a student, Silvio Berlusconi, the son of a Milan bank official,
displayed two of the main qualities that marked his later career
as a media tycoon; business acumen and a penchant for performing.
While preparing a dissertation on "The Newspaper Advertising Contract",
for his honours degree in law from Milan University, he helped finance
his studies by working as a crooner on cruise ships.
he was quick to recognise the entrpreneurial opportunities opened
up by the wave of post-war affluence that rolled across Italy in
the 1960s. He moved into the booming contruction sector, and in
1969 borrowed 3 billion lire to build a prestigious dormitory suburb,
Milano 2, on the edge of the city. His decision to install a cable
network in the complex in 1974, was his first entry into a television
marketplace that was about to undergo a massive expansion.
monopoly over national broadcasting enjoyed by the public sector
organisation, RAI (Radio Televisione Italiana) had been confirmed
by Law 103, passed in 1975. But the following year, the Constitutional
Court ruled that it did not extend to the local level. This decision
legitimated the mushrooming "pirate" television operators and attracted
new investors with around 700 commercial stations springing up around
the country. Berlusconi was quick to see the enormous potential
in this explosion of activity and in 1975 he set up a holding company,
Fininvest, to manage his expanding interests. In 1979 he established
a major film library, renting titles to stations on the condition
that they carried advertising purchased through his Publitalia subsidiary.
He rapidly became the dominant force in a market that saw television
increase its share of national advertising from 15% in 1976 to nearly
50%, ten years later. By 1983, Publitalia's advertising revenues
had overtaken those of RAI and by the end of the decade they accounted
for around 70% of all television advertising expenditure.
His power within
the new commercial television marketplace was further cemented by
his own moves into station ownership. Between 1977 and 1980, he
created a nation-wide network, Canale 5, creating the illusion of
a single channel by dispatching video tapes by courier for simultaneous
transmission. Programming was unashamedly populist relying heavily
on imported films and soap operas and home produced game shows.
In 1981, the Constitutional Court revised its earlier decision and
ruled in favour of national private networks providing there were
strong anti-trust provisions. Berlusconi took full advantage of
this opening, buying out one of his main competitors, Italia 1,
in 1982, and acquiring his only other serious challenger, Rete 4,
in 1984. These moves confirmed his domination of commercial television
earning him the nickname Su' Emittenza ("His Transmitter-ship",
a pun on the traditional title for a Cardinal).
His power did
not go unopposed however. In October 1984 magistrates ruled that
his channels breached RAI's monopoly right to broadcast a simultaneous
national service, and shut them down. But he had powerful political
friends, including the Prime Minister, Bettino Craxi, who returned
from overseas early to sign a decree re-opening them. Even in a
climate of growing enthusiasm for deregulation no other European
government had allowed a single individual to accumulate such concentrated
control over terrestial television. This political support established
an effective duopoly in national television for the rest of the
decade, giving Fininvest's three commercial networks and RAI's three
public channels an overall share of between 40-45% each.
situation in 1988, the Constitutional Court sent a warning to parliament
urging them to introduce strong anti-trust provisions at the earliest
opportunity. Parliament's response, the Broadcasting Act of 1990
(known as the "Mammi Act" after the Post and Telecommunications
Minister who presented it) fell some way short of this. The parliamentary
debate was bitter with the former chair of the Constitutional Court
arguing that the Act disregarded the Court's anti-trust instructions
and was far too sympathetic to private television power. The new
law legitimated the status quo. Berlusconi was allowed to keep his
three broadcasting networks and Publitalia's domination of the television
advertising market remained untouched. However, new cross ownership
rules did require him to sell 90% of his shares in the country's
first pay-TV venture, Telepiu, and to divest his majority stake
in the Milan daily newspaper, Il Giornale Nuovo, which passed
to his brother Paolo. Critics of his communicative power were unimpressed
and in 1992 media workers mounted a strike to protest against Finivest's
domination of the advertising market.
pressure for tougher anti-trust legislation concided with a worsening
fiancial situation within Finivest, as the group absorbed the costs
of recent acquisitions. In 1986, Berlusconi had bought the football
club AC Milan and spent substantial sums on making it into the most
sucessful Italian club of all time. In 1988, he acquired the Standa
department store chain, one of largest in Italy. And, after an expensive
and bitterly fought contest with Carlo de Benedetti of the computer
company Olivetti, in 1990, he had made a major move into newspaper,
magazine and book publishing with the purchase of the Mondadori
group, giving him control of 20% of the domestic publishing market.
