2014 R&S Annual Directory Major Television Operators

Transcription

1 2014 R&S Annual Directory Major Television Operators Comparison of the RAI Group with major European peers in 2013 Comparison between studies published by R&S on major Italian television operators in the five-year period (for Sky, as at 30 June ) Overview of Public Broadcasting Services in Europe 1 Major European operators in public broadcasting services There are two business models in public broadcasting services in Europe: an integrated business model where a single operator is active on multiple platforms (TV, radio, web) and in different market areas (national, regional and international) and a specialized business model where several operators are active on various platforms and markets. Italy, the UK and Spain have adopted an integrated model (respectively with the Groups RAI, BBC and RTVE), while Germany and France have opted for a specialized model. In 2013, RAI held 100% of RAI Cinema, RAI Net, RAI Pubblicità, RAI Way (which has just been listed on the Italian Stock Exchange) and RAI World (for international services). The RAI Group s offer includes 14 television channels (three generalist, four semi-generalist and seven thematic) and seven radio channels. In the United Kingdom, the BBC Group includes BBC PSB (Public Sector Broadcasting) fully funded by the license fee, BBC World Service (for international services), BBC Monitoring and BBC Worldwide, international commercial services that are financed with advertising, not the license fee. The offer of the BBC Group includes 10 television channels and 15 radio channels. The main French TV public broadcaster is France Télévisions, which consolidates 18 subsidiaries (production companies, advertising sales and other services). In France, the radio service is run by a separate company, Radio France. German public radio and television are made up of two public consortia: ARD and ZDF. ARD (Arbeitsgemeinschaft der oeffentlich-rechtlichen Rundfunkanstalten der Bundesrepublik Deutschland), born at the end of World War II on the initiative of the Allies, is a consortium of local public televisions, i.e. belonging to the Länder of the Federal Republic of Germany. It consists of nine companies governed by public law (which own nine regional TV stations) that do not always correspond to the Länder, but macro-regions which originally reflected the Allied-occupied territories (Bavaria, Hesse, South-West, West, Central, North, Bremen, Berlin-Brandenburg, and Saarland). The consortium also owns Deutsche Welle ( German Wave, international TV service) and the national radio Deutschlandradio (jointly owned by ARD and ZDF). The Financial Statements of ARD consolidate all nine local entities, but not DW and Deutschlandradio (which manages 33 radio channels). In addition to the nine television channels of the macro-regions, the offer of the ARD consortium includes the generalist channel Das Erste and 7 thematic television channels (four of which in joint venture with ZDF). ZDF (Zweites Deutsches Fernsehen) is a TV operator founded in 1961 as a public entity; it broadcasts four national channels (ZDF, ZDFinfo, ZDFneo, ZDFkultur) and another four thematic channels in joint venture with ARD. The Spanish public broadcasting service sees RTVE (Radio y Televisión Española), which operates in an integrated manner at the national level and has a complex structure with diverse offerings in its area, coexist with several Televisiones Públicas Autonómicas (TPA, local independent broadcasting services), the majority of which are gathered together in the Federation Forta (Federación de Organismos de Radio y Televisión Autonómicos). Operating data and audience share License fee RAI had the lowest fee among the major European countries: in 2013 it amounted to 113.5, compared to in France, in the UK (a figure that will not change until ) and in 1 An empirical survey conducted in 2013 by Inflection Point showed that the quality of British TV programs (public service and commercial) was perceived by respondents as the best in respect of a panel of 14 countries, including Italy, which ranked towards the bottom of the list along with France and Spain; Germany was in an intermediate position. 1

