Mediaset Second-Quarter Sales Decline on Sluggish Economy

Updated on

Mediaset SpA, Italy’s largest commercial TV broadcaster, said second-quarter revenue fell 1.3 percent as advertising sales continued to slump amid a sluggish economy.

Sales were 892.3 million euros ($974 million), former Prime Minister Silvio Berlusconi’s media company said in a statement Thursday. Analysts had predicted 896 million euros on average, according to data compiled by Bloomberg.

Italian television ad sales declined 3 percent in Italy to 1.93 billion euros in the first six months, compared with 1.99 billion euros a year earlier, according to market research firm Nielsen. While the July and August ad sales trend looks positive, it remains “extremely difficult” to make forecasts for the full year, the company said.

“We see low single-digit TV ad growth for July and August,” Matteo Cardani, deputy head of marketing for Mediaset’s advertising unit Publitalia ’80, said in a conference call with analysts.

Mediaset is cutting costs while boosting spending on programs to lure customers to its pay-TV offering. The broadcaster this week bought three-year Italian TV rights for the Super Bowl and is studying non-exclusive deals with phone carriers to put more of its programs on mobile devices.

Mediaset is “very close” to reaching a commercial agreement with Telecom Italia, Chief Financial Officer Marco Giordani said. The two companies have been discussing a deal that would allow Telecom Italia customers to watch Mediaset Premium content using the carrier’s ultra-broadband services.

Second-quarter net income was 23.6 million euros, compared with an 8.1 million-euro loss a year earlier.

The Milan-based company is exploring an agreement with Vivendi SA for distribution of premium content, though an accord isn’t imminent, Mediaset Chief Executive Officer Pier Silvio Berlusconi said in June.

Mediaset’s board also approved the purchase of 80 percent of radio network Monradio Srl from publisher Arnoldo Mondadori Editore SpA. The transaction will be concluded by Sept. 20.