CHAPTER THREE

The Media Mogul

Until we made our move,” says Berlusconi, seated on a plush couch amid the baroque splendor of his drawing room at the Villa San Martino, “there was nothing but state-run television in Italy, like in many other parts of Europe. The channels would shut down at midnight and there was nothing in the morning for housewives to watch. It was pretty boring.”

In 1976, when he first decided to take advantage of Italian Constitutional Court rulings that allowed free-to-air broadcasts by local private commercial TV stations, it was a fairly black-and-white world. Italy was still only a decade into its postwar economic boom and the country was still industrializing. The full introduction of color TV was years away. State television was largely educational; it was pedantic and pedagogic. There was a famous show on RAI called It’s Never Too Late that featured an elementary school teacher named Alberto Manzi who literally taught viewers how to read and write. Many of the workers from the agrarian provinces who streamed into cities to work in factories were still illiterate. So this kind of programming had a social function and helped many Italians who had until now never learned the basic skills of reading and writing. Italy was still a country of workers and their feudal overlords. Euro-communism was on the rise in Italy and across Europe. In Rome, the Kremlin was helping to finance the Italian Communist Party while the CIA operated behind the scenes to prop up the Christian Democrats, as a counterweight to what the Soviets were doing. The country was meanwhile under siege from Red Brigades terrorists, hard-left militants who were like the Baader Meinhof terrorists in Germany or Action Direct in France. The influence of the Roman Catholic Church was also seen in the world of politics, and on a daily basis

The Vatican opposed the idea of legalizing divorce and meddled in the affairs of state as though it were an Italian political party, preaching family values and allying itself with the Christian Democrats. The staid programming of the time reflected the values of a largely family-centered Christian work ethic. Italians might be party animals. They might be flamboyant or colorful. But the political overlords in Rome who controlled the RAI state broadcasting network preferred a shade of institutional gray.

At midnight the state broadcaster ceased programming and channels would sign off to the strains of Rossini’s “William Tell Overture.” Then a pattern containing the RAI test card would appear in a freeze-frame that remained fixed upon the screen all night, accompanied only by occasional static or a single excruciatingly loud tone that reminded sleepy viewers to turn off their TV sets.

The same relatively gray and institutional aesthetics prevailed in much of the rest of European television, except for Britain and Luxembourg, which had already allowed some commercial channels to compete with public television.

In Europe in the late 1970s, television was considered a public utility like water, electricity, or the fixed-line telephone. In Italy, as in France and Germany, it was part of the package of public goods and services controlled by government-owned companies on behalf of the state for its citizens. The state TV channels also served, through the nightly news broadcasts, as a megaphone for the politicians who governed.

In Italy, this mission and mind-set meant that RAI carried almost no advertising. What little there was did not come in the shape of thirty-or sixty-second spots but in a quaint little format. Once a day, at a few minutes before nine o’clock in the evening, Rai Uno, the national flagship channel, would broadcast about twelve minutes of advertising, bundled into a container called “Carousel” and consisting of a handful of two-or three-minute sketches that featured famous actors and singers. These sketches were a primitive form of TV advertising, part celebrity endorsement and part product placement. In one memorable ad for an artichoke-flavored liqueur called Cynar, an actor sits down at a sidewalk table outside a crowded bar. He extols the energy-giving benefits of the drink and then orders his favorite aperitif by name, just once. That was the entire ad.

“The advertising on public television did not increase sales for the advertisers. This was because most of the advertising was really institutional and staid, it just showed the brand once or twice. We used to say that watching those ads was like pissing in your pants,” says a deadpan Berlusconi. “You get a kind of warm sense of well-being, but nobody notices anything.”

Berlusconi has never tried to hide his scorn for the state-run broadcaster.

In 1977, having filled his TV studios at Milano Due with musical contests and quiz shows, he was ready to expand his operations. He bought a local TV frequency, installed an antenna high atop the Pirelli skyscraper in Milan, and he began beaming his TV station to the entire city and out to the suburbs. The channel was now called TeleMilano 58.

Berlusconi’s eldest daughter, Marina Berlusconi, was twelve years old when TeleMilano 58 made its debut in 1978. She remembers watching the very first show that was broadcast on the new channel, which happened to be a Betty Boop cartoon shown at eight o’clock in the evening. She was in the company of her younger brother Pier Silvio, who at the age of nine was known by his nickname of Dudi.