2 Germany. Comparing the license fee on GDP per capita (Table 1), the highest ratio was in Germany followed by the United Kingdom, lower for Italy and France. It should be stressed that in terms of license fee evasion rate, Italy had the primacy of 27%, while it was 5% in the UK and virtually absent in France and Germany (1%) 2. The low license fee was partially offset by advertising in Italy, which was lacking in the BBC and was limited in quantity and time slots in France and Germany: German TV cannot broadcast more than 20 minutes of advertising messages per day until 8:00 pm and no advertisements in the channel for children. For RAI, the broadcasting of advertisements may not exceed 4% of the weekly programming (which means not exceeding 60 minutes advertising per day) and 12% each hour, the so-called limit on advertising concentration. Audience share RAI had the primacy in audience share, 40% in prime time, compared to 32.7% of the BBC, 31.5% of France Télévisions and 27.6% of ARD / ZDF in Germany. Summary accounting data of RAI, BBC, France Télévisions and ARD in 2013 Table 2 shows some summary data of the major European operators that provided information as at BBC, RAI and France Télévisions, partially ARD, stand out in terms of transparency and timeliness of information; ZDF and RTVE have poor or outdated balance sheet data 3. BBC and RAI are Groups that also include radio broadcasting services, unlike France Télévisions and ARD. As for the French radio and the German one, Radio France in 2013 had revenues of 641 million with a profit of 1 million, while Deutschlandradio reported 210 million in revenues with a loss of 16 million. In terms of revenues, ARD ( 6,412 million) and BBC ( 6,076 million) were the largest Groups, outdistancing by quite a margin France Télévisions ( 3,033 million) and RAI ( 2,647 million), which had revenues about half those of the German and British Groups. The revenues per employee saw the BBC in first place ( 293 thousand), bottom of the line RAI ( 204 thousand). The BBC s revenues were more than double those of RAI, but labor costs and number of employees were higher by only 46% and 60%, respectively. France Télévisions revenues were 15% higher than RAI s, but its labor costs were in line with those of the Italian TV network and it had fewer employees (approximately 2300 resources). ARD stood out for having the highest labor costs and the largest number of employees. The labor costs per capita amounted to 71 thousand for the BBC, which was below the figure for RAI, 77 thousand, ARD, , and France Télévisions, 90 thousand. The gap between the groups was confirmed by productivity: each BBC employee on average produced a net value added per capita of 91 thousand, 20% more than ARD and 8% more than RAI and France Télévisions. Accordingly, the ULC of the BBC was the best, standing at 78% versus 91.7% of RAI. France Télévisions and ARD were the worst of all bearing higher labor costs than their productivity (respectively, 105.9% and 104%). Even in terms of operating margins, the BBC was the best, with a ratio of EBIT to sales of 7% (RAI 3.1%), profit (loss) on continuing operations of 4.2% (RAI 2.6%) and net profit of 3% (RAI 0.2%). The ratios of ARD and France Télévisions were all negative. These trends were confirmed by ROI and ROE: those of the BBC were higher than those of RAI, while those of ARD and France Télévisions were negative. In terms of equity, ARD was financially more solid with negligible financial debts (financial debts were 0.7% of equity). The others followed at a distance: France Télévisions reported a ratio of financial debts over equity of 34.8% against 151.4% of RAI, while BBC had to bear a mass of debt more than three times higher than equity. In 2013, the investment rate in fixed assets of the BBC and France Télévisions Groups was almost double that of the RAI Group (respectively, 4.5% and 4.3% compared with 2.6%) and the average age of technical assets in the accounting records of BBC and France Télévisions was about half that of RAI (respectively, 10 and 12 against 23 years for RAI). No data are available for ARD. 2 In Germany, as from 1/1/2013, the payment of the licensee fee is based on residence, regardless of whether or not you have a television set. For businesses and institutions, the fee is based on the number of establishments, employees and vehicles. 3 The latest available data of ZDF are those for the year 2012 (it does not publish full financial statements), with revenues of 2,033 million, 85.1% of which from license fees. Also for the Spanish RTVE the latest financial statements available are those for the year 2012, with revenues of 921 million, 95.9% of which from public resources. For the BBC, the balance sheet data refer to the year 1 April March

