Berlusconi, Murdoch Looking to End Long Battle in Italy TV Sector (Report)

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Murdoch: Is his relationship with Berlusconi on the mend?

The two billionaires reportedly lunched together last month to discuss "disarmament" as Italy's television sector struggles.

ROME – Peace may be brewing in the long and bruising Italian television sector war between media titans Silvio Berlusconi and Rupert Murdoch, according to reports Friday from the Italian media.

A dozen years ago, Berlusconi and Murdoch were allies: Berlusconi encouraged Murdoch to invest in Italy’s then-fledgling satellite television sector, and Berlusconi’s Mediaset was a regular customer for content produced by Murdoch’s Noews Corp. and its subsidiaries.

But after Murdoch emerged as the main player in a consolidated satellite television business, and the resulting company, Sky-Italia, grew to displace state broadcaster RAI as Mediaset’s main rival, the relationship turned sour.

Now it appears the rapport between the two billionaire tycoons may be on the mend. It emerged this week that Berlusconi hosted Murdoch for lunch last month in order to, as a Berlusconi aid is quoted as saying, “get back in touch after a long period of tension and to lay the foundations for a disarmament between Mediaset and Sky as the television market passes through a difficult phase.”

The sector has struggled in recent years due to declining growth rates and falling ad sales amid the country's anemic economic growth.

Reports were that Pier SIlvio Berlusconi and James Murdoch -- the sons and principle heirs of the two moguls -- were involved in the talks.

“All sides share a concern for the further development of the [Italian television] sector,” an unnamed source close to the talks is quoted as saying.

The idea of Berlusconi selling his struggling satellite unit, Mediaset Premium, to Murdoch’s Sky-Italia was reportedly floated, though it appears unlikely such a deal would clear antitrust hurdles. But even without such a acquisition, the companies said there were other ways they could work together: one article noted that the two sides have begun advertising on the other’s platform, and Mediaset has agreed to broadcast some Champions League soccer matches even though the total package was bought by Sky-Italia.

The possible ceasefire between the two sides comes as Berlusconi, a three-time prime minister, battles political rivals Pier Luigi Bersani and Beppe Grillo as part of a protracted political standoff that will decide the country’s next prime minister. Berlusconi is also fighting a three-front legal battle: appealing guilty verdicts that sentenced him to jail for tax fraud and wire tapping abuses, and a soon-to-be decided trial on abuse of power and paying a minor for sex.

Murduch, meanwhile, is fighting his own battles in an array of areas related to journalistic ethics in the U.S. and U.K.

Twitter: @EricJLyman