Pro7 Board Rejects Berlusconi Family Plan to Split Up German Broadcaster

The executive and supervisory board of German media group ProSiebenSat.1 on Wednesday rejected proposals by the Berlusconi-backed MediaForEurope (MFE) group that would have radically restructured the company.

MFE’s proposals would have seen ProSieben spin off its Dating & Video and Commerce & Ventures operations and appoint new, pro-MFE members to the group’s board.

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But ProSieben rejected that, saying while the split up was in the “unique interests of MFE,” it was “not in the best interests of all shareholders” and that the proposals would result in “direct destruction of value” at the company. ProSieben’s board predicted the move would force down the company’s stock price without impacting its net debt load.

MFE, which is majority-owned by the Berlusconi family’s Fininvest Group, is already ProSieben’s largest shareholder, controlling just under 30 percent of the shares in the Munich-based company, just short of the threshold that would trigger an automatic takeover offer under German business law. There is widespread speculation that the Italian group has been looking to secure defacto control over ProSieben without having to go through a pricey buyout by stealthily arranging majority support on the board.

MFE proposed replacing supervisory board member and chairman of the audit committee Rolf Nonnenmacher with former EY auditor Simone Scettri and adding former Italian Citibank investment banker Leopoldo Attolico and former CEO of Croatian broadcaster RTL Televizija Christoph Mainusch to the ProSieben board. The group claimed MFE’s proposals for new board members would give it and the company’s second-largest shareholder, the Czech investment group PPF, an effective “majority” despite the two companies not owning a controlling share in the company.

ProSieben pointed to existing supervisory members Katharina Behrends and Klára Brachtlová, who already had “direct and close ties” with MFE and PPF, respectively. (Behrends is the regional boss for German-speaking Europe for MFE; Brachtlová is a senior executive at PPF-controlled broadcaster Central European Media Enterprises.) Scettri and Attolico are considered close to MFE. Mainusch was put forward by PPF.

ProSieben takes issue with Scettri, noting that as auditor he did “not raise any objections to the violations” of German business law at ProSieben division Jochen Schweizer mydays, which got into regulatory trouble in 2022, resulting in ProSieben having to delay its 2023 results.

The media group is Germany’s second-largest commercial television company behind Bertelsmann-owned RTL Group and posted full-year 2023 results earlier this month that showed a €100 million ($108 million) drop in profits to €578 million ($625 million) with revenues slipping 7.5 percent. The company is struggling amid a slugging TV ad market and an uphill battle to establish itself in the streaming space with its German VOD offering Joyn.

MFE is also in a period of transition, following the death of corporate patriarch Silvio Berlusconi last year. He left control of his company to his children Pier Silvio Berlusconi and Marina Berlusconi. MFE controls Italian TV and cinema group Mediaset in Italy and Spain’s Mediaset Espana, who own the Spanish network Telecinco.

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