3 Overview of the national industry In 2013, the radio & TV industry represented 0.55% of (Italian) GDP (0.58% in 2012) 4. In recent years, the television industry has been affected by major technology changes related to the strengthening of the digitization process, which influenced the structure of the supply chain, contributing to the emergence of new operators and the enrichment in the offer of audiovisual content, while in a context of economic downturn that has characterized the Italian economy in the five-year period 5. Major operators: revenues The television sector continued to be characterized by a negative economic performance in The four major Italian television operators (Mediaset, Sky Italia, RAI and La7) 6 in 2013 reported a drop in revenues of 3.5% (down 7.5% in 2012 and 2.2% in 2011), mainly due to the fall in advertising revenues (down 9.5% in line with the national television advertising market that closed 2013 with a drop of 10% 7 ); paid services (subscriptions and pay per view) held (up 0.3%) and the RAI license fee marked a slight increase (up 0.5%) (Table 3). The trend was similar, but more pronounced, if one looks at the period Aggregate revenues fell by 8.8%, penalized by the decline in advertising revenues (down 15.5%), while revenues from paid services (up 7.6%) and RAI license fee (up 6.6%) increased. Overall television revenues in 2013, which fell just under 9 billion (including 1 billion abroad, mainly in Spain), was derived from advertising as to 39.5% (42.6% in 2009), paid services as to 33.1% (28.1%) and the RAI license fee as to 19.4% (16.6%). Despite the continuing decrease, advertising remained the main source of funding for television media. The percentage of paid services was just below that of advertising, progressively increasing from In 2013, Mediaset suffered a decline in revenues of 8.8%, 7.3% for La7, for RAI only 1.1%. Sky (financial statements at 30 June 2013), in contrast, showed an increase of 1.2%. Note that Mediaset was the only group with international operations. In 2013, it made more than a quarter of its revenue abroad, mainly in Spain, where Mediaset España Comunicación ranked first in terms of audience share in 2013 (31% average share full day). The drop in sales was however attributable to Italy (down 10%). In the five-year period , RAI reported a fall in revenues (down 14.8%, to 2,647 million), greater than that of Mediaset (down 12%, to 3,358 million), although the fee increased by 6.6% reaching 1,737 million. The advertising drop suffered by RAI was double that of Mediaset (down 31% over 2009, against -13.8%), while the advertising sales of Sky and La7 grew (respectively up 20.4% and 15.4% from 2009). Separating radio advertising sales from television advertising sales for RAI, the drop in TV advertising sales was 30.1%, while that for radio was 41.2% in the five-year period 8. Mediaset benefited from the development of pay-per-view services, with revenues going from 311 million to 552 million between 2009 and 2013 (up 77.5%). The revenues of Sky from subscriptions were stable (up 0.3%), 36% higher than the RAI license fee (they were 45% higher in 2009). The main items of revenues of the television groups in 2013 were diverse: advertising sales for Mediaset (74% of the total, was 75.6% in 2009) and La7 (91.3%, up from 80.5% in 2009), the license fee for RAI (which stood at 65.6% of the total in 2013 up from 52.5% in 2009), subscriptions for Sky (83.2%, down slightly from 84.3% in 2009). 4 Source: AGCOM Annual Report The number of viewers who watch television programs broadcast by the channels of new operators was constantly growing: from 2009 to 2013, the increase was 8.1 pp (from 15.3% in 2009 to 23.4% in 2013). RAI and Mediaset thus witnessed the distance in audience share from the other television operators taken together gradually shrink. 6 The three groups surveyed in the R&S Directory were joined by LA7 s.r.l. which until 2012 was included in Telecom Italia Media-La7 division. On the transfer of the television broadcasting (channels La7 and La7d) and Internet (La7.it and La7.tv) activities of Telecom Italia Media to La7 s.r.l., a newly incorporated company, took effect. On , Telecom Italia Media sold its entire interest in La7 s.r.l. to Cairo Communication (previously operating in the television sector only as an advertising agency) for 1 million, having recapitalized the company for about 100 million. From , La7 s.r.l. was consolidated within the Cairo Communication Group. In September 2013, Telecom Italia Media also sold the 51% stake it held in MTV Italia to the Group Viacom International Media Works (which thus increased its share in MTV Italia to 100%, assuming complete editorial and operational control). 7 Source: AC Nielsen. 8 The vast majority of revenues in the radio sector came from advertising sales. 3

