Berlusconi | Alan Friedman

Published: 2015

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Silvio Berlusconi is undoubtedly one of Europe’s most controversial leaders in modern times. He is the European leader who has been in power the longest and has been compared to Italy’s equivalent of Ronald Reagan. In the book that bears his name, the American journalist Alan Friedman has mapped his life, from his simple upbringing in Milan to the position of prime minister and the life as a billionaire in the 18th century estate in Arcore.

THE REAL ESTATE MAGNATE. Berlusconi was born into a middle-class family in Milan in 1936. After studying law in the 1960s, he entered the real estate industry with a focus on housing development outside Milan. In the post-war northern Italy, the construction industry was hot. The strong economy required labor that flowed in from the poorer southern parts of the country and the new workers demanded housing. The project that would make Berlusconi rich was “Milano Due” and included the development of a new district with 4,000 apartments east of Milan. He started this project in 1961 and the first stage was completed in 1973 – then he bought the 70-room mansion Villa San Martino in Arcore.

THE MEDIA MOGUL. “Milano Due” was also his introduction to the media industry as the residential area had its own TV service. In 1974, the state-regulated television market changed. Local stations were allowed, but only the state channel RAI had the right to broadcast nationwide. Berlusconi realized that if he could buy local stations around the country and then broadcast the same program on them at the same time, he would be a nationwide player – and still following the “local only” rules. The Italian advertising-financed nationwide television was by that a fact in the late 1970s.

CHALLENGES THE STATE TV. To attract viewers, Berlusconi bought up rights to major American films and series. He also skipped steps in the value chain and started his own advertising agency, which turned directly to advertisers. In 1980, his Canale 5 had 13% of the market, compared to the state RAI’s 80%. Four years later, the channels had the same number of viewers. The success story was a fact and advertising revenues increased by 48% annually during the 1980s.

DIVERSIFICATION, CRISIS & COMEBACK. In the early 1990s, the TV empire was renamed “Mediaset” and launched commercial TV companies in France, Germany and Spain. The Group was broadened through acquisitions of insurance companies, construction companies, department stores and publishers. Mediaset controlled 40% of Italy’s magazine market. In addition, Berlusconi had bought the traditional football club Milan in the late 1980s, where he was then chairman for 29 years. However, the recession in the early 1990s meant that the heavily indebted Mediaset (400% net gearing) had major problems. The banks forced a change of CEO and after a few tough years, the group was back on track. At the end of the 1990s, Mediaset was valued at over €30 bn (at the 1996 IPO, the valuation was $4bn).

THE PRIME MINISTER. Despite the fall of the Berlin Wall in 1989, Italy’s Communists continued to hold a strong position in the country. Berlusconi saw the Democratic Left Party (formerly the Communist Party) as the biggest threat to himself, his businesses and his country. He felt an almost physical aversion to the militant left, and in order to ward off the Communists, he entered politics in 1993. Only 60 days before the election, he started Forza Italia and through carefully selected efforts – mainly through his media empire – he took home the victory. He attracted voters with charisma, charm and promises of lower taxes. He would then be politically active for the next 20 years.

MIGHTY FRIENDS AND ENEMIES. In the early 2000s, Berlusconi got to know Putin and over the years had to act many times as a mediator between Washington and Moscow. He was also on good terms with Gaddafi (Libya accounted for 20% of Italy’s energy imports and Gaddafi had invested over a billion dollars in Italian companies) but came to blows with Sarkozy when he carried out a hastily decided bombing of Libya in 2011 (an attack that became the beginning of the end for Gaddafi). After that day, Sarkozy and Berlusconi were bitter enemies. Berlusconi’s view was that Libya, like Iraq, could not do without a strong leader. During his years in politics, Berlusconi also collaborated with Clinton, Bush and Obama.      

MOST PROSECUTED ON THE FORBES LIST. Berlusconi has with a net worth of $6.5bn place number 257 on the Forbes list [2019]. He is by far the most prosecuted of the 500 billionaires on the list. The many rounds in the courts have on most occasions been close to bankrupting him, but he has almost always come out as the winner. However, 2013 was the year that was almost got him. His Fininvest was sentenced to pay €494m to arch-rival Carlo De Benedetti. This due to that Fininvest in 1991 had acquired the publishing house Mondadori by bribing a judge. In the same year, Berlusconi was also sentenced to four years in prison for tax offenses. Three years were written off immediately, and since he was over 70 years old, he didn’t have to go to prison but instead had to pay a fine through community service at a nursing home.

More on the topic: My Way – The rise and fall of Silvio Berlusconi

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