Pellicioli’s Overnight Success Was 25 Years in the Making

By Dom Serafini

Pellicioli who? What about Spain’s Antena 3, France’s Marathon, Italy’s Magnolia and the U.K.’s Zodiak TV? That’s who! But let’s make the proper introduction. The 58-year old Lorenzo (Renzo) Pellicioli is CEO of the Novara, Italy-based De Agostini Holdings, a 108-year old privately held multi-billion dollar financial conglomerate.

De Agostini Holdings controls some 40 TV and film companies in 14 countries, including India and Russia, through its own subsidiary, the Milan, Italy-based De Agostini Communications, whose CEO is Paolo Ceretti. Today, De Agostini Communications operates in: content production and distribution with Paris-based Zodiak Entertainment; broadcasting with Madrid-based Antena 3 and film distribution with Milan and Rome-based Mikado Film.

The international TV sector first met Pellicioli briefly in 1984, in Milan, when from an advertising sales management position, he was appointed general manager of Rete 4, the Mondadori Publishing Group-owned TV network.

That same year, Rete 4 was sold to Silvio Berlusconi and Pellicioli disappeared from the international TV industry radar. Pellicioli made a blip on the TV industry radar screen in the year 2000 when, as a manager of De Agostini (where he served since 1997), he attempted to create a third TV pole in Italy, with Tele Monte Carlo (now called La7) to compete with both Berlusconi’s Mediaset and state-owned RAI. Pellicioli abandoned the project in 2001 when Tele Monte Carlo’s majority shareholder, telephone giant Telecom Italia, was sold to Marco Tronchetti Provera, a Berlusconi ally.    

In 2003 Pellicioli’s blip became a bigger dot on the TV radar screen when the Spanish-Italian joint venture Grupo Planeta-De Agostini acquired 44.58 percent of Madrid-based TV network Antena 3. Subsequently, in 2007 and 2008, the blip expanded into a solid circle when De Agostini Holdings — where Pellicioli has served as CEO since 2005 — through its De Agostini Communications, got into a U.S.$400 million international TV shopping spree in Italy, France and the U.K. Under Pellicioli, De Agostini Holdings has morphed into a financial conglomerate with international interests in publishing, gaming, financing, media and communications. But let’s see what Pellicioli had to say.

VideoAge International: You described De Agostini as a “financial conglomerate.” What does this mean?

Lorenzo Pellicioli: It means that De Agostini S.p.A is a holding company that coordinates the activities of the operating companies (De Agostini Editore, De Agostini Communications, Lottomatica and DeA Capital), which are active in different strategic sectors, while also making financial investments. De Agostini Editore is the sub-holding company for the Group’s editorial activities. It operates in 30 countries and publishes in 13 languages. De Agostini Communications is the sub-holding company for the Group’s interests in activities such as content production, broadcasting and the distribution of content for television, new media and cinema. Following its acquisition of [U.S. game technology specialist] Gtech, Lottomatica has become the largest international player in the lottery, games and related services sector. Finally, DeA Capital makes private equity investments and is active in alternative asset management.

VAI: Your companies produce films, TV dramas, reality shows, documentaries, children’s TV programs and licensed formats. How do you expect to create synergy? Is there a coordinating division?

LP: Made up of over 20 successful international companies, Zodiak Entertainment produces more than 5,200 hours of programs each year for television and other media, broadcasts over 200 shows in various countries and has over 300 client channels. The coordination of these companies and the creation of internal synergy are achieved through two main tools: distribution and creativity. These two areas will be managed centrally by Zodiak Entertainment to create synergy. In the first one, in particular, which dates from January of this year, the distribution chain will be centralized to facilitate the offer and sale of our products on a global scale.

VAI: One difference between U.S. companies and European companies is the level of bureaucracy. Even Sky-Italia operates like a post office. Is De Agostini different?

LP: I know both sides of the ocean pretty well, and in my experience I have always found much more bureaucracy in American companies than in European ones. I really think that American corporations have cumbersome procedures that make them unfit to cope with a crisis such as the one we are experiencing. As regards Sky Italia, I think that their excellent results are self-explanatory. I don’t know if De Agostini is different; anyhow De Agostini S.p.A acts as a financial holding company, intervening mainly to define the strategies of the various sectors of activity or to allocate financial resources, to define the level of debt to be respected and to monitor M&A activities. However, it does not interfere in actual business, but rather ensures that the plans and expected results are respected. In particular, as far as our “media content” sector is concerned, we have chosen to apply a “federal government” model: the main role attributed to Zodiak Entertainment will be one of central coordination and control, and of generating creative momentum to encourage the circulation of ideas within the field of the companies operating in the various countries. The latter, on the other hand, will be responsible for individual productions and relations with local broadcasters.

VAI: Your companies are strategically located: Spain (with a view on Latin America), France (Africa, Canada), U.K. (English-speaking countries), Russia (Eastern Europe), etc. Was this part of a precise design or simply a matter of opportunity?

LP: No, it is only the result of our acquisitions. Now we have to rationalize the organization.

VAI: What is missing for you to become a studio?

LP: I am not sure we want to become a studio. We want to remain something quicker and more focused.

VAI: In an interview, you said that, in the past, it was important to have distribution (shelf space was imperative). Today, digital technology makes content more important. Does this mean that you don’t believe in broadband?

LP: In the audiovisual sector, the arrival of digital technology has generated a huge number of platforms and channels, shifting the value from distribution more to product and from network more to programs. Those operating in the media world cannot ignore this trend. Thus, in terms of investment priorities, it is more logical for us to climb to the top of the value chain by concentrating on content rather than distribution. Anyhow, broadband has a great future but we, as content producers, need not to worry about the medium but about the users of that medium.

VAI: What is your view of IPTV?

LP: Let’s wait and see. For the moment I don’t see any convincing business model. We are testing something new, using content based on the “know-how” and “knowledge sharing” that is already available from De Agostini Editore.

VAI: What are your future plans?

LP: Today, with Zodiak Entertainment, we are the only group in Europe with proven strength in all four genres of television production: entertainment, animation, fiction [drama] and documentaries. Zodiak Entertainment’s main objective is to combine organic growth with other acquisitions and to strengthen our position in Great Britain, the United States and emerging markets. With this strategy, we aim, over the next three years, to become one of the main international players in the content market, with a turnover of 800 million to 1,000 million euro and an EBITDA of 130 million to 150 million euro. If we achieve these objectives, we will also be able to list Zodiak Entertainment on the stock exchange.