Single network maybe not… pole of the towers yes…maybe. These are the two great unknowns that are looming on the horizon of the TLC market in 2022. Traces of the single network have been lost for some time despite the recent rekindling of attention following the expression of interest by the American Fund Kkr on TIM, and the parallel willingness of Vivendi, TIM's majority shareholder, to deem public control over the new company possible Access Co (TIM and CdP), and the departure of Luigi Gubitosi from the board of the Italian telephone giant. Instead, a completely different scenario could be envisaged for the so-called "unique pole of the towers” which has been talked about for years without ever coming to terms with it.
The news of the day was published this morning by Il Foglio where Stefano Cingolani writes "The future of Mediaset, which looks above all abroad, depends on Rai. Indeed, in March Rai Way, 65% controlled by Rai, and Ei Towers (60% by the F2i fund) should merge, creating a single TV repeater company”. To better understand the possible meaning of this operation, however, it is necessary to take a small step back. Last June we published a interview with Stefano Ciccotti , CFO Rai, where he declared that "... it concerns aspects of corporate strategic positioning that go far beyond a technological reading such as the one I am responsible for...". Then, in mid-September, Marco Giordani, the CFO of Mediaset he said: “We have always been in favor of consolidation in broadcast towers. We also tried to take an active part in this process and were stopped. But from an industrial point of view the merger still makes sense and it is a valid option for all shareholders”. This declaration hits the mark not only as regards the strategic interests of the second national television operator but also as regards the heart of the future of Rai.
There are two possible readings: one purely technological (the advantage of the system, the optimization of the television signal diffusion network) and the other, at the moment it seems to be the more relevant one, of an economic nature. As known, the coffers of Viale Mazzini are suffering and the prospects are not at all reassuring: the television audience, as President Marinella Soldi also recently declared, is rapidly decreasing to the benefit of various Otts (the so-called Over the top such as Netflix, Amazon Prime etc) and, consequently, advertising could also be affected (see also the recent Tusmar revision decree and relative resignation of advertising quotas). A future threat then weighs on the fee not yet fully clarified: Brussels would like (regulation on competition) the return to payment through the old system of the Post Office bill which could mean a return to the evasion of many tens of millions of euros. For Rai to get rid of the "heavy" part (the "iron" or the so-called high-altitude towers) of the listed Rai Way, before it's too late, could prove to be an advantageous, useful and perhaps necessary operation in order to have the necessary funds to technological development.
At the same time Mediaset it may have great advantages in realizing a useful cash flow to invest in the new European strategic prospects (see Prosienbensat in Germany and the attentions in Spain) even if it does not seem at all clear where the mentioned 400 million could come from. Therefore, there is a very important economic stake on the table on which weigh many questions of various kinds. Who is the inspirer of this hypothesis, the Government or those directly involved, and with what design? Who manages the direction of this operation? Should it take place under the protection of a public "umbrella" or should it be a mere M&A transaction? The "new" company tower polei should be listed (Ei Towers recently delisted and Rai Way could/should do the same)? How does this fusion hypothesis interact with the single network company, assuming that the latter can have a future? Finally, in the article of the law that Mediaset could obtain a substantial economic advantage and Rai instead? What could be the interest for the Public Service? It is difficult to find comprehensive answers.
We have tried to find verifications on this news and, confidentially, our sources both in Viale Mazzini and in Cologno Monzese have confirmed to us that, at the moment and for the times so close together as they were indicated in the article (next March) no negotiations are in progress. The synthesis is in a joke that was told to us: "Right now the headache for broadcasters does not come from the towers but from the broadband and it is on that front that we must commit ourselves". Perhaps a key to understanding this operation could be found in the possible infrastructural convergences between the network and broadcast where both Rai and Mediaset could have parallel interests.
So, all that remains is to search possible interpretations in ministerial fields (the MISE? Or Technological Innovation and Digital Transition?) where instead there could be more attention to an operation of this type for at least two good reasons. The first can be traced back to a planning dimension of government action: bringing home an "easy and usable" result in the TLC sector which is certainly "reliable" as has been suggested to us, on the financial markets. The second reason, more recondite and complex, is to provide a "bank" above all to Rai in view of the need to face the budgetary difficulties that we mentioned earlier by freeing it from a burden that is as heavy and unprofitable as it is potentially profitable by putting the part back on the market residual share package of Rai Way.
Finally, it should be remembered that this year Viale Mazzini opens a game of great strategic importance: the new Business Plan will have to be written as envisaged by the Service Contract, while a work table for the renewal of the latter has been set up since 14 October which will expire within the current year. As far as we have been able to verify, there are no traces of this merger hypothesis which would involve Rai Way.
