holdings would be used to pay down company debt.
A new owner might also help improve La7’s fortunes as it struggles against RAI, Mediaset, and Sky-Italia.
Antitrust officials have said in the past that they would block an acquisition of La7 by either RAI or Mediaset.