“My brother and I were seated there on the couch together, in the living room downstairs at Arcore,” says Marina. “My father was at a business dinner and so it was just the two of us watching the Betty Boop cartoon. I remember that my father must have called us thirty times. He kept calling us every five minutes to make sure we were sitting on the couch and watching. He wanted to know if the signal was clear, if the broadcast image was good, if the sound was audible. He was really excited. He truly believed he was creating something new and he was very nervous that night.”

Marina also remembers the way her father would do his own market research, mainly by asking the opinions of close family and friends.

“At the beginning of his adventure in television, Silvio Berlusconi did not trust the marketing agencies or market research. He would talk to us about the programming, he would ask his children what they liked, he would consult friends and family, he would ask those who were around him.”

Marina lets slip a chuckle at her next recollection.

“The thing I remember the most,” she says, the chuckle now escalating into a laugh, “is that he must have been the only parent who was actually happy for his children to watch television! When he came home in the evening, around eight p.m., he wanted us to be in front of the television watching. He even persuaded my mother to let us eat dinner in front of the TV. We were his main test audience, and he would ask us which channels we were watching and what programs.”

Like many self-made men who came from nowhere to invent and then dominate entire industries, Berlusconi didn’t trust the system. He ignored the advice of his closest advisers and his experts. He liked to do things his way. And that meant big and splashy.

By 1979 he had lured an American-born celebrity quiz show host with a funny name away from RAI and made him the first big star of his new TV station. This star, a cheerful showman named Mike Bongiorno, began to draw viewers. For the state broadcaster in Rome, this competitive and ambitious Berlusconi up in Milan was starting to be an irritation. In fact it was to be the battle for advertising dollars that would eventually prove decisive in Berlusconi’s attempt to challenge the state and carve out market share for private TV channels. From the beginning Berlusconi proved himself an exceedingly aggressive competitor to RAI.

“With TeleMilano 58 on the air, we began to go after local advertising,” he recalls. “We were very innovative and we pursued clients very differently from the way RAI did. Back in those days you had to have special connections just to be able to buy some airtime, some advertising space on the state channel. Only a handful of companies were allowed to place ads on RAI. And to get into the RAI system you needed contacts, mainly political contacts.”

Berlusconi sits forward on the couch.

“There used to be this colonel who ran the RAI advertising concession, Sipra. His name was Giovanni Fiore. He was the undisputed boss of all advertising. A friend of mine went to see him to buy some advertising space on the nightly Carousel. Fiore told my friend to return in a month. When he went back a month later Fiore told him, ‘I am very sorry, but based on the information we have been able to collect, it seems that you are not a good Catholic.’ My friend asked him what he was talking about. Without batting an eyelash, Fiore told him that according to his informants the businessman in question did not regularly attend mass in church on Sundays. So he waited another month. Then he went back to Fiore again and this time Fiore told him, ‘Yes. I can confirm that you have indeed been attending mass, but it seems you have never taken Communion.’ After that my friend went back to church and took his Communion wafer and finally the colonel at RAI allowed him to buy fifteen ads on Carousel.”

Berlusconi has the look of a man who has made his point as he finishes recounting the story. But he has not finished saying what he really thinks of RAI.

“RAI, like every state broadcaster in Europe,” says Berlusconi, “was considered the private property of the politicians. The only people who had access to television were journalist friends and the cronies of politicians, and businessmen who had a good relationship with the political parties.”

In 1979, with his first commercial TV station already causing a stir in Milan, Berlusconi was buying up a string of stations around Italy. He was not going to play ball inside that system. He was going to change the rules. He was going to do things his way.

“When the court rulings came, Berlusconi had this intuition about challenging the state broadcasting monopoly,” recalls Fedele Confalonieri. “He thought the liberalization of the market represented an extraordinary business opportunity. But to do that back in 1979 you needed to have a lot of courage. That was when Berlusconi decided he was going to try to compete with RAI. He understood that the deregulation meant opportunity at the local level, but this was not enough to achieve critical mass in terms of the business and revenues. So he put together a number of local and regional stations. The law did not permit either live broadcasting or news broadcasts. But it did allow prerecorded shows. So Berlusconi’s challenge was how to attract big advertising revenues if he only had a string of local and regional stations that commanded lower prices.”

The answer was to go for the bigger bucks by offering his advertisers a nationwide demographic instead of just a local market. Berlusconi would unify local stations and simulate the programming of a national TV network.

