Frankfurt According to CFO Marco Giordani, the Italian media holding Media For Europe (MFE) is not currently planning a takeover bid for the German television group Pro Sieben Sat 1. “We currently have no such plans,” Giordani explained in an interview with the Handelsblatt. However, he did not want to rule out such a step. “You will see what is in a year,” said the manager.
MFE reported last week that it held more than 25 percent of the shares in Pro Sieben. The group, which includes the Italian Mediaset, is controlled by the family of former Prime Minister Silvio Berlusconi via their Fininvest holding.
“The media in Europe are under pressure,” said Giordani. “The media attracts attention and monetizes it by selling advertising. This advertising pie has remained about the same size in Europe over the past ten years.” But Google, Facebook and Co. have won almost a third of it.
In the long term, European media groups could only survive if they pooled their resources to invest in technology and content. “There are two schools of thought: national consolidation and international.”
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With the sale of its French station M6 to TF1, Bertelsmann opted for the first variant and repeatedly indicated that a merger of the subsidiary RTL with Pro Sieben would be conceivable. Proponents of this strategy argue that content and advertising are each tailored to a country-specific audience and international mergers therefore make little sense.
The group now holds more than 25 percent of Pro Sieben Sat 1.
(Photo: MFE)
But the approach does not go far enough, since savings are inevitably made on content, says Giordani. MFE, on the other hand, relies on transnational alliances. “Our model allows for revenue growth and investment in content,” Giordani said. They are necessary to survive against the tech companies.
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MFE’s business games for a European TV platform date back to 2019, but progress has been slow so far. This was also due to the dispute with MFE co-owner Vivendi, which has since been settled. The Italians joined Pro Sieben in 2019 and then gradually increased their share.
MFE sees itself as a long-term investor in Pro Sieben. “We are not activists. We’re not playing against anyone,” said Giordani. The management must now present a plan on how to meet the current challenges. Giordani explained that if Pro Sieben finds its own way of raising the value of the company, MFE may even take it on for itself. “However, operational solo efforts are rarely seen as creating value during this time.”
A negative example would have been provided by the Italian MFE subsidiary Mediaset and Mediaset Espana, which had purchased two different streaming technologies and thus wasted money. From the point of view of Mediaset and the alliance created by the Italians with 13 participating television stations, there could have been many cooperations between stations long ago. That had never worked before due to vanity.
While some media companies – such as Pro Sieben and Axel Springer – have created a new mainstay with tech investments, MFE focuses on the classic TV business. “It’s not easy for us to understand how to create long-term value in a conglomerate consisting of television, e-commerce and dating portals,” said Giordani.
Some of Pro Sieben already has exit plans: Originally, the dating subsidiary Parship-Meet was supposed to go public in the second quarter. In view of the high volatility on the stock markets, the project is on hold. Pro Sieben has invested in a number of start-ups, with the group receiving shares in many cases in exchange for advertising time. Pro Sieben holds the best-known holdings such as Verivox or Flaconi through a joint venture with financial investor General Atlantic. Separation plans are not known here.
Possible counter-candidate for the supervisory board
The different strategic perspectives have hardly been discussed so far. “The relationship between MFE and Pro Sieben has been rather formal so far,” said Giordani. When ex-Springer CEO Andreas Wiele was nominated as the new chairman of the supervisory board and Rainer Beaujean was promoted to CEO in December, MFE received no advance notice.
“All relationships have potential for improvement,” said Giordani. So far, MFE has not been represented on the Pro Sieben board of directors. Two seats are to be reassigned at the Annual General Meeting in May. Former RTL boss Bert Habets is planned for one, and Rolf Nonnenmacher, who has been on the committee since 2015, is to be re-elected for the other.
From MFE’s point of view, an alternative is conceivable. “It may be possible to find a candidate that we fully support,” said Giordani. Otherwise, you can set up opposing candidates. “In any case, these would not be representatives from the company MFE, but independent directors with the right qualifications.”
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