The arrest of former Italian movie mogul Vittorio Cecchi Gori throws one big question into sharp relief: what will happen to his film interests if - as is looking increasingly inevitable - his once-formidable empire disintegrates'

To many, the answer could rock the landscape of the Italian film industry - and tilt the scales even further in favour of Cecchi Gori's former business partner-turned-arch rival: Silvio Berlusconi and his sprawling Fininvest empire.

'We're now facing the rubble after the explosion,' said Giuliano Montaldo, chairman of Rai Cinema shortly after Cecchi Gori was placed under house arrest for alleged wrongdoings linked to the bankruptcy of his former top league football club, Fiorentina.

'Cecchi was a reference point for many directors. Not just for commercial films, but for pictures from some of Italy's most respected directors such as Ettore Scola and Michelangelo Antonioni,' Montaldo said at a convention on the Italian film industry that was, ironically, held in the Cecchi Gori-owned Adriano Cinema in central Rome.

'For the Italian film industry, Cecchi Gori's downfall translates into a loss of extremely important structures - My hope is that it will lead to a freer market and will not lead to the consolidation of other monopolies.'

To his audience, Montaldo's reference to Medusa was plain for all to see. Since Cecchi Gori's financial troubles started in the late 90s, Medusa has steadily powered ahead of all its rivals to become the new market leader, essentially replacing Cecchi Gori as the stable of choice for the country's most popular comics and directors - from Oscar winner Gabriele Salvatores to Bernardo Bertolucci.

Tellingly, even staunch Cecchi Gori supporter Roberto Benigni - who has always been a notoriously vocal critic of Berlusconi - was forced to jump ship when CG realized he simply didn't have the money to release the lucrative Pinocchio.

Benigni's film, which has already grossed $20m since its October 11th nationwide release, was one of a package of 6 films that Medusa grabbed from the troubled group.

In the eyes of many, Cecchi Gori's troubles began when he tried to emulate Berlusconi, although to date he has denied this point-blank. Like Berlusconi, Cecchi Gori entered politics and became a senator, bought a football team (Berlusconi owns AC Milan) and tried to leave his mark on the national TV scene, snapping up Telemontecarlo (TMC).

However, as Berlusconi's fortunes rose, Cecchi Gori's star lost its shine. He was forced to sell TMC - at a huge loss - to multimedia group Seat Pagine Gialle. He lost his seat in the Senate; his football team went bankrupt as AC Milan snapped up a roster of star players; and his film business started on a downward spiral. This year, CG has distributed only one film and has no pictures in production.

Adding undoubtedly to Cecchi Gori's low morale, his executives have also been leaving en masse - most notably the company's veteran acquisitions consultant, Faruk Alatan, who had been with the group for 16 years - before being snatched up by Medusa.

Now, attention is focusing on Cecchi Gori's extensive exhibition interests. The group owns 42 lucrative screens in central Italy and Rome. Rumours have already centred around the group's best-loved cinema, the newly-restored Adriano multiplex, and its possible sale to Medusa. Both groups have denied that talks have taken place.

Fininvest already owns 43 screens across Italy through its Cinema 5 chain.

At the conference at the Adriano Cinema, Rome mayor Walter Veltroni suggested 'considering whether the Cecchi Gori group could receive public funds to stop it from going into liquidation,' - and risk Medusa gaining a complete monopoly of the country's cinemas.

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