Using motorbikes, trucks, trains, and on occasion even light aircraft, Berlusconi created the illusion of a national television channel by getting the same master videotapes to each of the local and regional stations in time to synchronize the broadcast of a particular soap opera or other prerecorded show, and eventually the entire broadcast day. This resulted in the impression that up and down the Italian peninsula you were watching a single channel, even though you were actually watching a nationwide simulcast by local stations.

“By prerecording the master tapes and distributing them to the local stations, we created a de facto national network, and we could sell spots to the big advertisers like Coca-Cola,” says Berlusconi. “To get a piece of the big bucks in the national advertising spend, I invented a form of live television that wasn’t really live. It was just taped as live and each station had to transmit the master tape at precisely the same moment so it looked to the viewer at home like it was a live broadcast.”

This taped-as-live and simulcast system allowed Berlusconi to approach advertisers with a value proposition. But the advertising agencies, set in their ways and used to ruling the roost on the media scene, were proving an impediment. They were not buying the Berlusconi plan. So once again he changed the rules of the game. In 1979 he formed a company called Rete Italia and started buying up Italian TV rights to Hollywood blockbuster movies, soap operas, game shows, and sitcoms. He was forming a library of entertainment content that would soon compete against RAI. Then he cut out the agencies by creating his own in-house advertising agency, a company called Publitalia. He went directly to the advertisers and he offered a full package of sexy TV programming and modern spots that he would also produce for the advertisers.

“The agencies were taking big fat fees but they were only throwing us breadcrumbs,” says Berlusconi. “It was the agencies that decided everything. So I decided to turn things upside down. It was pretty tough, fairly slow going at first. It took about three years to really break through. I used to come up with special introductory offers. One of them we called ‘Operation Risk’ in which we took the risk, gave an eighty percent discount to big advertising clients, and promised them their money back if their sales did not increase once they started advertising with us.”

Berlusconi was now offering nationwide coverage that could be measured by national Nielsen audience ratings and other market metrics, and he was offering a one-stop-shopping service to produce and strategically place the spots where they would work best in the program schedule. It was here, in the strategic approach, the nationwide broadcast coverage, and in the new style of content, that he revolutionized the market. Gone were the old-fashioned black-and-white sketches and routines with actors endorsing products. In their place were Madison Avenue–style spots of the sort one would see on American television, punchy, in-your-face, and full of pretty women and lots of razzamatazz. Berlusconi made sexy and compelling advertising, he bundled it together with the biggest consumer brands on the market, and the Italians loved it.

Berlusconi knew what he was doing. The former cruise ship crooner turned real estate tycoon turned out to be a natural impresario in the world of show business and television. He had his finger on the pulse of the national taste, even if some of these tastes were more base than tasteful. In 1979 he recruited more of his former schoolmates and some of the veterans of the Milano Due project, and sent them to Hollywood to begin buying up movie rights. He began challenging RAI for the rights to live soccer matches. He even managed to outbid RAI for the Italian rights to the hit TV show Dallas, and he got Coca-Cola to become a key sponsor. He added soaps like Dynasty and Beautiful, and fashioned a lavish Saturday night variety show that featured scantily clad chorus girls and working-class humor. It was working.

In 1979, now armed with a string of regional TV stations, he registered a new trademark that would eventually prove his most valuable property: a television channel called Canale 5, or Channel 5. Pretty soon the master videotapes that were being shuttled around Italy with the latest hit TV episode also carried a little logo in the corner of the screen with the Canale 5 brand. The logo, which would become the general logo of all of Berlusconi’s future ventures, took its inspiration from the eleventh-century family coat of arms of the aristocratic Visconti family of Milan. It featured a serpent eating a flower. It was already the symbol of Milan, with a version in use even on the grill of new Alfa Romeo cars. Now the serpent would become the symbol of Berlusconi’s growing media empire.

In the late 1970s Berlusconi bundled his television interests into a new family holding company named Fininvest. But his closest collaborators remained the same. Fedele Confalonieri, whom he had met at Salesian College at the age of thirteen, was always at his side. Marcello Dell’Utri, from university days, was put in charge of the new in-house Publitalia ’80 advertising agency that came after Rete Italia. But there was one man who made Berlusconi’s dream of a national TV network into a reality. Today this man is better known in the world of soccer as the long-serving boss of the AC Milan soccer club. At the time he was a small entrepreneur from the Brianza farming region of Lombardy, a businessman who specialized in supplying equipment for broadcasters and in building and maintaining transmitters and repeaters for TV channels. His main client was a little broadcaster based in the principality of Monaco that was called TeleMontecarlo. The man who transformed Berlusconi’s dream into a reality was Adriano Galliani.

