Mediaset to spin-off premium pay arm

Mediaset is to spin off its premium pay TV arm into a new company on December 1, following its sale of a stake in the venture to Telefónica.

Telefónica is expected to close its acquisition of an 11.11% stake in the venture before the end of this month, leaving the remaining 88.89% in the hands of Mediaset holding company RTI.

Telefónica agreed earlier this year to acquire a stake in the pay TV venture, Mediaset Premium, investing about €100 million (US$124.6 million) in the unit as part of a wider deal that saw Mediaset sell its 22% stake in Canal+ Spain to the telco, taking Telefónica’s stake in the Spanish pay TV venture to 44%.

Mediaset’s plan has been to attract further investors for the pay TV unit – notably Vivendi and Al Jazeera – but the high valuation placed on the company by the Telefónica deal – about €900 million – has reportedly led to a slowing down of talks with both companies.

Mediaset said that the new company, Mediaset Premium Spa, would invest in the production and distribution of Mediaset content on pay TV, as well as to continue to invest in sports rights.

After a period of uncertainty when it faced the potential prospect of losing all rights to the country’s Serie A football league to rival pay TV operator Sky Italia – now part of the pan-European Sky platform – Mediaset secured rights to air the matches of eight leading teams in July.

Mediaset Premium will be led by former Mediaset pay TV chief Franco Ricci as managing director. Yves Confalonieri will serve as director of content, with Marco Rosini serving as commercial director, Eugenio Pettazzi as technology director and Domenico Alessio as head of information.