It’s déjà vu all over again as Vivendi suffers another Italian defeat

Italian Media company Mediaset wants to merge its Italian and Spanish businesses, something that significant shareholder Vivendi opposes.

The combined company would be called MediaFor Europe and a Mediaset EGM recently voted to go ahead with the merger plan. French conglomerate Vivendi owns around 30% of Mediaset, but two thirds of its stake is held in a trust by a company called Simon Fiduciaria, following a ruling by the Italian telecoms regulator that owning big chunks of both Mediaset and operator group TIM violates media plurality laws.

Subsequently it seems to have been decided that Simon Fiduciaria doesn’t get a vote in Mediaset general meetings, thus greatly diminishing Vivendi’s voice at such events. Vivendi reckons that’s the only reason the Berlusconi family, which owns almost half of Mediaset via its investment vehicle Finnivest, won the recent vote and it’s not happy about it.

Vivendi deplores today’s irregular approval by the Mediaset Extraordinary Shareholders Meeting of the new merger plan regarding MediaForEurope,” said a Vivendi press release. “The new plan has only gained approval because of the unlawful refusal to allow Simon Fiduciaria (which holds 19.9% of Mediaset share capital) to vote, relying on an interpretation of the Italian media law which is contrary to the EU Treaty.

“In addition, the new plan was adopted ignoring Italian law procedures regarding trans-border mergers, including the withdrawal rights for shareholders, and has merely removed some blatantly abusive clauses, without modifying the disproportionate rights granted to Fininvest.

“All recent judicial decisions and opinions, in particular from the Advocate General of the Court of Justice of the European Union in December, have not discouraged Fininvest’s representatives in the Mediaset Board from depriving minority shareholders of their most basic rights. The Mediaset Board has once again placed the company in a situation of serious legal uncertainty.”

All this huffing and puffing from a massive conglomerate that routinely tries to hijack the running of large companies without going to the trouble of buying them is a bit rich. Last year Vivendi’s protracted attempt to do so at TIM failed and history seems to be repeating itself, with Mediaset regarding Vivendi’s interests in the company as hostile. Vivendi’s principle objection to this merger seems to be a dilution of its shareholding in the combined entity, rather than anything to do with the strategy and health of the company as a whole.

TIM-Mediaset tie up shows telcos are getting realistic about content

Telecom Italia and Mediaset have announced a strategic agreement that will allow TIMVision customers to watch all Mediaset free-to-air channels, as the telco moves towards the content aggregator role.

The convergence dream is one all telcos are chasing, though few have been able to find the magic formula for the mystic quad-play. This partnership between TIM and Mediaset perhaps shows how the telcos can add value to the content world, as opposed to trying to disrupt it, acting as the link between established players and customers.

As part of the deal, TIMVision customers will be able to access various Mediaset channels including Canale5, Italia1 and Retequattro, and will also be able to access programming from the previous seven days. Customers will be able to access the content from January 2019, as TIM drives the DigiTIM strategy forward, building a content offering which can compete with the traditional players. The difference here is that TIM is attempting to compete on grounds which are more logical.

This is shift in the industry which we have been expecting for a while, as numerous telco and technology firms attempted (unsuccessfully) to diversify revenues by creating content. Orange has been trying it without any massive success, while AT&T is battling the US government to fuel its own ambitions. We question whether attempting to infiltrate the content creator camp is the most logical step forward. Firstly, it is an established industry, and secondly, the way the business operates is completely different on a risk, operational and cultural basis.

TIM is taking the more logical route. It has customers, it has a platform, therefore why not populate that platform with other companies work. These companies are constantly looking for new ways to reach audiences, therefore a consolidated platform with 1.5 million subscribers, which acts as a content aggregator is an attractive proposition. It also plays to the advantages of the telcos; it is a functional business.

The telcos are not creative organizations. EE’s Kevin Bacon/Britney Spears/Ryan Reynolds adverts show there is little to be excited about the creative prospects of these organizations, but an aggregator platform does not require them to be imaginative or implement a bullish-risk approach. It allows them to do what they do best; deliver a functional and efficient service.

Diversification and convergence doesn’t have to be complicated or glamourous, all it has to be is realistic and valuable. This is a perfect example of how a telco can collaborate with an existing ecosystem and add value, without undertaking an unnecessary risk and disruptive strategies.