Italy's Mediaset Buys Stake in German TV Giant ProSiebenSat.1
The Italian media company, controlled by the family of Silvio Berlusconi, has acquired a 9.6 percent stake in the German group for $380 million.
Italian broadcaster Mediaset has bought a stake in Germany’s ProSiebenSat.1 Media in a further sign of consolidation in Europe's television market as traditional networks fight declining advertising revenues and increased competition from Netflix.
Mediaset on Wednesday announced it has bought a 9.6 percent stake in ProSiebenSat.1 for $380 million (340 million euros). The Italian group, which is controlled by the family of former Italian leader Silvio Berlusconi, is looking to diversify beyond its home country's weak advertising market.
Like all traditional broadcasters in Europe, Mediaset is also struggling to expand its digital and on-demand offerings in an effort to compete with the growing power of Netflix and Amazon. Increasingly, national networks are forming alliances, or hooking up via acquisitions or streaming partnerships, with broadcasters in other European countries. Earlier this week, Vivendi subsidiary CanalPlus agreed to pay $1.12 billion (1 billion euros) for pay-TV operator M7, which operates services reaching 3 million subscribers across the Benelux region and in central Europe.
Mediaset has, for several months now, been touting the idea of creating a pan-European TV player with the size and financial might to take on the global streaming giants.
“The friendly acquisition of a stake in ProSiebenSat.1 is a long-term choice, aimed at creating value with an increasingly international outlook,” said Mediaset CEO Pier Silvio Berlusconi in a statement, adding that European media companies need to join forces “if we are to continue to compete, or even just resist, in terms of our European cultural identity, eventual attacks by the global giants.”
As recently as last month, ProSiebenSat.1 CEO Max Conze had dismissed the idea of a cross-border merger with Mediaset, saying he didn't see “the industrial logic” of such a move. Conze has instead focused on trying to shift ProSieben's business model away from traditional advertising-supported free TV and toward online and streaming services. He has set a target of generating half of ProSieben’s sales from digital activities within about five years.
But Mediaset has worked alongside ProSiebenSat.1 in the European Media Alliance, an association of regional commercial broadcasters, over the past five years. Mediaset has also tightened cooperation with Italian partners in recent years, striking content and distribution partnerships with Italy’s dominant phone company Telecom Italia and Sky Italia, the Italian division of Comcast-controlled European pay-TV group Sky.
Last year ProSieben signed a similar content-sharing deal with Sky Italia, followed by an agreement with Telecom Italia to give the operator’s customers access to ProSiebenSat.1's free-to-air channels.