4 Major operators: figures per employee Sky Italia, which in 2013 was confirmed as leading RAI in terms of revenues, emerged as the television group with the highest revenues per employee (Table 4): 731 thousand (up 2.5% over 2009), 28% more than the figure for Mediaset, 571 thousand (down 8.8% over 2009) and more than three times the revenues per employee of RAI, which stood at 204 thousand (down 12.4% over 2009), even less than La7 ( 265 thousand, up 5.6%). In 2013, Sky Italia achieved revenues in excess of 7% to those of RAI, while having 70% fewer employees. With regard to labor productivity (measured by the net value added per employee), in 2013 Mediaset was confirmed in first place (with 134 thousand, an increase of 27.6% compared to 2012), followed by RAI ( 84 thousand, up 25.4%). The productivity of Sky Italia fell by 35.9% over the previous year, stopping at 66 thousand. The productivity of La7 remained negative. Between 2009 and 2013, only RAI showed an increase in labor productivity, rising from 76 thousand to 84 thousand (up 10.5%); that of Sky Italia fell by 44% (from 118 to 66 thousand) and that of Mediaset by 25.6% (from 180 to 134 thousand). But Sky could rely on lower unit labor costs, equal to 55 thousand per employee, well below RAI ( 77 thousand), La7 ( 90 thousand) and Mediaset ( 91 thousand). In 2013, Mediaset achieved the best ULC, with an impact of labor costs on the net value added of 67.9%, exceeding Sky Italia (83.3%), which was at the top in 2012, and ahead of RAI, which stopped at 91.7%, still an improvement compared to 2012 when it reported a rate higher than 100% (114.9%). The investment rate in tangible fixed assets was on average 15% of the existing stock between 2009 and 2013 for Sky Italia, 6.7% for Mediaset and 4.3% for RAI. In 2013, all companies reduced their investment rate over the previous year (down 3.8 pp Sky Italia, down 2.8 pp Mediaset, and down 1.5 pp RAI), except for La7, which maintained it stable (up 0.2 pp). In 2010, all Groups reduced their investment rate and since then the downhill trend was progressive and steady especially for Sky Italia (down 12 pp), followed by Mediaset (down 7.5 pp). RAI reported the smallest decline in the last four-year period (down 1.9 pp), while keeping the lowest average investment rate. In 2013, the average age of technical assets in the accounting records was 23 years for RAI, 13 years for La7, 12 years for Mediaset and 6 years for Sky Italia. Major operators: margins and net income With regard to operating profitability, in 2013 the overall picture was not bright and there was a deterioration in the five-year period for all Groups, both in terms of EBIT and profit (loss) on continuing operations (Table 5). Mediaset in 2013 reported the highest ratio of EBIT to revenues (7.5%), but half compared to RAI followed with 3.1% (still an increase compared to -0.2% five years earlier) and Sky with 1.4% (down 7.6 pp). La7 closed the line with always negative EBIT in the five-year period. Trends were confirmed by ROI and ROE (Table 6), a decrease in the period for all Groups, with the exception of RAI, which improved both ratios in 2013 reaching record values of ROE and ROI. In the five-year period, the best ROI (return on investment) was achieved by Sky Italia (15.5% average) ahead of Mediaset (9.3%), but in 2013 RAI reported the highest ROI (11%), followed by Mediaset and Sky (5%). ROI was always negative in the five-year period for TI Media, negative for RAI in the two-year period and again in As for the bottom line of the income statements, RAI, between 2009 and 2013, accumulated net losses amounting to 396 million, reporting profits in 2011 and 2013 only (respectively 4 and 5 million). Mediaset in the five-year period added together 571 million in net profits by closing 2012 only with a loss (loss of 287 million, largely caused by extraordinary write-downs) and Sky Italia of 314 million in the red by 48 million in the last year alone. La7 suffered total losses of 507 million, without ever achieving profits between 2009 and In the last two years no company paid out dividends. The most recent ones were 762 million distributed by Mediaset in the three-year period RAI last distributed dividends in the 2004 financial statements, TI Media in 2005, Sky Italia in In the five-year period, three television operators did not carry out capital increases: for RAI and Sky the latest change in share capital was in 2004, for Mediaset in Telecom Italia Media was an exception as it issued shares for 240 million in 2010 and recapitalized La7 s.r.l. for 100 million before selling it to Cairo Communication in