“My first meeting with Galliani was in November 1979,” recalls Berlusconi. “He had a company called Elettronica Industriale and they were specialized in this kind of work. He came to pitch me his technical services. I guess we found each other very simpatico. We had really good chemistry. Adriano Galliani was a real Brianza businessman, an extraordinary and very talented fellow. So we found ourselves in perfect synch.”

Galliani, a jovial and bald-headed man in a natty blue suit and yellow tie, remembers that first meeting with Berlusconi on the afternoon of Thursday, November 1, 1979. It was All Saints’ Day, a cool autumn day darkened by thick banks of low-hanging fog that surrounded the driveway leading to the Villa San Martino at Arcore.

“It is a day that is etched permanently on my memory,” says Galliani. “I was supplying some high-voltage equipment for the TeleMilano broadcasts and one day I was invited by Berlusconi to come to see him at his villa at Arcore. I had read about him, and he was a client, but I had never met him before. I didn’t know what he wanted. Fedele Confalonieri was also there. We were in the Room of Couches at Arcore. I had flown in to Milan from Tokyo the night before, where I had been attending an electronics convention, and so I was pretty jet-lagged. Berlusconi sat me down and he asked me flat out if I was capable of building him a broadcast transmission system for three national TV channels. His reasoning was that since RAI had three channels and he wanted to compete against RAI, he would also need to mount a challenge with the same dimension. I told Berlusconi that I could do it, and he immediately said that he wanted to buy fifty percent of my company. He told me to name my price and he would pay it. I looked at him for a minute and then I just said the figure of one billion lire. He said ‘Fine!’ It was done. Then we shook hands and I left the villa and that is how my adventure started. And soon after that we built Canale 5 as the first nationwide commercial TV channel.”

Galliani did not actually build three new channels from scratch; Berlusconi would buy two others and then Galliani would grow them. But he was the key man on Berlusconi’s team who helped create a national network. In 1982 Berlusconi managed to buy a second channel, Italia 1, from the Rusconi group, a struggling magazine publisher in Milan. He began applying the Berlusconi touch. Next came the purchase of a channel named Rete 4, this time also for a song because the legendary Mondadori book publishing empire needed cash and could not afford to compete with Berlusconi’s bells-and-whistles extravaganzas on Canale 5. The stuffy publishing elite of Milan knew how to publish best-selling books but they had no idea how to run a commercial TV channel.

By the autumn of 1984, less than five years after his first meeting with Galliani, Silvio Berlusconi had achieved his goal. He was the proud owner of three national television channels, just as many as RAI. Canale 5 was the flagship, but the garish mix of sitcoms, showgirls, and soaps was proving a winning formula. Italia 1 and Rete 4 were also garnering market share.

In 1980 Berlusconi’s had a 13 percent share of the Italian national audience, and state broadcaster RAI had more than 80 percent. Two years later RAI’s audience share had slipped to 63 percent. By 1984 Berlusconi could boast not only nationwide coverage but an audience share almost equal to RAI’s. Advertising revenues at Publitalia were soaring. The advertising arm of the Berlusconi empire racked up an average revenue growth of 48 percent a year throughout the 1980s. Revenues soared from $6 million in 1980 to $455 million by 1984. They would double again within the space of four years.

In Italy, as in America, Britain, and much of Western Europe, the mid-1980s was a period of newfound prosperity, of rising consumerism, fueled by the dreams that were advertised in TV spots. Berlusconi was selling an alternative lifestyle, of Dallas and pretty girls, of glitz and kitsch. He made a fortune as consumer advertising exploded alongside the “me generation,” creating an army of newly rich yuppie consumers who would watch Canale 5 and Italia 1 and Rete 4. Just as London Weekend Television and ITV had challenged the primacy of the BBC in Britain, Berlusconi was offering a colorful alternative to state television in Italy.

By 1984 Berlusconi was an influential and significant player on the national scene. He was still an outsider, still a maverick, but he was becoming powerful. He was challenging the state broadcasting monopoly and he was conquering market share with a network of regional stations, despite the fact that they still could not broadcast live or offer news programs. From a strictly legal point of view, Berlusconi was not breaking the law, but he was getting around the law that placed in RAI the sole national broadcasting authority.

