Wednesday, February 11, 2009

Mediaset, Telecom Italia Media Hurt as News Unions Scupper Cuts

Italian media companies, struggling with the steepest advertising slump in 16 years, will find even tougher times ahead because they aren’t willing to cut journalism jobs to the same extent as their U.S. and U.K. counterparts.

Telecom Italia Media SpA, the money-losing television unit of the country’s biggest phone company, abandoned plans to fire 25 journalists last week. Premier Silvio Berlusconi’s Mediaset SpA and publisher Gruppo Editoriale L’Espresso SpA also have held off on newsroom job cuts. Those decisions reflect the strength of reporters’ unions, said Patrizio Pazzaglia, a money manager at Bank Insinger de Beaufort NV in Rome.

“Media companies see cuts in newsrooms as their last option because they fear clashes with unions and wild-cat strikes,” said Pazzaglia, who doesn’t own media shares. “Firing journalists is considered a taboo also because of the strength of their lobby.”


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