Shares in embattled Italian prime minister Silvio Berlusconi’s Mediaset media empire (which spans pay and terrestrial TV, newspapers and magazines) were suspended for a period yesterday as investors headed for the exit.
The shares have lost 20 per cent of their value in the last five days and fell 12 per cent on Wednesday. Even by the standards of current events in Italy, which looks almost certain to be the next Eurozone country to require a bail-out by its EU partners, this is pretty disastrous.
It has always been clear that Berlusconi’s business fortunes are closely allied with his political role and, now that he has promised to resign as prime minister following the Italian Parliament’s hoped-for approval of a new round of austerity measures, some collateral damaged was inevitable.
But Mediaset recently produced a set of disappointing financial results, forecasting a three per cent decline in revenues and sharply higher net debt at €1.8bn. It also issued a profit warning at its pay-TV business which is under mounting pressure from that other ageing controversialist Rupert Murdoch and his Sky Italia which now has five million subscribers.
Berlusconi faces a number of impending trials in Italy, some concerned with his notorious ‘bunga bunga’ sex parties allegedly involving prostitutes and minors, others focussing on his business interests including alleged bribes paid when his private holding company Fininvest bought magazine publisher Mondadori way back in 1991.
In the past Berlusconi, as prime minister, has been able to evade his pursuers by changing the law if he needed to. As an ex-PM he will have no such ability.