Berlusconi's Mediaset Posts a Loss for First Half
The company announces a net loss of $27.5 million with revenues also on the slide, as falling ad sales and continuing recession in Italy prove a drag.
ROME – Silvio Berlusconi’s Mediaset reported a loss for the first six months of the year, as the recession in Italy and falling ad sales continued to hurt the company's bottom line.
Italy’s biggest private broadcaster earned a net loss of $27.5 million (€20.5 million) in the first half of 2014, compared to a net profit of $40.3 million (€30.1 million) in the first half of 2013.
Domestically, Mediaset earned a net loss of $39.3 million (€29.3 million) for the year’s first half, compared to a profit of $23.6 million (€17.6 million) for the same time period in the previous year. Mediaset’s failure to obtain World Cup rights was also a major factor for their decline in ad sales at home. Soccer-mad Italians tuned in to RAI and Sky Italia to catch the biggest sporting event of the year.
Italian domestic soccer, however, will continue to play a key part of Mediaset revenue strategy for paid channel subscriptions, as they hold broadcasting rights for Serie A, the top soccer competition in the country from 2015 through to 2018.
Internationally, despite a rise in ad sales in Spain, helped in large measure by airing the World Cup, the broadcaster’s Spanish unit only reported a net profit of $28.7 million (€21.4 million), compared to $40.3 million (€30.1 million) the previous year.
Labor and operating costs continue to drop as Mediaset has announced new cuts across the company. Given the general uncertain state of Italy’s economy, analysts were cautious to forecast a bounce back in the second half of the year.