Vivendi Absorbs Rival into Lossmaking Italian Pay-TV Venture

24 April 2001

As predicted last week [WAMN: 17-Apr-01], Vivendi-owned Telepiu, a lossmaking Italian pay-TV station, is to merge with national rival Stream, a co-venture between Rupert Murdoch’s News Corporation and Telecom Italia.

Chief executive of Paris-headquartered Vivendi, Jean-Marie Messier, yesterday confirmed the deal: “We have concluded a merger agreement for Telepiu with Stream on the basis of subscriber numbers,” he told a French newspaper.

The merger forms part of a restructure of the French media group’s Canal Plus TV assets, and the combined entity will retain the Telepiu brand. Canal Plus will hold a controlling two-thirds of the merged company’s stock, while NewsCorp retains one third. The latter also has an option to increase its holding at market prices to 50% within eighteen months or three years.

While both pay-TV companies’ losses are petty cash to their well-heeled owners, others might find them eye-watering. Telepiu last year shed around E220m ($197m) with break-even unlikely for several years; Stream lost an estimated E400m in the same period. Telepiu claims around 2.6m subscribers and Stream marginally over half that number.

News source: Financial Times