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The Man Who Would Be Media Kingpin Of Europe


International Business

THE MAN WHO WOULD BE MEDIA KINGPIN OF EUROPE

The already bright prospects of Democrats holding at least their 57-43 Senate margin in November are getting even brighter. One of the few dark clouds disappeared when Brock Adams (D-Wash.) abandoned his bid for a second term. State Democrats, who had all but written Adams off, now hope that popular outgoing Governor Booth Gardner will enter the race and save the seat.

Meanwhile, four Southern Democrats who seemed endangered after President Bush's gulf war triumph now look safe. The reason: The GOP just couldn't recruit strong challengers to take on Terry Sanford (N. C.), Ernest F. Hollings (S. C.), Wyche Fowler Jr. (Ga.), or Richard C. Shelby (Ala.).

The GOP could easily lose open seats to strong Democratic contenders in solidly Republican Utah and Idaho. And GOP incumbents face spirited challenges, with Oregon's Bob Packwood perhaps the weakest of the lot.

The Democrats have their vulnerabilities, too. Colorado's Timothy E. Wirth has a tough race against Republican Terry Considine. And Alan J. Dixon (Ill.) is under siege in a Mar. 17 primary. But chances are that when the votes are counted, the Democrats will hold, and perhaps expand, their dominance of the Senate.

Europe is about to become the world's largest unified market--except when it comes to television. Media moguls such as Rupert Murdoch have tried--and failed--to come up with a European equivalent of an American TV network able to operate on a Continental scale.

Enter Milan's Silvio Berlusconi. Through his $10 billion Fininvest Group, Berlusconi is already a key player in commercial TV in Italy, Spain, and Germany. Now, he's tuning in to France and Britain. On Feb. 25, his $330 million plan to rescue France's ailing La Cinq TV network was approved by its shareholders. In Britain, Berlusconi is emerging as the prime candidate to take over Channel 5, the new national TV network due to start up in 1994. If he succeeds in his bids and turns the stations into moneymakers, Berlusconi could reign as Europe's media kingpin.

Berlusconi's strategy could not be less like Murdoch's Sky Channel, which attempted to blanket a broad swath of Europe with identical programming. After his European plan proved to be a costly failure, Murdoch scaled it down to focus only on Britain.

ENTICING DEALS. By contrast, Berlusconi's game plan is to treat Europe as a collection of national markets and pick them off one by one. While starting up stations in Spain, France, and Italy has cost him millions, he has recouped by selling his own programming to the new networks. Since his group also includes Europe's largest broker of advertising space--Publitalia '80--he can offer enticing, multicountry ad deals.

Berlusconi's greatest strength is his stock of around 100,000 hours of TV programming, by far the largest in Europe. He holds European rights to such U.S. series as Dynasty, Dallas, and Twin Peaks as well as thousands of feature films, including Terminator 2. And just as the European Community is pressuring member states to cut down on purchases of U.S. programming, Berlusconi has started his own large-scale productions in Europe. Tricom, a production company jointly owned by Berlusconi, Germany's Leo Kirch Group, and France's TF1 recently turned out the Emmy-winning miniseries Phantom of the Opera, with Burt Lancaster.

Then there's Berlusconi the man. As owner of Italy's top-ranked soccer team, Milan A.C., he has a kind of cult status among the country's youth. In a national poll of teenagers in early March, the down-home Berlusconi ranked as the single most popular figure, surpassing both Jesus Christ and Italy's President.

CINQ AND SWIM? Still, he has his work cut out for him. As he shuttles back and forth between Milan and Paris on his Gulfstream IV, he now faces the hurdle of getting French government approval for his plan to bail out La Cinq, of which he already owns 25%. Faced with sluggish growth in a crowded TV market, La Cinq went bust on Dec. 31 and is broadcasting under a court-appointed administrator. Rival TV networks are lobbying hard to quash Berlusconi's rescue effort, worried that the lower costs resulting from Fininvest's in-house production and vast TV library would kill competition. The government requires at least 40% of TV programming to be produced in France, another sticking point. "If Berlusconi just plans to broadcast American programs, he won't get our sympathy," says an official of the French government's TV watchdog agency.

Berlusconi may have an easier time in Britain. If he emerges next September as the winning bidder for the new Channel 5, he will be the first foreigner to control a British network. But the new channel also faces tough competition. It will be up against two commercial channels, two national government stations, and a burgeoning satellite and cable industry. "If we can succeed in Britain and France," says Fedele Confalonieri, Fininvest's general manager, "this will be a real turning point for us."

Since its first tentative cable-TV broadcasts in a Milan suburb in 1978, Berlusconi's media empire has grown amazingly fast. In Italy, Fininvest has three national TV channels, control over the country's largest chain of cinemas, and the biggest book and magazine publisher (table). Together, they scooped up more than a third of the $7.5 billion spent on Italian television and print advertising last year. In 1991, Fininvest companies churned out more TV programming than any European group.

In Spain, Fininvest is the power behind Telecinco, the country's newest commercial TV network. In less than a year and a half, it has sailed past the stodgy government-owned networks to become the country's No. 1 channel. In the booming German market, Berlusconi has a 21% stake in Telefunf, a broadcasting joint venture with the Axel Springer publishing group.

Adding Britain and France to the mix would give Berlusconi a much bigger audience for the Hollywood productions he now has in the works. Pentafilm, a production unit set up in Hollywood in 1989, is churning out big-budget films such as the upcoming Man of Trouble, starring Jack Nicholson, and The House of Cards, with Kathleen Turner.

With a presence in Europe's top five TV markets, Berlusconi would also be able to offer attractive deals to big advertisers such as Unilever and Nestle. Already, his Publitalia advertising arm has cut multicountry deals with Gillette Co. and Adidas. "We welcome the arrival of Berlusconi, since he'll bring competition to Europe's media market," says Franck Moison, the Paris-based general manager of Colgate-Palmolive France's Household Div. Those are the kinds of words Berlusconi is banking on.EDITED BY STEPHEN H. WILDSTROM John Rossant in Rome, with Stewart Toy in Paris, and Richard A. Melcher in London


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