[Rossoneri7]

London - At this year's Winter Olympics, one face was missing from the throngs of people banging cowbells and hollering "hup-hup" at the downhill skiers. Italian Prime Minister Silvio Berlusconi waited until the closing ceremony of the Games to make his appearance in Turin. Why did Il Cavaliere, as he is known, give the quadrennial jamboree the cold shoulder?

Because Berlusconi, as owner of the storied AC Milan soccer club, couldn't give a fresh fig about sledding, skeletoning or the slalom. This is the man who christened his Forza Italia political party after the hortatory "Play up Italy" yells of fans of the country's soccer team. In this, the Prime Minister is hardly atypical. On an average Italian male's sliding scale of values, calcio, Italian for soccer, comes after women--but before food, politics and culture. Winter sports aren't even on the map.

But is the billionaire's tussle with Rupert Murdoch destroying the game he purports to love?

To wit: As a sporting contest, Italian soccer is getting boring. And it's mostly a symptom of the unfair way in which television money is divvied up between the giants and minnows of Serie A, the top division of the Italian soccer league.

Europe's other top leagues--England's Premier League, France's Ligue 1, Germany's Bundesliga and Spain's La Liga--negotiate television money collectively. And it's probably a safe bet to say that collective bargaining, which tends to more equally spread money among teams, has made competition consistently compelling and an attractive proposition for fans and broadcasters.

Yet in Italy, the absence of a collective television contract means clubs negotiate their own deals with broadcasters. Thus, the most popular clubs command huge sums, which help to keep their stable of world-class players in Jacuzzis and Lamborghinis, while less popular teams fight over crumbs.

Mediaset, the Italian television network controlled by Berlusconi's family through its Fininvest financial holding company, has just struck a two-year, $300 million (€248 million) deal with current league leader Juventus. The deal includes an option for upcoming seasons for the exclusive broadcasting of home matches. It was the first in a string of contract extensions with the big clubs: Deals with other big fish such as Inter Milan, Roma, Lazio and AC Milan--yup, that's Berlusconi's own club--have all been inked, or will be shortly. Four of these five clubs are currently placed in the top five of Serie A, and the sixth-placed club is now 33 points adrift of top-placed Juventus. That's light years in soccer terms.

Murdoch's Sky-Italia had a monopoly on the broadcasting of Italian soccer games until 14 months ago. But you have to return to the genesis of the satellite station to learn how Mediaset snuck in through the back door to compete for soccer on Italian television. The European Commission clipped News Corp.'s (nyse: NWS - news - people ) wings when Murdoch merged Italian television operators Stream and Telepiu to form his station in 2003. The EC told News Corp. that all of its rights contracts must be capped at two years and apply only to satellite.

So Mediaset launched its--admittedly exquisite--pay-per-view operation in January 2005. It negotiated separate deals with the biggest clubs to show their games over digital terrestrial television and gave fans the opportunity to watch matches by purchasing viewing cards from the local tabaccaio for €3. The scheme appealed to viewers who might not want the kind of long-term contract--or films and foreign programming--Murdoch's Sky-Italia offered along with its monthly subscription.

Even before this pay-per-view operation was rolled out, Berlusconi's government was announcing quixotic plans to pull Italy into an all-digital world by the end of 2006. To ease the transition, a generous state subsidy was offered to both digital-television broadcasters and consumers of the new digital set-top boxes.

All this would be fine and dandy if every club in Italy had the same amount of supporters. But 26 million out of Italy's 30 million soccer fans (87%) claim to follow Juventus, AC Milan or Inter Milan. So we're guessing there are plenty more viewing-card takers for the Milan derby--when Berlusconi's team plays its sworn rivals, Inter--rather than when the likes of Roma or Lazio thump a lesser team such as Lecce or Treviso. Thus it makes good economics sense for Mediaset to open its wallet for the biggest teams when it comes to renewing viewing rights. But soccer is the loser when three-quarters of Serie A are receiving up to ten times less money than their fortune-favored rivals.

The deals guarantee Mediaset live coverage of the top clubs' games until 2009, and the broadcaster was canny enough to pay extra for an option on the 2009-10 season.

So is it possible legislation can make Italian soccer interesting again? Not, it seems, while Berlusconi is in power. Following Mediaset's deal with Juventus, there was plenty of political lobbying to change the law. Fourteen Serie A clubs pushed for a return to collective bargaining in the hope that the money will be more equally spread among the division's 20 teams. But Forza Italia--Berlusconi's soccer-loving political party--vetoed proposals in January. Its reasoning? It claimed there was not enough time to reach an agreement before the elections on April 9.

"Democracy doesn't exist in Italy," opined the president of Sicilian team Palermo, when Forza Italia refused to budge. "All there is is a group of powerful clubs that try to get their hands on something that will suit them and help them win for the next few years. We are constantly reinforcing the power of the big clubs at the expense of the smaller ones."

None of this would surprise your average Italian. They'd shrug and claim it's just good, old--or bad, old-- Berlusconismo. But there is one more twist in the tale.

Mediaset is renewing the exclusive viewing rights with the top clubs, keeping the best bits and shopping the stuff it can't use to Murdoch. For instance, the company sold the satellite rights for the Juventus matches it acquired last December to Sky Italia for $190 million (€157 million) and kept the rights for terrestrial digital, Internet, mobile telephones and the foreign market. That's like scraping the juicy mozzarella and tomato off the top of the pizza for yourself and handing over the base to your hungry younger brother for a tidy sum.