5 Major operators: employment Smaller sales slightly affected employment, which in the five-year period dropped by 3.9% involving nearly a thousand employees (Table 4). The contraction of the workforce was 3.5% at Mediaset (split -7.7% in Italy and +14.8% in Spain) 9, 3.6% at La7, 2.9% at RAI and more contained at Sky Italia (down 0.9%). The drop in workforce involved RAI journalists more significantly (down 6.3%), while those of other operators were on the rise (up 16.3% journalists of La7, up 5.7% those of Sky and 1.6% those of Mediaset). In the last year of the period, the reduction in workforce became altogether more significant: down 15.1% for La7, down 5.9% for Mediaset (of which, -6.5% in Italy and -3.8% in Spain), down 2.7% for Sky and down 1.5% for RAI. As for the composition of the employees, in 2013 La7 reported the highest rate of journalists (22.6% versus 14.7% of RAI and rates around 8% for Mediaset and Sky) and Mediaset that of executives (7.3% compared to 3.9% of Sky, 2.5% of RAI and 2.3% of LA7), which partially justified the highest labor costs per capita. RAI reported a higher percentage of blue collars (8.4% compared with 1.5% of Mediaset, nil at Sky and LA7), while the share of white collars was the highest at Sky (88%) and lowest at RAI (73.5%). Major operators: balance sheet With respect to the balance sheet, in the five-year period RAI was the only one to reduce equity (from 632 million at the end of 2009 to 296 at the end of 2013, down 53.2%) due to the accumulated losses. In the same period the financial debts grew from 172 to 448 million. Mediaset witnessed an increase in both financial debts and equity, but the former by a smaller amount than the latter (up 1.9% vs. 17.3%). Sky Italia thinned its financial exposure (from 418 million to 122 million, down 70.8%) and strengthened its capital base by 19.8% ( 743 million at the end of 2013). The equity of Telecom Italia Media was canceled by losses in (going from 116 million to a negative 32 million), but in 2013 Telecom Italia Media, before disposing of the entire interest in La7 s.r.l. to Cairo Communication, recapitalized the company, allowing it to close 2013 with equity again positive ( 122 million). As a result, only the financial structure of RAI progressively weakened in the five-year period: the ratio of financial debts on equity increased from 27.2% (2009) to 151.4% in That of Mediaset decreased from 65.4% to 56.9%. Sky Italia strengthened reporting an even more significant decline, from 67.5% in 2009 to 16.4% in 2013, standing out as the most solid group. In 2013, La7 had no financial debts. Major operators: audience and share In 2013, the Italian television audience, for the first time, exceeded the threshold of 10.5 million viewers on an average day, touching million in prime time. The growth was probably due to the enrichment of television content due to the specialized digital channels which, however, led to a progressive redistribution of audience at the expense of generalist channels. The latter, in fact, continued along the contraction trend of audience, reaching, in 2013, a 62.2% share on an average day, a decrease of 3.3 points compared to 2012 and 18.9 points compared to The generalist channels of RAI and Mediaset suffered from such foreseeable decrease, more marked for Mediaset (down 12.3 points compared to 2009), more contained for RAI (down 7.4 points). La7 was the only generalist channel to reverse the trend by reporting an increase in share (up 0.8 points in the five-year period). Considering the entire supply of content by the operators (generalist and specialized channels 10 ), in 2013 RAI kept its leadership with 38.6% share on an average day (down 1.2 points compared to 2012), ahead of Mediaset, 32.4% (down 1.4 points); followed by Sky (6.2%, down 0.2 points) and La7 (4.3%, up 0.5 points). La7 proved as the only one of four operators to report an increase in audience in 2013 compared to the previous year, along with the specialized channels of RAI and Mediaset (both up half a point). In 2013, Rai 1 was still in first place being the most viewed channel by the Italians on an average day (17.8%, down 0.5 points compared to 2012), ahead of Canale 5 (14.9%, down 0.4 points) and Rai 3 (7.3%, down 0.3 points). In the ranking of the specialist channels, those of the RAI Group ranked first. In 2013, they achieved a total 6.7% share on the whole day, ahead of Mediaset (5.9%), Discovery (5.5%) 11 and Sky (4.6%). In the Top 10 ranking of the 9 In 2010, the Mediaset Group acquired the Cuatro Group in Spain. 10 Semi-generalist and thematic channels. 11 At the end of December 2012, Discovery Italia s.r.l. (American Group Discovery Communications, the world leader in non-fiction content) acquired Switchover Media s.r.l. becoming the third Italian operator in terms of audience in specialized channels (with a total portfolio of 12 channels, including six in the free digital television sector: Real Time, DMax, Giallo, K2, Focus, Frisbee). In 2013, Discovery Italia s.r.l. acquired Switchover 5

