THE DIFFICULTIES, both at home and abroad, facing Italian prime minister Silvio Berlusconi are hardly novel but figures released last weekend suggest that, for perhaps the first time, uncertainty about the 75-year-old media tycoon’s political future may be hitting him where it hurts – namely in his own business interests.
Two of the heaviest losers on the Italian stock exchange in recent months have been the key Berlusconi companies, TV holding company Mediaset and publishing house, Mondadori. On successive days last week, Mediaset dropped 6.98 per cent and 5 per cent with the share price closing at €2.18. At their strongest, in the years 2005 and 2006, the Mediaset shares were worth between nine and €10.
Obviously, in these times of global economic crisis, all shares are falling, some faster than others. Yet while the all-share loss on the Milan bourse over the last year has been 34 per cent, Mediaset in the same period has lost just under 60 per cent. Put another way, Mr Berlusconi’s own 40 per cent holding in Mediaset, valued at €2.1 billion on the December day last year when he narrowly won an all-important confidence vote, is now worth €995 million. Nor has publishing house Mondadori performed much better, losing just over 40 per cent in the same period.
While Mr Berlusconi does not risk having his phone cut off just yet, things have been less rosy for those who have invested in his companies. A €10,000 investment in Mediaset in September of last year is now worth about €4,000.
Analysts argue that the Mediaset losses cannot be attributed to global market considerations alone. They point out that investors have also been less than convinced by the company’s industrial plan, in particular in relation to its digital Pay TV service, which mainly sells Italian football.
However, analysts argue that the biggest negative factor linked to both Mediaset and Mondadori is Mr Berlusconi himself pointing out that, if and when he is forced out of office, then his companies will suffer, in that they will no longer be able to call on government “dig-outs”.
In this context, the Demoratic Party (PD) senator, Giuliano Barbolini, last week in parliament claimed that a provision in the 2010 budget had been tailor made for Mondadori, enabling the company to settle a €173 million debt to the inland revenue services with the payment of an €8.6 million fine.