Mediaset says reforms will cost $1 billion

Confalonieri protests against government media policy

By BERNHARD WARNER

ROME — Silvio Berlusconi's Mediaset could be hit with as much as Euros 800 million ($1.05 billion) in lost business if the government succeeds in pushing through sweeping new media reforms, company president Fedele Confalonieri told parliament on Tuesday.

The Romano Prodi led government has vowed to open Italy's air waves to new competitors. The market is among the least competitive in Europe with Mediaset and state pubcaster RAI controlling 85% of the terrestrial TV advertising market. Mediaset, alone, controls 57% of the TV ad pie.

In October, communications minister Paolo Gentiloni proposed installing a cap on TV advertising where no company could account for more than 45% of the entire market.

Gentiloni also called for Mediaset and RAI to each transfer one terrestrial TV channel to the digital spectrum to make room for newcomers, triggering protest from Mediaset officials.

Confalonieri, who recently dismissed the Gentiloni bill as a "political vendetta," was more calculating in his criticism on Tuesday.

He said the advertising cap alone could cost Italy's largest broadcaster $789 million in revenues while the forfeiture of a terrestrial channel, most likely Rete4, to digital would cost another $460 million to $526 million.

Confalonieri conceded that some of the anticipated damages would be redundant and therefore concluded the total hit on Mediaset's bottom line at between $920 million and $1.05 billion if the media bill passes.

Parliament will continue to hear arguments from both sides before the controversial law goes up for a vote later this year.