6 most viewed specialized channels in 2013, Real Time (Discovery Italia) topped the ranks reporting an average of 1.5%, ahead of Rai YoYo and Iris (Mediaset) with 1.3%. In this Top 10 ranking, Rai placed four channels (RAI YoYo, Rai Premium, Rai 4 and Rai Movie), against three of Mediaset (Iris, Top Crime and Boing), the two channels of Discovery (Real Time and DMax) and the only one of Sky (Cielo). RAI stood out as the publisher with the widest free-to-air offer of digital channels in Italy (14 channels, Mediaset followed with 11 and Discovery Italy with 6), while in the pay-per-view segment of digital television the top operator was Mediaset. The rankings are similar if one looks at the audience figures in prime time in 2013: RAI in first place with 40% share (down 1.4 points compared to 2012), ahead of Mediaset, 33.8% (down 1.1 points), followed by Sky (6.9%, down 0.2 points) and La7 (5.4%, up 1 point). In 2013, Rai 1 was confirmed as the most watched channel by the Italians in prime time (19.1%, down 0.2 points over 2012), ahead of Canale 5 (15.3%, down 0.8 points) and Rai 3 (7.8%, down 0.5 points). With specific regard to the demand for information by viewers, free-to-air television was the main source from which citizens obtained the news. Conversely, pay televisions were a niche source of information. This evidence is supported by the viewership data relating to the main news shows: Sky TG24, the main news program of the pay television, reached viewership figures significantly lower than the newscasts on the main free-to-air channels, with an audience share which, in all time slots considered, remained below 1%. RAI, first of all, and Mediaset still represented the two major publishers to inform citizens on topical news. In 2013, the four evening newscasts of the RAI Group (including the regional newscasts) were viewed by 58.1% of the total population, the three newscasts of the Mediaset Group by 31%. The evening newscast TG1 remained in the first place by viewership even in 2013 (23.1%, the only one of all the newscasts that increased its audience share in 2013), followed by TG5 with 18.9%. The role of La7 consolidated, whose news program, in prime time, by viewership, overtook the news programs of Italia 1 and Rete 4. There was still a steady decline in viewers of TV news: the evening TG1 fell from a share or 28.5% in 2009 to 23.1% in 2013 (down 5.4 pp). TG5 did worse with a drop of 6.2 pp (from 25.1% to 18.9%). The RAI Group was the only one to be present in radio where it ranked second with 11.8% in 2013 (which includes 5.5% of Radio Uno, 4.2% of Radio Due and 2.1% of Radio Tre) in average daily audience behind 13% of the Finelco Group, consolidated at equity by RCS Media Group (broadcasters Radio 105 Network, Radio Monte Carlo and Virgin Radio) and ahead of Gruppo Editoriale L Espresso (broadcasters Radio Deejay, Radio Capital and m2o) with 11.1%. In peak time from 6.00 to 9.00 am, the RAI Group ranked first with 19% followed by Finelco with 13.3%. RAI: separate public service financial statements RAI, as a concessionaire of the national public broadcasting service, pursuant to the provisions of Law no. 112/2004, as from 2005, must, in separate accounting records, report revenues arising from the license fee and expenses incurred in providing the public service. The separate accounting of RAI in shows a net deficit of 346 million, i.e. the imbalance between revenues from license fees and public service costs. This deficiency was found starting from 2005 and accumulated from 2005 to 2012 reaching 2,345 million. Based on these accounts, RAI claims to have gained the right to be granted a license fee increase in order to lower this imbalance, up to reaching breakeven, charged to the predetermined public service. More simply, reducing evasion to a level of 7% (thus bringing it closer to the portion reported by major European countries), approximately 346 million in revenues could be recovered (i.e. 20% of the receipts from license fees in 2012), thereby eliminating the deficit. Media s.r.l., reporting revenues of 144 million (which includes 122 million from advertising), compared with 74 million in 2012, and closing the year with a loss of 7 million. 12 The separate accounts of RAI for the year 2013 are not yet available and will be brought to the examination of the Board of Directors, for possible approval, at its meeting on 10 December

7 Composition of revenues in 2013 (in million Euros and in %) Mediaset Sky Italia Rai La7 Advertising Rai License fee/subscriptions /Pay per view Other 9, 6 5, 7 8, 6 8, 7 16, 4 74, 0 85, 0 65, 6 91, 3 9, 3 25, 8 M e d i a s e t Sk y It a l i a Ra i La 7 Ad v e r t i s in g Ra i Li c e n s e fe e / S u b s c r i p t io n s /P a y pe r vi e w O t h e r 7

8 Composition of employees in 2013 (in number of resources and in %) M e d i a s e t Sk y It a l i a Ra i La Jo u r n a li s t s W h i t e co l la r s M a n a g e r s O t h e r 1, 5 0, 0 7, 3 3, 9 2, 5 9, 3 2, 3 0, 0 75, 1 82, 8 88, 0 73, 5 8, 4 8, 1 14, 7 22, 6 M e d i a s e t Sk y It a l i a Ra i La 7 Jo u r n a li s t s W h i t e co lla r s M a n a g e r s O t h e r 8

9 Labor costs, productivity (in thousand Euros) and ULC (%) 67, 9 83, 3 91, M e d i a s e t Sk y It a l i a Ra i V a l u e ad d e d La b o r co s t s UL C (% ) Investment rates in tangible assets (%) 20,4 17,5 16,4 9,6 9,4 7,6 5,9 4,5 4,5 12,2 4,9 4,1 2,2 8,4 2,6 2,4 2, Mediaset Rai Sky Italia La7 9

