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Berlusconi Group

Overview

This profile considers the media holdings of Silvio Berlusconi, Italian politician, and his family.


It covers -

  • introduction
  • the group
  • structure
  • the man
  • studies

Introduction

Ownership of Italy's mass media is even more concentrated than that of Canada and Australia.

Companies controlled by the family of Italian Prime Minister Silvio Berlusconi dominate Italian commercial television (with a 45% audience share and over 60% of total advertising sales), have a major presence in advertising and publishing, and have been moving into telecommunications, despite recurrent allegations of of impropriety.

Alexander Stille's 2006 The Sack of Rome offered an analogy for US readers -

Imagine that Silvio Berlusconi were Bill Gates. Aside from being the richest man in the United States, Gates would own or control all but one of our TV networks, along with Time Warner, HBO, Aetna, Fidelity, The Los Angeles Times, and the New York Yankees. And he would have been our president and commanded a majority in Congress, until barely losing an election

The group

The family has beneficial ownership of around 96% of the Fininvest holding company. Fininvest has a 34% controlling stake (down from 50.7% in 2005) in Mediaset, the terrestrial television group that competes with state-owned RAI and operates three networks: Canale 5, Italia 1 and Retequattro.

Dominance of the airwaves is of particular interest given low newspaper readership figures: Pippa Norris' insightful A Virtuous Circle: Political Communications in Post-Industrial Democracies (Cambridge: Cambridge Uni Press 2000) for example notes suggestions that 82% of Italians depend only on television for news, the highest percentage in the EU.

Fininvest also has a controlling stake in Mondadori, Italy’s largest book and magazine publishing group (with 30% and 38% of the domestic market respectively). Mondadori's magazine arm encompasses over 50 titles. In June 2006 Mondadori announced that it wouldpay €550 million for Emap France, the ailing French magazine arm (including Le Film Francais and the Tele Star and Tele Poche television guides) of UK-based EMAP.

Fininvest controls Il Giornale, a leading national newspaper that competes with L'Espresso's La Repubblica and with La Stampa and Corriere della Sera of the RCS group. It has a 36% stake in financial-services group Mediolanum. Other holdings include property, multimedia, printing and telephone directories.

Cross-holdings, nominee companies and other devices inhibit a clear picture of the group. There have been recurrent moves to force Berlusconi to divest some of his media assets - and he has made undertakings to that effect - but there is apparently little action. Indeed, at the end of 2001 he moved to acquire additional print and radio operations from the Il Sole 24 Ore group.

On 19 January 2002 the Economist commented that

Mr Berlusconi has yet to remove the ubiquitous conflicts between his private and public concerns. Because his companies are embroiled in almost every part of the economy, his failure to do so casts doubts on the motives behind so many of his projects, whatever their merits.

In December 2004 an Italian court found that a charge of paying a US$430,000 bribe to a judge was proved; Berlusconi escaped conviction because more than the statutory limit of seven and a half years had elapsed since the charges were filed.

Structure and evolution

An indication of the Berlusconi family's holdings is here.

A chronology of the group is here.

The man

Silvio Berlusconi was born in 1936, apparently in comfortable circumstances. Friends and foes have been quick to mythologise his career - he supposedly charged entrance fees for puppet shows at primary school, was a ghost-writer for high school essays and of course sold vacuum cleaners to pay for his law degree at the University of Milan. His thesis was on The Newspaper Advertising Contract.

Belusconi moved in the right circles at university (future prime minister Bettino Craxi was a friend) and made a small fortune from 1962 onwards using a property and construction company named Edilnord, notably through residential development such as Milano 2 in 1969. That generated allegations that he'd benefited from favourable rulings by local politicians and had ties to the shadowy Propaganda 2 (P2) group.

In 1974 he founded cable television station Telemilano to service Milano 2 and in 1978 worked his way around rules that gave RAI the national broadcast monopoly: his local stations simultaneously broadcast the same programs. Fininvest was founded in 1975 as a holding company. He established Canale 5 (Channel 5) in 1980, a big hit with a schedule of local game shows and US treats such as Dallas.

At the same time he established the Publitalia 80 advertising agency, one of the largest in Europe by the mid-1980's, and acquired the other two major commercial television stations - Retequattro (1984) and Italia Uno (1983).

