Mediaset hits out at valuation of pay TV unit

Italy’s Mediaset has criticised banks for undervaluing its Premium pay TV service amidst moves to strike a pay TV alliance with international partners.

Mediaset said that any assessment of the profits or losses made by the Premium unit were entirely speculative, as it did not break down the income of the unit in its results, although it also said that in the absence of Premium, Mediaset would have achieved a better result in its consolidated financial statement for last year.

Mediaset’s statement followed a of the Premium business by Mediobanca Securies. Mediobanca estimated the value of the unit at €300 million.

The bank said that forging an alliance wth partners could be complicated by the ownership structure of Spain’s Digital+, in which Mediaset has a 22% stake. It also said that there would likely be an expensive battle for rights to Italy’s Serie A football between Premium and Sky Italia.

The broadcaster said that banks had made “dated and divergent assumptions” without having access to the real numbers and that any valuation of the Premium business had to take into account the strategic value of the asset and its leadership in innovative services including streaming and video-on-demand.

It has been widely reported that Mediaset is attempting to forge a pay TV alliance covering its Italian and Spanish activities with Al Jazeera and Canal+. Financial daily Il Sole 24 Ore last week reported that Mediaset had already signed a Memorandum of Understanding with Al Jazeera, a report that was denied by the broadcaster.