Friday, July 18, 2003


There have been times over the last few years when it has been difficult to sell stories on conflict of interest. “No doubt terribly important in abstract terms,” sighs the editor. “But what does it matter in real terms to our readers?” Then he challenges, “Give me examples of how Mr. Berlusconi has profited or other people lost because of his position. Then let’s talk.”

These last two years have seen a few plums but now we are in the middle of a major harvest.

For starters, a month and a half ago, the government’s tax amnesty law (condono) put €162 million into Mediaset hands, mostly directly to the Berlusconi family. While they were not the only ones to benefit, last year Silvio Berlusconi himself had said that he would not even apply for the amnesty.

A month ago, the Prime Minister was given immunity from prosecution. The bill was rushed through Parliament so that he would not lose face by possibly being given a guilty verdict while sitting as European Union President. In theory, of course, there are four other beneficiaries of the law even if none are on trial at the moment.

The third, latest and biggest conflict of interest is directly beneficial to the Prime Minister.

The Gasparri Bill is being fought over in the Senate at the moment and, unless it undergoes major re-working when it returns to the Chamber, it will in practice protect the Prime Minister’s broadcasting empire from regulation and allow him to expand into other fields. The danger is primarily for freedom of information and secondly in the consolidation of Italy’s broadcasting cartel to the detriment of other players in broadcasting and print.

Minister of Communications, Alleanza Nazionale’s Maurizio Gasparri maintains that his bill will liberalise and regulate broadcasting and act as an anti-trust barrier in the field. Since about 1990, Italian media have been in increasing need of overall regulation, undergoing stopgap and sometimes contradictory legislation and Constitutional Court sentences. Despite its promise, the Gasparri bill does not fulfill its declared aims.

In practice, the areas where Mr. Berlusconi’s Mediaset is acting illegally or at least irregularly will become explicitly legal and the present anti-trust limits that prevent the extension of Mediaset will be expanded so that the Prime Minister’s company will have an even greater share of the market. As added extras, the bill also damages the print media and puts the public broadcaster (RAI) even more under government control.

No wonder there is a major demonstration planned for Tuesday 22 July in piazza Navona outside the Senate. It is the day of the final vote but also the anniversary of President Ciampi’s speech appealing for pluralism in the media.

Mediaset’s most immediate problem is how to keep its Rete4 on the ground. In 1994 the Constitutional Court declared that no single company could own more than two terrestrial channels. Last year they reiterated the decision that Rete4 should move onto satellite (90% of Italian television is analogue terrestrial so changing would mean losing most of the audience). Apart from being the home of the fawning Emilio Fede (who spends most of the news adoring Berlusconi, Mediaset’s precursor of Comical Ali), Rete4 has an audience share of over a million and is a good earner.

The bill would allow Rete4 to stay terrestrial.

The other main regulator, the 1997 Broadcasting Law (usually called the Maccanico after the then minister) caps the market share of publicity to 30%. By almost any calculation Mediaset is above that limit but each year has appealed and discussed the findings so has never had to sell any of its assets. The new bill reduces the share to 20% but vastly increases the definition of the “market.” Today, the “market” is made up of publicity, license fees and subscriptions to pay-TV. Tomorrow, when the law passes, it will include almost all media: print, books, cinema, public relations and promotional material as well. In practice, it will be a universe impossible to calculate. Nonetheless, the Mediaset CEO Fedele Confalonieri has reckoned that it is around €25-27 bn. and Mediaset’s turnover between €3.5 and €4 bn., meaning that, instead of slimming the company down, the new law will allow Mediaset to expand by another €1.5bn.

One and a half billion euros means they could take on the Sky publicity concession, they could buy an existing newspaper or found their own and, in addition, they could buy up any number or smaller local papers.

Mediaset could do this also thanks to the end of cross-ownership prohibition. At the moment a broadcaster cannot own a newspaper and vice versa. The new bill allows cross-ownership, in theory a liberalising measure. In practice, as Giovanni Sartori pointed out “big fish eat little ones, not the other way around” (Corriere della Sera 16/7). There are no newspapers big enough to go into the broadcasting business, but Mediaset can easily move into print.

These are the big battle lines, but on the edge of the conflict there is the dominance of television over print in Italy for publicity, above all, but also for audience and information. The new bill will consolidate RAI’s position even though it will be partially privatised. Salvatore Bragantini argues that it just strengthens the RAI-Mediaset duopoly (Corriere della Sera 9/7). Not surprisingly it has been Mediaset’s press office that has been busy at damage control over the last few days - they are very conscious that the bill is to their almost exclusive advantage, but do not want it to be presented as such.

Obviously the centre-left criticises the Gasparri bill, the Margherita’s Paolo Gentiloni states, “1990 to 2003 has been the story of an endless chase for a solution to the problem; now a highly concentrated market is being accepted.”

But others too are worried.

Enzo Cheli, President of the Communications Authority, said in his annual report last week that “pluralism in television was unsatisfactory”. He maintained that present legislation is ambiguous and that there is a need for “clear laws that respect the Constitution”. And the President of Italian Publishers’ Association, Luca Cordero di Montezemolo said, “This is a law that goes against the pluralism called for by the President and Speakers of the Parliament”.

It is another move towards the concentration of power and wealth in Italy and there are no prizes for guessing to whose advantage.

Contact James Walston at

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