Fininvest moved into newspaper and magazine publishing (eg the weekly Panorama), books (the venerable Mondadori group in 1985), retailing, direct marketing, online services, cinemas (1985) and sport (the AC Milan soccer team).

That expansion reflected past moves by other families (for example the Agnellis) but was more rapid and generated a new epithet - 'Berlusconism' - to describe a way of life in which people lived in houses built by Berlusoni, watched television controlled by Berlusconi, shopped at supermarkets owned by Berlusconi, ate in restaurants built by Berlusconi, and relaxed on Belusconi tennis courts or watching his soccer team. Investment outside Italy - eg in Spain, in France (with Seydoux and Hersant) and Germany (with Kirch) - was less successful.

In 1984 prime minister Craxi's 'Berlusconi Decree' overturned a court order banning Berlusconi from broadcasting. That support was reflected in the 1990 Legge Mammi that implicitly created a Berlusconi/RAI duopoly.

Apparently underwhelmed by Australian-style attempts to limit ownership to either broadcast or print, Berlusconi appointed his brother as editor of Il Giornale and shrugged off litigation during the Tagentopoli ("Bribesville") investigations of 1992-94.

Proceedings relating to alleged tax fraud, accounting peculiarities and bribery of police and judges continued. In April 2001 the Economist alleged that he'd paid 23 billion lire into Craxi’s offshore bank accounts.

As of 31 July 2003 the Economist - claiming that he had "tried to put himself beyond the reach of the law" - was pressing Berlusconi for answers; the media czar (and then president of the European Union's Council of Ministers) was continuing defamation action against the UK publication over the 2001 article. Readers of this site should conduct appropriate research before making their own judgements about circumstances, claims and counter-claims.

In 1993 Berlusconi formed the populist Forza Italia party on the theme of "good government" and the "politics of efficiency". Forza Italia became the largest bloc in the national parliament at the March 1994 elections, with Belusconi as PM in coalition with the neo-fascist Alleanza Nazionale (AN) and the Northern League. Insights are offered by Jonathan Hopkin's 2004 New Parties in Government in Italy: Comparing Lega Nord and Forza Italia (PDF). Berlusconi resigned in December 1994.

In July 1995 he sold a 20% stake in Mediaset to German Kirchmedia and others for US$1.1 billion, subsequently taking his stake to under 50% through a public flotation and selling a further 16.7% for €2 billion in April 2005.

He again became PM in the 2001 election (Alexander Stille's NYRB comment is here) and subsequently extended his broadcast holdings. He was defeated in the 2006 election.

Studies

Prior to 2004, which saw publication of Paul Ginsborg's perceptive Silvio Berlusconi: Television, Power & Patrimony (London: Verso 2004) and David Lane's Berlusconi's Shadow: Crime, Justice and the Pursuit of Power (London: Allen Lane 2004), there was no major English-language study of Berlusconi or Fininvest. They have been supplemented by Alexander Stille's The Sack of Rome: How a Beautiful European Country With a Fabled History and a Storied Culture Was Taken Over by a Man Named Silvio Berlusconi (New York: Penguin 2006).

Marco Travaglio's L'odore dei soldi (Rome: Editori Riuniti 2001), reviewed here, endorses the Economist's claim that the empire's smell is not very sweet. Other Italian treatments include Paolo Labini's Berlusconi e gli anticorpi: Diario di un cittadino indignato (Bari: Laterza 2003), Giorio Bocca's Piccolo Cesare (Milan: Feltrinelli 2002), Giuseppe Fiori's Il venditore: Storia di silvio berlusconi e della fininvest (Milan: Garzanti 1996), Franco Cordero's Le strane regole del Signor B (Milan: Garzanti 2003) and Giovani Sartori's Mala tempora (Bari: Laterza 2004).

Giovanni Bechelloni's 'The Journalist as Political Client in Italy' in Newspapers & Democracy (Cambridge: MIT Press 1980) edited by Anthony Smith and Political Clientalism & the Media: Southern Europe & Latin America in Comparative Perspective (PDF) by Daniel Hallin & Stylianos Papathanassopoulos offer a perspective. That is consistent with Gianpietro's 'Media Moguls in Italy' in Media Moguls (London: Routledge 1991) edited by Jeremy Tunstall and Ginsborg's Italy and Its Discontents: Family, Civil Society, State 1980-2000 (London: Allen Lane 2001).