In Italy, Berlusconi's Back. His Business Isn't

As the billionaire’s political future brightens, his companies suffer

Silvio Berlusconi, Italy's former prime minister, after a hand over ceremony at the Chigi palace in Rome, Italy.Photograph by Alessia Pierdomenico/Bloomberg

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By Kristen Schweizer and Daniele Lepido

May 2, 2013 at 7:56 PM UTC

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This article is part of the May 6, 2013 issue of businessweek.

Former Italian Prime Minister Silvio Berlusconi’s political fortunes have rebounded since he played a big role in talks that led to the formation of a new government on April 28, ending a nine-week stalemate. But his media empire is in a slump. Mediaset, which owns TV networks in Italy and Spain and news websites, in March reported its first annual loss. Last year Mediaset sold its 33 percent stake in Endemol, creator of the Big Brother TV franchise, saying the Dutch company was no longer a strategic fit. For several months this winter, Milan-based Mediaset and the Benetton family tried unsuccessfully to sell a cinema chain they co-own.

“Berlusconi’s political adventure did Mediaset harm,” says Massimo Scaglioni, an assistant professor of media history at Catholic University of Milan. “In the early years when he was prime minister, the company got used to not having serious competition and drew advertising without much effort. This stopped it from focusing on the quality of its shows.”