Silvio Berlusconi, Italy’s longest-serving post-war prime minister, is dead and, as a key player in the country’s ruling coalition until his passing, there is much debate over what it means for Italian politics.
Yet Mr Berlusconi‘s career in politics only came after his success in commerce – and even more interesting is the question of what happens to his business empire.
Although trophy assets such as AC Milan – offloaded to a Chinese buyer in 2017 – have long since been sold, Mr Berlusconi still owned a significant number of businesses at the time of his passing, the futures of which are now the subject of much speculation.
Mr Berlusconi’s main holding company, Fininvest, is chaired by his eldest child, Marina, 56, while its directors include Pier Silvio, 54, Marina’s brother.
Also on its board are Barbara, 38, and Luigi, 34, Mr Berlusconi’s third and fifth children from his second marriage. Mr Berlusconi’s fourth child, Eleonora, 36, is the only one not on the board.
Fininvest, which employs more than 20,000 people worldwide, reported sales of €3.8bn in 2021 and earnings before interest and taxation of €373.8m.
A private company, it was 61.3% owned by Mr Berlusconi, with Marina and Pier Silvio owning 7.65% each. Barbara, Eleonora and Luigi each own 7.14% shareholdings. The remaining 2.06% shareholding is owned by Fininvest itself.
An empire up for grabs
No one knows, at present, what will happen to Mr Berlusconi’s stake in Fininvest.
The expectation has been that it would be divided equally between the five children but the Italian media has speculated that Marta Fascina, Mr Berlusconi’s partner at the time of his death and who he latterly referred to as his wife, may also have bequeathed some of his shareholding.
Either way, Marina, a notoriously though negotiator who worked alongside her father for many years and who has chaired Fininvest since 2005, is expected to lead the empire and call the shots following her father’s passing.
Fininvest’s most valuable asset, surprisingly, is not in the media industry in which Mr Berlusconi initially made his fortune but is a 30% stake in Mediolanum, the banking and financial services combine. It is currently worth €1.83bn.
But the best known of Fininvest’s assets is MFE, Media for Europe, which is listed on the Milan stock exchange and which is 48.6% owned by Fininvest.
The foundation of Mr Berlusconi’s wealth, it was previously named Mediaset and was Italy‘s first and largest commercial broadcaster.
It owns 13 TV channels in the country, including Canale 5, Italia 1 and Cartoonito, as well as three Italian radio stations and five TV channels in Spain. With a stock market valuation of €1.66bn, it also owns a 26.58% stake in ProSiebenSat 1, the German TV broadcaster.
That stake, at the current value, is worth €531.6m – putting an implied valuation of just €1.128billion on all of MFE’s other media interests in Italy and Spain.
There will naturally be speculation as to what happens to Fininvest’s stake in MFE, whose shares initially rose by 10% on news of Mr Berlusconi’s death.
That decision is likely to be made by Pier Silvio, MFE’s chief executive and Marina, who sits on its board.
The big question for them is whether Fininvest should retain its stake in MFE or conclude that the business is better off, in the face of intensifying competition, throwing in its lot with another European broadcaster.
Mr Berlusconi was a believer in toughing it out but his children may have other ideas.
Central to the debate over MFE will be its second largest shareholder Vivendi, the €8.6bn French media giant, whose assets include the video games publisher Gameloft, the film maker Canal+, the advertising and public relations company Havas and a shareholding in Universal Music Group.
Vivendi, which owns 23.6% of MFE, first acquired a stake in the old Mediaset in December 2016 but the pair were subsequently involved in legal disputes that remained unsettled until May 2021. Under the agreement reached then, Vivendi may not raise its stake in MFE until 2026.
Fininvest’s next largest asset is Mondadori, Italy’s largest book and magazine publisher, in which it owns a 53.3% stake.
At Mondadori’s current stock market valuation of €517.7m, this is worth €275.9m. Mondadori has a 24.8% share of Italy’s book publishing market, 21.2% of its educational publishing market and 24.2% of its magazine publishing market.
It is also the third biggest player in the French magazine publishing market and owns Italy’s largest chain of bookshops. Chaired by Marina, it enjoyed sales of €903m in 2022 and profits of €52m, representing its best financial performance in 15 years.
Other Fininvest assets include the historic Milan theatre Teatro Manzoni, rescued by Mr Berlusconi in 1978 when it was at risk of being converted into a supermarket and AC Monza, a football club based in the town of Arcore near the tycoon’s villa.
Having languished in the lower reaches of Italian football for most of this century, during which it has been plagued with financial uncertainty, it was acquired by Mr Berlusconi in 2018 when it was in the third tier of Italian football. It was promoted to Serie A, the first tier, for the first time in its history at the end of the 2021-22 season.
Mystery property assets
Apart from Fininvest, Mr Berlusconi owned another holding company, Dolcedrago, which contained many of his commercial property assets. The value of these is unknowable.
There were also a clutch of residential property assets that he owned directly, chiefly a number of villas.
These include his residence in Arcore and other villas in – among other locations – the Mediterranean island of Lampedusa and on Lake Maggiore.
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There was also a villa in Rome, once owned by the legendary film director Franco Zeffirelli, as well as residences in other playgrounds of the rich such as Cannes in France and Antigua in the West indies. Other assets included five apartments and two garages in Milan.
The precise number of property assets Mr Berlusconi owned, though, remains unknown.
There were also other accoutrements of wealth, including helicopters, speedboats, a mega-yacht and some film assets, as well as minority shareholdings in two more banks – Banca Popolare di Napoli and Banca Popolare di Sondrio – and the sports company Forza 5.
With Italian media describing Mr Berlusconi’s financial affairs as “poorly accounted”, identifying which assets will go to heir who may take many months, if not years.
The deterioration of prospects for traditional media assets means Mr Berlusconi’s total wealth at the time of his passing may well fall short of the €7bn or so that has been calculated by the influential business publication Forbes.
But one thing is certain. His assets were worth considerably more than the taxable value of €17.7m declared to the Italian parliament in 2021.