Culturally, he was splashing the new color television screens with huge gobs of pastel and Technicolor. The American-style commercial TV, adaptations of game shows such as Wheel of Fortune (hosted by the American Mike Bongiorno), and Hollywood films filled a tremendous void for an Italian public hungry for entertainment. Berlusconi’s television was pure escapism, though all of this earned him the wrath of fashionable intellectuals and the guardians of radical-chic culture.

Confalonieri acknowledges that some of the early programming was garish, but he says it was radical for a time when everything else had been so dull.

“You have to understand the context, the way things were back then,” says Confalonieri. “By the 1980s Italy had been living through years of recession and austerity and Red Brigades terrorism and the strong and continuing influence of the Italian Communist Party on society. In that context it was pretty revolutionary for Silvio Berlusconi to launch his commercial TV challenge against RAI. He was going against the prevailing culture and mind-set of the Italian establishment. He was offering an alternative lifestyle. That, in itself, was a political act.”

Confalonieri traces the start of Berlusconi’s political career to this moment, when his flamboyant and shamelessly commercial television began to really take hold in Italy, posing a challenge to the keepers of the traditional Christian Democrat mind-set.

“Berlusconi launched a television that exalted consumerism. It was full of flashy advertising spots. It was feel-good television. It was optimistic. It was pro-American. It was that great and energetic American kind of optimism. It was the exact opposite of the austere mind-set of the time, with all due respect to Communists and Catholics. So the real political revolution, not just cultural but political, began with television.”

Despite Confalonieri’s perspective on the revolution that Berlusconi unleashed, for the snobbish Italian business and financial establishment in Milan, Berlusconi was still a nouveau riche, an arriviste, an outsider. He might have become a billionaire media mogul, but he had not been born to riches. To the older families of cozy Milan society he was the object of derision and scorn. He was considered crass and inelegant.

Berlusconi did, however, have exceptionally good relations with at least one man in the Italian establishment who truly counted. In 1984 he was on highly familiar terms with the newly installed prime minister of Italy, a lanky Socialist named Bettino Craxi.

The new prime minister, broad-shouldered, stubborn, bespectacled, and bald, was a dear friend of Berlusconi’s. He was a forceful man who presided over a complicated and rancorous five-party coalition government that was known as the Pentapartito. But Craxi was a pro-business Socialist, a full decade before the emergence of Tony Blair in Britain.

The two men had been friends for some time and Berlusconi was considered something of a sponsor or business supporter of Craxi. In fact, one could say there were exceedingly close ties between the Craxi and Berlusconi families. In the summer of 1984, Prime Minister Craxi became the godfather of Berlusconi’s daughter Barbara, who was born out of wedlock in Switzerland to Berlusconi’s mistress, an actress named Veronica Lario. When Berlusconi eventually divorced his first wife and married Veronica, it was Craxi’s brother-in-law, Paolo Pillitteri, the long-serving mayor of Milan, who presided at the wedding in Milan’s City Hall. Berlusconi’s best man was Bettino Craxi and Veronica Lario’s maid of honor was Craxi’s wife, Anna.

Craxi had taken office as prime minister a year before in 1983, and was already encountering the wrath of the Communists because he seemed willing to open the state-centric Italian economy to more private-sector competition. Berlusconi by now of course owned substantial interests that could be affected by government regulations and broadcast laws. As it turned out, his friendship with Craxi would prove decisive in protecting and nurturing these interests.

Berlusconi needed the help. In addition to being derided by Italian intellectuals as a purveyor of garish American sitcoms and soaps, he had an array of politicians and intellectuals against him, and he was despised by the state broadcaster and by competing newspaper publishers who feared he would drain away too much of their advertising revenue. Even worse, his foes were arguing that by effectively broadcasting on a nationwide level, he was breaking the laws that gave this privilege solely to RAI, the state broadcaster.

“There was great resentment in RAI and in the world of Italian politics. There was lots of hostility toward me,” recalls Berlusconi. “I remember in the early 1980s having this terrible phone conversation once with the head of RAI, a man named Willy De Luca. He was furious that we were making inroads, taking audience share away from RAI. He told me I was crazy, that the politicians would destroy me. He even threatened me. ‘Any day now,’ he told me, ‘the tax inspectors will come and get you.’ I remember putting down the phone after that and my knees were shaking.”

