Mediaset Embarks On Cost-cutting Programme
Mediaset, the largest commercial broadcaster in Italy, has announced that it plans to significantly reduce costs in 2002. Mediaset CEO Giulano Adreani said in an interview with Italian daily Il Sole 24 Ore that it plans to reduce its outlay in TV rights by 100 million euros and personnel costs by 50 million euros this year.
Adreani also spoke about the Mediaset’s Spanish operations in the shape of Telecinco. He expects that Mediaset will raise its stake to 49 percent in Telecinco by buying a 9 percent stake from Kirch. Adreani also expects that Telecinco will contribute 20 million euros less in earnings to Mediaset’s group results in 2001.
Brandon DiMassa, a media equity analyst at Dresdner Kleinwort Wasserstein, told Interspace that he believes it will be a tough year ahead for European broadcasters. He said: “I think it is going to be tough year as we think all European broadcasters will suffer from a decline of 2-3 percent in advertising. Given the way these broadcasters operate with mostly fixed-cost structure. If you grow costs just another couple of percentage points, I think you will see another decline in EBITDA for most of these companies. I think Mediaset will have a little bit of a better time as they will hit these cost-cutting targets, but I still probably see a double-digit fall in EBITDA for them.”