Giorgio Marchetti, the director of professional association football at UEFA, the European governing body of the sport, acknowledges on the organization's Web site that the playing field has completely changed over the past few years. "TV rights were an important source of income, but they did not have the same importance as they have received in the last decade. And this is due to the development of technology and the change in the media market," he says. "It's like expanding a real stadium into a virtual stadium. In soccer, we cannot say there was a golden time when all clubs had an equal chance to win, but in the past, there were more chances for all clubs to compete.

"In Italy, the big clubs could fill their stadium with 70,000 people, while the smaller ones would get 20,000; but now the virtual stadium gives the bigger clubs the possibility of an audience of millions, or even billions, while the smaller clubs have only thousands, even on TV," Marchetti continues. The director concludes that the central marketing of rights is the only answer for a correct balance of competition. There's just enough competitive balance, and there are sufficient rewards for the top clubs to compete with their European counterparts when they qualify for pan-continental competitions such as the Champions League or UEFA Cup.

All this makes Italy's Serie A's individual bargaining system sound even more unfair. But remember, plenty of things are unfair in Italy. The division in wealth between the rich, industrial north and the poor, rural south; the enduring grip of the country's Mafia; and the cult of machismo for starters.

But the country's soccer imbroglio seems easier to untangle. Most soccer fans subscribe to the notion that a strong league of teams is essential in terms of spectacle, so most would agree the top-heavy distribution of riches in soccer is a rotten deal that puts the economic interests of clubs above sporting interests.

You can persevere with your soccer mini-league if you wish, Signor Berlusconi. But for us, it's a turnoff.

Forbes

[Rossoneri7]

Very interesting read .. What can I say, business and politics are a catalyst for sucess (IMG:http://cyrus.medialayer.net/~m1ke/milanfan.com/forums/style_emoticons/default/king.gif)

Well, I guess Silvio is a 'sun Tzu' of his own .. If he didn't grabe that pie, others would have jumped at the chance (IMG:http://cyrus.medialayer.net/~m1ke/milanfan.com/forums/style_emoticons/default/cool.gif)

This post has been edited by Rossoneri7: Nov 13 2006, 02:33 PM

[han2503]

Very interesting read .. What can I say, business and politics are a catalyst for sucess (IMG:http://cyrus.medialayer.net/~m1ke/milanfan.com/forums/style_emoticons/default/king.gif)

Well, I guess Silvio is a 'sun Tzu' of his own .. If he didn't grabe that pie, others would have jumped at the chance (IMG:http://cyrus.medialayer.net/~m1ke/milanfan.com/forums/style_emoticons/default/cool.gif)

Yeah I read that! It's not some kind of big news that forbes revealed, I mean this is Italy they're talking about.

[Rossoneri7]

Yeah I read that! It's not some kind of big news that forbes revealed, I mean this is Italy they're talking about.

Well the writer of this article is American, its not like the billion dollar corp(s) in the US don't take advantage of situations that involve taking bigger pieces of the pie, plus this happens everywhere .. It's unethical, but hey, if there is a stake up for grabs .. There will always be someone to conquer it


But ofcourse the BIG clubs will take the higher cuts, I mean he did state that they have the majority of fan base in Italy :

All this would be fine and dandy if every club in Italy had the same amount of supporters. But 26 million out of Italy's 30 million soccer fans (87%) claim to follow Juventus, AC Milan or Inter Milan.

This post has been edited by Rossoneri7: Nov 13 2006, 09:40 PM

[misha]

I have read that this all is going to change although I doubt it (IMG:http://cyrus.medialayer.net/~m1ke/milanfan.com/forums/style_emoticons/default/wink.gif)

[Rossoneri7]

Well, Misha, for the good of the sport it should change .. But we all know it aint a fair world we r living in so some things will just remain the way they r .. Since Silvio's party has, still, very strong influence in the government (IMG:http://cyrus.medialayer.net/~m1ke/milanfan.com/forums/style_emoticons/default/wink.gif)

I'm sure that the majority of ppl who follow Serie A know of this, but the mere details were interesting .. Thought it would be a good idea to remind ppl who 'think' that our board is no longer able to care for our beloved Milan, that they are here, alive, and the most powerful in the business (IMG:http://cyrus.medialayer.net/~m1ke/milanfan.com/forums/style_emoticons/default/devil.gif)

[misha]

Now it maybe will be easier to past the law about collective bargaining but as you said Silvio has has still enough power. Yes it's unfair world and too many powerful ppl benefits from this. Let's face it, it's bother us a little bit less cuz it's good for Milan

[Rossoneri7]

Now it maybe will be easier to past the law about collective bargaining  but as you said Silvio has has still enough power. Yes it's unfair world and too many powerful ppl benefits from this. Let's face it, it's bother us a little bit less cuz it's good for Milan

Well said (IMG:http://cyrus.medialayer.net/~m1ke/milanfan.com/forums/style_emoticons/default/king.gif)

[I_Rossoneri]

I like the way Don Silvio mis cast as the evil villain while Murdoch is shown as an angel (IMG:http://cyrus.medialayer.net/~m1ke/milanfan.com/forums/style_emoticons/default/rolleyes.gif) I have Sky and it costs £52 a month(sky+) and even then there is still PPV games!!!!! (IMG:http://cyrus.medialayer.net/~m1ke/milanfan.com/forums/style_emoticons/default/ohmy.gif) At least Mediaset was all PPV.

[han2503]

I also love it how Silvio is the one that is the big "mastermind" behind this. It's not like Moratti's Inter and the Agnielli familie's Juventus don't benefit from this (IMG:http://cyrus.medialayer.net/~m1ke/milanfan.com/forums/style_emoticons/default/rolleyes.gif)