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By Giulia Segreti
MILAN, Jan 18 (Reuters) - Italy's Mediaset is ready to scale down pay-TV and stop broadcasting soccer if it becomes too costly, the company told analysts on Wednesday, expanding on its strategy rethink after a sale to French media group Vivendi fell through.
Vivendi had pulled out of the proposed deal for Mediaset's Premium pay-TV operation in July, saying its business plan was unrealistic, and relations worsened with the French group's stake-building last month to become Mediaset's second-largest shareholder.
Mediaset, controlled by former prime minister Silvio Berlusconi, had said on Tuesday that a revised strategy for its pay-TV arm would deliver more than twice the consensus market forecast of about 200 million euros ($213 million) in operating profit for its Italian business by 2020.
The company fleshed out the plan on Wednesday and three analysts who attended the London presentation told Reuters that Mediaset said its forecasts could be achieved mainly by cutting costs linked to broadcasting Champions League and Italian soccer matches by 800 million euros.
"This would mean the pay-TV business is scaled down by 90 per cent, to just 60-80 million euros in revenues ... the most likely scenario is that Mediaset retains some soccer but at a much lower cost," Charles Bedouelle, media analyst at Exane BNP Paribas, said in a note.
A second analyst said the company now contemplated Premium as a much smaller business and was not prepared to spend too much on soccer.
The pay-TV unit, which lost 100 million euros in the first six months of 2016, has about 2 million subscribers, mainly drawn to its sports channels. However, it has failed to add enough new customers to offset the 700 million euros it is estimated to have spent on its Champions League broadcasting rights deal.
Analysts say it would need at least another 500,000 subscribers to break even.
On Tuesday Mediaset said it would bid again for the rights to both Champions League and Serie A, the top flight of Italian soccer, this year but would do so with an "opportunistic approach" to ensure the sustainability of its business.
The group also said it aimed to make its pay-TV channels -- currently exclusive to its subscribers -- and content available to other market players. ($1 = 0.9379 euros)
Additional reporting by Claudia Cristoferi and Giancarlo Navach in Milan; Editing by David Goodman