In Italy it is not unusual for investigating magistrates and prosecutors to coordinate their actions against a political foe or a judicial target. In the space of three days in October 1984, with Berlusconi clearly in their sights, magistrates in Rome, Turin, and Pescara ordered the blackout of his three TV channels. They cited illegal nationwide broadcasting as the reason. The move was a coordinated attack, and Berlusconi remembers it very well because it almost put him out of business.

“It was the start of a long war, with no holds barred,” says an indignant Berlusconi. “The judiciary decided to move against me in 1984 by ordering the sequester of our broadcast transmitters. They shut us down because RAI filed a complaint, saying that our channels violated an article in the Constitution that gave public television the monopoly for nationwide broadcasting.”

The ensuing legal and political battle pitted RAI, backed by the old warlords of Italy’s Christian Democratic and Communist parties, against Berlusconi. Craxi, the Socialist prime minister who relied on the Christian Democrats to support his government coalition, was immediately dragged into the fray. Berlusconi asked for his help, and he got it. Within four days of the shutdown, Craxi had signed an emergency decree ordering that the broadcasting be resumed. This first decree became instantly known as the “Berlusconi Decree.” It was highly controversial.

Perhaps the most surprising aspect of the judicial saga that autumn was not the blackout ordered by the magistrates itself but the popular protests that it triggered across Italy. Berlusconi’s 1980s dream world of aspirational kitsch had struck home with a nation, with millions of families, and especially with mothers and their children. And they were angry. For one thing, the much loved and favorite program of many schoolchildren, The Smurfs, had been taken off the air. Gone were Dallas, and Dynasty, and Wheel of Fortune. Viewers were suddenly deprived of Richard Chamberlain in the miniseries The Thorn Birds and Robert Mitchum in The Winds of War. Italy was in an uproar. In an age well before Facebook and Twitter, Italians would express their anger by flooding the switchboards of newspapers with thousands of telephone calls. The true impact of Berlusconi’s media power was clear when he ordered his TV channels to fill the screen with a card that contained the phone numbers of the offices of the magistrates in Turin, Rome, and Pescara, the number of the main switchboard at the Rome headquarters of RAI, and even the number of the prime minister’s office. The viewers hit all of these numbers with a barrage of calls. Berlusconi’s loyal viewing public was now in a fever, telephoning their protests across the nation. He had understood what the masses wanted. He had given them bread and circuses. And now they wanted it back.

“We were teetering on the brink of disaster when they shut us down,” recalls Berlusconi. “But then the public rebelled. There were children protesting in the streets, carrying placards that read ‘Give Us Back The Smurfs!’ We had entered into the lives of the ordinary people and we had become part of the family life of millions of Italians. When we started our channels, the state broadcaster only showed programs in the evening. We were the first to broadcast shows in the morning, in the early afternoon, late at night. So we began to have a profound impact on the habits of the Italians, especially on the housewives who were at home and for the first time enjoyed the comfort of watching TV during the morning and daytime. But our biggest supporters were the companies that advertised on our channels, and the business associations. They put a lot of pressure on the politicians to reverse the ban, and they told Craxi and the others that without the ability to advertise on commercial television their sales and production would be affected. This was perhaps the strongest argument in our favor.”

Craxi’s decree putting Berlusconi’s TV channels back on the air was so controversial that it was declared unconstitutional when he tried to get it approved in parliament a few weeks later, in November 1984. Craxi did not give up. He presented a second “Berlusconi Decree,” which was eventually approved in February 1985. But this law expired at the end of the year, so Craxi had to introduce in June 1985 a third “Berlusconi Decree.” This one would finally be signed into law, but only on condition that it eventually be replaced by full and proper legislation governing the regulation of television broadcasting and advertising in Italy. That would take a further five years, until 1990, and even then it was considered so controversial that five ministers of the government of the day resigned in protest, among them the current president of Italy, Sergio Mattarella, who at the time was minister of education. The entire left wing of Prime Minister Giulio Andreotti’s governing Christian Democratic Party stormed out of the government in protest at the legalization of Berlusconi’s private TV empire. But Craxi, no longer prime minister in 1990 but still the powerful leader of the Socialists, who were part of the ruling coalition government, had maintained his steadfast support.

There is no doubt that Craxi played a crucial role in saving and legalizing Berlusconi’s television empire. Friendship has its benefits.