10 EBIT in % of revenues ( ) Mediaset 15,5 19,3 13,1 1,0 7,5 Rai -0,2-0,7 3,1-7,4 3,1 Sky Italia 9,0 5,7 4,6 6,8 1,4 La7-30,1-18,5-22,5-49,8-50,7 ROE ( ) Mediaset 13,2 15,5 10,0-11,9 0,4 Rai -8,9-15,6 0,8-45,7 1,7 Sky Italia 42,3 7,2 6,9 12,0-6,1 La7-41,1-15,9-29,1-118,1-31,0 ROI ( ) Mediaset 13,7 16,0 10,9 1,1 5,0 Rai -0,5-2,8 10,2-29,3 11,0 Sky Italia 25,0 14,6 11,7 21,4 5,0 La7-14,7-11,2-14,7-48,0-46,3 10

11 Audience share on an average day in % (television operators) 39,8 38,6 33,8 32,4 3,9 4,3 6,4 6,2 Rai Mediaset La7 Sky Audience share on an average day in % (top 10 channels) 18,3 17,8 15,3 14,9 7,7 7,3 7,6 7,3 6,8 6,5 5,9 5,0 3,4 3,8 1,4 1,5 0,9 1,3 1,1 1,3 Rai 1 Canale 5 (Mediaset) Rai 3 Rai 2 Italia 1 (Mediaset) Rete 4 (Mediaset) La7 Real Time (Discovery) Rai Yo yo Iris (Mediaset) Audience share of main evening newscasts in % 22,6 23,1 19,318,9 14,214,0 12,9 12,3 8,8 8,7 7,8 8,0 7,2 7,0 5,7 5,1 0,3 0,2 TG1 (Rai) TG5 (Mediaset) TGR (Rai) TG3 (Rai) TG2 (Rai) TG La7 Studio Aperto (Mediaset) TG4 (Mediaset) Sky TG

12 Table 1 - License fee and GDP per capita in 2013 Italy United Kingdom France Germany License fee (Euros per subscription) GDP per capita (Euros) license fee in % of GDP per capita Table data for major European operators Group Rai Group BBC Group France Télévisions Group ARD Net revenues (in million Euros) 2,647 6,076 3,033 6,412 including license fee of 1,737 4,469 2,502 5,433 license fee in % revenues Income statement margins (% of revenues) Value added Labor costs Earnings before interest, taxes, depreciation and amortization Earnings before interest and taxes Profit (loss) on continuing operations Net profit (loss) Data per employee (in thousand Euros) (*) Revenues Net value added Labor costs ULC Number of employees (average) 12,965 20,736 10,657 28,162 Financial ratios ROI ROE FD/equity (%) Depreciation rate (%) (a) n.a. Accumulated depreciation / gross techn. Assets n.a. Average age of techn. assets (in number of years) (b/a) n.a. Investment rate (in% gross tech. assets) n.a. (*) Referred to 2012 for ARD. Source: R&S-Mediobanca based on financial statements data 12

13 Table 3 - Composition of revenues Figures in million Euros in % of total in % of total % change % change Mediaset (Group) Net revenues Advertising 2, , , , , Pay per view Other TOTAL 3, , , , , RAI (Group) Net revenues License fee 1, , , , , Advertising (1) , Other TOTAL 3, , , , , SKY Italia Net revenues (2) Subscriptions 2, , , , , Advertising Pay per view Other TOTAL 2, , , , , La7 (Telecom Italia Media until 2012) (*) Net revenues Advertising (La7,La7d) Other TOTAL (3) Total Net revenues Advertising 4, , , , , Subscriptions and pay per view 2, , , , , License fee 1, , , , , Other 1, , Total 9, , , , , (1) Including television advertising of, respectively, 904, 945, 889, 683 and 632 million. (2) As at 30 June. (3) Until 2012, this was the division Telecom Italia Media-La7, which included the activities of the television channels La7 and La7d (the latter as from March 2010) and Internet activities (La7.it and La7.tv). (*) On , the transfer of television broadcasting activities (channels La7 and La7d) and internet activities (La7.it and La7.tv) of Telecom Italia Media into La7, a newly incorporated company, took effect. On 30 April 2013, Telecom Italia Media sold its entire interest in La7 to Cairo Communication for 1 million, after recapitalizing the company for about 100 million. As from May 1, La7 was consolidated by the Cairo Communication Group. In September 2013, Telecom Italia Media sold the 51% stake it held in MTV Italia to the Group Viacom International Media Works (which increased its stake in MTV Italia to 100%, assuming the complete editorial and operational control). Source: R&S-Mediobanca in % of total in % of total in % of total 13