These outlays led to a 12 fold increase in the group's debt, which
stood at $2 billion by 1994.
with continuing demands for the break-up of his television empire,
he siezed the the political initiative and at the beginning of 1994,
announced that he would contest the forthcoming general election.
Luciano Benetton, head of the clothing group, spoke for many when
he wryly observed that, "Silvio Berlusconi's love of politics is
motivated by fear of loosing his television interests." His vehicle
was an entirely new party, Forza Italia (named after the football
chant "Go Italy") in coalition with the federalist Northern League
and the remnants of the neo-fascist MSI movement, renamed the National
Alliance. During the campaign he relied heavily on orchestrated
support from his press and television interests leading the distinguished
journalist, Indro Montanelli, to resign the editorship of Il
Giornale in protest. He projected an image of a man untouched
by the old corruption, in touch with the aspirations of young Italy,
and in favour of low taxation, free markets and personal choice.
coalition of the Right won 43% of the popular vote in the March
1994 poll and formed a government with Berlusconi as Prime Minister.
There were immediate allegations of conflicts of interest. He had
tried to forstall these at the start of his election campaign by
resigning from all managerial positions and handing chairmanship
of his major company to his old piano accompanist, Fidele Confalonieri.
But since he and his family still held 51% of the group's shares,
critics were unconvinced. These suspicions, coupled with the defection
of the Northern League, led to fall of his administration after
exit from office coincided with other shifts in his personal circumstances.
In July 1995 he announced that he had sold a 20% stake in his new
subsidiary, Mediaset (covering his television, advertsing, film
and record interests) to three outside investors (including the
German media magnate, Leo Kirch) for $1.1 billion. More shares were
sold later to banks and other institutions, reducing his holding
to 72%. Then, two days before the April 1996 election, he announced
a public flotation that would eliminate his majority control.
political standing was also under threat. His carefully cultivated
image of a man outside the corrupt old guard had been dented by
revelations that in 1978 he had joined the the secretive masonic
lodge, P2 (Propoganda 2) that had formed a powerful state within
a state with connections to the armed forces, secret services, banks
and government. Then in January 1996 he was called before magistrates
in Milan to answer charges that he had bribed financial police to
present a favourable tax audit of his corporate accounts.
helped to sour his return to politics in the General Election in
April 1996. Although he was elected as a member of parliament, his
right wing bloc was forced to conceed control of government to the
Olive Tree Alliance, Italy's first successful centre-left coalition
since the war.
or not he remains a central figure in Italian politics and business
in the future, Berlusconi will be remembered as the man who in the
space of just 25 years, built a conglomerate that rose to dominate
Italian commercial television, and to become Europe's second largest
media empire (after Bertelsmann of Germany) and Italy's third biggest
private company, and who used his communicative power and his flair
for showmanship to launch a new political party that gathered enough
votes to secure his election as Prime Minister in just four months.
Overall, his career over the last 25 years stands as an impressive
illustration and warning of the power of concentrated media ownership
in a lightly regulated marketplace.
BERLUSCONI. Born in Milan, Italy, 29 September 1936. Educated
at the University of Milan, degree in law, 1971. Married: 1) Carla
Dall'Ogglio (divorced), children: Marina and Pier; 2) Veronica Lario,
1990. Founded real estate development companies Cantieri Riuniti
Milanesi, 1962, and Edilnord, 1963; financed construction of suburbs
Milano 2, 1969, and Milano 3, 1976; created Telemilano cable television
system, 1974; established Canale 5 television network, 1980; purchased
television networks Italia 1, 1983, Rete 4, 1984; purchased movie
theater chain, 1985; purchased Milan AC soccer club, 1986; acquired
the La Standa department store chain, 1988; acquired interests in
publishing conglomerate Arnoldo Mondadori Editore S.p.A., 1990;
formed political party Forza Italia, 1993; Prime Minister of Italy,
1994. Member: Masonic lodge Propoganda 2, 1978 (disbanded, 1981);
Confindustria (Italian Manufacturers' Association). Honorary degree
in managerial engineering from Calabria University, 1991. Recipient:
Cavalliere del Lavoro, 1977; named Man of the Year by the International
Film and Programme Market of Television, Cable,and Satellite, 1991.
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