As Italian tyre and cable manufacturer Pirelli, backed by the Benetton retail empire, took over Telecom Italia, Europe's fifth-biggest telecom group, this weekend, the future of the telecom's financially beleaguered TV station, Telemontecarlo, was again called into question.
Just two months ago, Italy's highest appeals court cleared Telecom Italia and multimedia group Seat Pagine Gialle to take over the debt-ridden Telemontecarlo (TMC) from the troubled Cecchi Gori Group. The appeal court's decision ended a series of legal battles which broke out when Cecchi Gori sold a 25% TMC stake for cash to Telecom multimedia arm Seat-Tin.it last summer, and agreed to sell a further 50% in exchange for Seat-Tin.it shares.
But on Saturday, Pirelli chief Marco Tronchetti Provera announced a Euro 7 billion agreement by Pirelli and a Benetton family investment vehicle to buy a joint 23% stake in Olivetti SpA, which controls 55% of Telecom Italia. The two companies' total holding in Olivetti is now 27%, meaning they have effective control of Telecom Italia.
According to Rome daily La Repubblica, a number of industry insiders now expect Pirelli chief Marco Tronchetti Proveri to give full control of Telecom Italia's TMC shares to Seat.
While TMC is Italy's third largest broadcaster, it currently trails behind Mediaset and state-owned RAI with a market share of just 3%. TMC head Roberto Giovalli has vowed to bring the network's market share to 5% within the next two years.
Last month, as part of its highly publicized mission to revamp TMC, Seat-Tin.it relaunched the network, after naming it La Sette and wooing top presenters and executives away from rival private broadcaster Mediaset. The multimedia group also sealed a deal with MTV Italia to carry its programming on TMC's second channel.