14 Table 4 - Figures per employee In thousand Euros % change % change Mediaset (Group) Figures per employee Revenues Net value added Labor costs ULC No. of employees (average) 6,096 5,796 6,126 6,252 5, including journalists journalists in % of total RAI (Group) Figures per employee Revenues Net value added Labor costs ULC No. of employees (average) 13,352 13,295 13,133 13,158 12, including journalists 2,028 2,019 1,972 1,939 1, journalists in % of total SKY Italia (1) Figures per employee Revenues Net value added Labor costs ULC No. of employees (average) 3,932 3,935 3,995 4,005 3, including journalists journalists in % of total La7 (Telecom Italia Media until 2012) (*) Figures per employee (2) Revenues including TI Media-La Net value added n.c. Labor costs ULC n,c, n,c, n,c, No. of employees (average) including TI Media-La including journalists journalists in % of total Total employees No. of employees (average) 24,109 23,731 23,963 24,131 23, including journalists 2,902 2,899 2,855 2,890 2, journalists in % of total (1) As at 30 June. (2) Until 2012, this was the division Telecom Italia Media-La7, which included the activities of the television channels La7 and La7d (the latter as from March 2010) and Internet activities (La7.it and La7.tv). (*) On , the transfer of television broadcasting activities (channels La7 and La7d) and internet activities (La7.it and La7.tv) of Telecom Italia Media into La7, a newly incorporated company, took effect. On 30 April 2013, Telecom Italia Media sold its entire interest in La7 to Cairo Communication for 1 million, after recapitalizing the company for about 100 million. As from May 1, La7 was consolidated by the Cairo Communication Group. In September 2013, Telecom Italia Media sold the 51% stake it held in MTV Italia to the Group Viacom International Media Works (which increased its stake in MTV Italia to 100%, assuming the complete editorial and operational control). Table 5 - Ratios of revenues p.p. change In % of revenues Mediaset (Group) Income statement margins Value added Labor costs Earnings before interest, taxes, depreciation and amortization

15 Earnings before interest and taxes Profit (loss) on continuing operations RAI (Group) Income statement margins Value added Labor costs Earnings before interest, taxes, depreciation and amortization Earnings before interest and taxes Profit (loss) on continuing operations SKY Italia (1) Income statement margins Value added Labor costs Earnings before interest, taxes, depreciation and amortization Earnings before interest and taxes Profit (loss) on continuing operations La7 (Telecom Italia Media until 2012) (*) Income statement margins(2) Value added Labor costs Earnings before interest, taxes, depreciation and amortization Earnings before interest and taxes Profit (loss) on continuing operations Average Income statement margins Value added Labor costs Earnings before interest, taxes, depreciation and amortization Earnings before interest and taxes Profit (loss) on continuing operations (1) As at 30 June. (2) Until 2012, this was the division Telecom Italia Media-La7, which included the activities of the television channels La7 and La7d (the latter as from March 2010) and Internet activities (La7.it and La7.tv). (*) On , the transfer of television broadcasting activities (channels La7 and La7d) and internet activities (La7.it and La7.tv) of Telecom Italia Media into La7, a newly incorporated company, took effect. On 30 April 2013, Telecom Italia Media sold its entire interest in La7 to Cairo Communication for 1 million, after recapitalizing the company for about 100 million. As from May 1, La7 was consolidated by the Cairo Communication Group. In September 2013, Telecom Italia Media sold the 51% stake it held in MTV Italia to the Group Viacom International Media Works (which increased its stake in MTV Italia to 100%, assuming the complete editorial and operational control). 15

16 Table 6 - Financial ratios average p.p. change Mediaset (Group) FN/equity (%) ROI ROE RAI (Group) FN/equity (%) ROI ROE SKY Italia (1) FN/equity (%) ROI ROE La7 (Telecom Italia Media until 2012) (2)(*) FN/equity (%) neg. - n.c. ROI ROE (1) As at 30 June. FD= financial debt (2) Until 2012, this was the division Telecom Italia Media-La7, which included the activities of the television channels La7 and La7d (the latter as from March 2010) and Internet activities (La7.it and La7.tv). (*) On , the transfer of television broadcasting activities (channels La7 and La7d) and internet activities (La7.it and La7.tv) of Telecom Italia Media into La7, a newly incorporated company, took effect. On 30 April 2013, Telecom Italia Media sold its entire interest in La7 to Cairo Communication for 1 million, after recapitalizing the company for about 100 million. As from May 1, La7 was consolidated by the Cairo Communication Group. In September 2013, Telecom Italia Media sold the 51% stake it held in MTV Italia to the Group Viacom International Media Works (which increased its stake in MTV Italia to 100%, assuming the complete editorial and operational control). Source: R&S-Mediobanca 16