“I would say that yes, my friendship with Craxi helped, and played a part in his decision,” says Berlusconi. “But I had also explained to Craxi in great detail how commercial television was fundamental for the economy, and that there was nothing for the political world to fear from commercial TV channels which were not even allowed to do news broadcasts. I was certainly grateful to Craxi for what he did, but I would also say that he had enough backing from his coalition partners to act.”

Not everyone thought that Craxi signed this string of decree laws simply out of friendship for Berlusconi or because he was a more modern and pro-business Socialist. Berlusconi faced allegations that he had bribed Craxi, that he had paid him with slush funds and transferred money into offshore bank accounts. Italian magistrates opened investigations, they brought charges, and they alleged that Berlusconi-controlled companies had paid the equivalent of about $15 million into Craxi-controlled offshore bank accounts. Craxi and Berlusconi would be charged and convicted of illicit financing of political parties, but ultimately the guilty sentence would be canceled when the statute of limitations expired. Berlusconi repeatedly denied all the charges, claiming they were only a “theorem” devised by left-wing magistrates.

“I never engaged in this kind of relationship with any politician,” Berlusconi declares gravely.

Craxi would face a galaxy of corruption charges before he was convicted in absentia and died in exile at his vacation home in Tunisia.

“As for Craxi, who was accused of having made money out of political career, this is a man who left his wife and family in absolute poverty when he died. He left his wife destitute, with a mortgage to pay on the house in Tunisia and a mortgage to pay on his apartment in Milan. And believe me, I know all too well… because…” Here Berlusconi stops for a moment as though he is trying to decide how much more to add. Then he his eyes close for a nanosecond as he assumes a priestly face of piety.

“Let us say,” adds Berlusconi in a very quiet voice, “that somebody intervened to help sustain the Craxi family, who were by then without any other financial means.”

Berlusconi maintains his aplomb and seems to stare out at something in space as he continues his recollection.

“I remember on one occasion that Craxi spoke to me about the way his party was struggling financially, and I told him that I was there for him if he needed something. He sort of froze up and stared me in the eye and he said: ‘You are my friend. Don’t ever make such a proposal to me again or it will destroy our friendship.’ That was the real Bettino Craxi. That was the much reviled Bettino Craxi. Sure, as he himself admitted in front of parliament, he needed money to finance his Socialist party. Just like the Christian Democrats needed money. And the other parties. They were all facing powerful competition from the Italian Communist Party, which was very well funded by Moscow. When they finally opened the KGB files it was clear that sixty-three percent of all the Soviet Union’s funding of parties in Europe had gone to the Italian Communist Party. The other parties were struggling, and so they naturally looked to the private sector for help.”

In the 1980s, the financing of political parties by private lobbies and business interests, whether through offshore bank accounts or by way of a cash-stuffed envelope, was considered to be a quite normal practice in Italy. When new laws were promulgated a few years later to tighten up on the financing of political parties, the Bribesville (Tangentopoli) scandals that erupted would sweep away half of Italy’s political class. It was amidst the hurly-burly of the Tangentopoli scandals, as the magistrates unleashed a revolutionary attack on all the major political parties of the day, that Berlusconi started to nurture the idea of taking a stab at politics himself. But for now he was happy to be a man in full. He had morphed from being a real estate developer into a billionaire media mogul. His ties with Craxi and all the other politicians? It came with the territory.

To his critics, Berlusconi was now a much despised merchandiser of trash, the man who had killed Italian cinema with his commercial television, and the man who had only managed to keep his media empire together thanks to political help from Prime Minister Bettino Craxi. To his fans he was an innovator, an impresario, and a marketing genius with perfect intuitions and an unusual empathy for the common man. He was selling an aspirational lifestyle; he was giving pure, brazen, and escapist entertainment to a famished Italian public. He was selling dreams.

Or, as he once told a friend back in the 1980s, “I sell smoke.”

From the beginning, Berlusconi had understood the ingredients that made for big-time television entertainment in Italy. Movies, soaps, variety shows… and sports. He bought soccer rights, lots and lots and lots of soccer rights. The soccer-crazy Italian public was grateful. RAI was as furious as ever. Berlusconi was constantly outbidding them for match rights. It was therefore not surprising that once he had legalized his commercial TV empire of three national channels, Berlusconi would start thinking about buying a soccer club. He could see the match between sports and broadcasting. And what better soccer club than AC Milan, the team that he had adored as a small boy in the stadium with his father.

Being Berlusconi, you don’t just buy the soccer rights.

You buy the soccer team.