TheChek News Flow

The EU needs the courage to imagine a different digital economy

Trump’s tech oligarchs are afraid of Europe’s regulatory power — as they should be

In the turmoil unleashed by Donald Trump’s return to power, Europeans should not lose sight of one striking feature of the tech oligarchs surrounding him: their naked demand that he gets the EU off their backs. However flattering — unlike many Europeans, they see the EU as a force to reckon with — this is also dangerous. Europe worries about being uncompetitive; it should worry about being subordinated.

The task for all Europeans as they gather at the Paris artificial intelligence summit this week, and in their approach to the digital economy in general, is not to bring a knife to a gunfight. Two instincts that come naturally to European politicians should be avoided: a desire to avoid an economic war with the US as much as possible, in the vain hope of staying close to the status quo ante; and a desire to have what the US has, attempting to copy the particulars of its digital success rather than build what is best for Europe.

Doing the latter requires the courage to imagine a different digital economy than the one now on offer, and the resolve to do what it takes to achieve it.

In Davos last month, Spain’s Prime Minister Pedro Sánchez set an example when he accused social media companies of concentrating power and wealth in the hands of a few “at the expense of our social cohesion, our mental health and our democracies”. Call it Europe’s fentanyl: a social, health and civic crisis that must be addressed.

It is also a security crisis. Elon Musk has built businesses in satellite communication, connected cars, social media, payments, neural-to-digital interface technology and artificial intelligence. Don’t ignore this very specific choice of sectors. Ask instead what could go wrong when they are all controlled by a person willing to intervene heavily in national politics.

Sánchez wants the EU to do three things: require platforms to match every user account to an official ID (without losing public pseudonymity), open up their feed algorithms to check they aren’t breaking the law and hold executives personally accountable for breaches. This is the approach — using the law to stop harmful digital behaviour, once upon a time just called “governing” — that Europe pioneered with privacy legislation and its later big laws on digital markets, digital services and AI. It has abruptly fallen out of fashion.

Unfashionable does not mean misguided. As the legal scholar Anu Bradford points out in a recent article, Europe’s innovation lag has more to do with market fragmentation, lack of risk capital and rigid labour rules than with how it regulates the products themselves. That is why the European Commission’s belated embrace of a “28th regime” of easy-to-navigate corporate, bankruptcy and labour law for innovative businesses anywhere in the EU can be a game-changer, if done right. 

Of course, regulation can impose costs. But as important is that it influences the kind of technology that is developed. New Oxford university research shows that European privacy rules tilted AI research towards data-saving techniques and away from the data-intensive deep learning.

Until a few weeks ago, that would have looked like dooming Europe to lose the AI race. DeepSeek might have changed things. The bigger point is that there is not just one technology on offer. The same researchers suggest that European tech overcame the initial cost of privacy regulation precisely by evolving more privacy-compliant technologies.

But to achieve a digital economy to their liking, European leaders need to do two more things. First, brace themselves for the consequences as Big Tech plays tough. This can range from punitive action from the Trump administration to withdrawing services. But, as recently demonstrated by Brazil (with X) and indeed the US itself (with TikTok), governments can actually shut down social media without the sky falling in. The EU may want to prepare itself for life without some of the most problematic services, just in case.

Second, acquire the means to thrive without them. A forthcoming report led by Francesca Bria for Bertelsmann Stiftung is set to advocate a “EuroStack” — a comprehensive European alternative for all layers in the internet’s technological “stack”, from the raw materials and physical infrastructure to the cloud and software running the internet of things.

This requires fixing the shortcomings that hold back investments in European tech at the moment, as well as regulatory change. But, above all, it requires a consensus that another digital world is possible: not just a copy, but an alternative to the current “stack” run by oligarchs around a US president who does not wish Europe well.

Computer-generated voice of Guido Crosetto persuaded at least one victim to pay €1mn for hostage ransom

Italy’s business elite has been roiled by a scam that used an artificial intelligence-generated voice mimicking Italian defence minister Guido Crosetto to ask tycoons to wire millions to overseas bank accounts to help pay ransoms to free Italian journalists kidnapped overseas.

The scam targeted some of Italy’s most powerful business barons, including Pirelli chair Marco Tronchetti Provera, fashion designer Giorgio Armani, Prada co-founder Patrizio Bertelli, Tod’s owner Diego Della Valle, former Inter Milan owner Massimo Moratti and members of the billionaire Beretta and Menarini families, a person with knowledge of the investigation said.

While many were immediately suspicious, at least one was persuaded to transfer €1mn to overseas bank accounts, after being falsely reassured that he would be reimbursed by the Bank of Italy later for the payment. So far, three Milanese businesspeople have filed formal complaints to the city’s prosecutor’s office, including one who fell victim to the scam.

Authorities familiar with the case say the fraud involved multiple rounds of calls from people posing as Crosetto’s staff and the apparent use of AI to convincingly simulate Crosetto’s voice. Targets were told that Prime Minister Giorgia Meloni’s government needed their help to rescue Italian journalists kidnapped in the Middle East. 

“The voice of the minister was reproduced,” a defence ministry official said. “It was asking for money to pay ransom for Italian journalists kidnapped in the world. The fake Crosetto said, ‘I cannot pay with ministry money, but you will get the money back from the Bank of Italy’. It was a hoax. It was not true.”

Investigators said the calls appeared to come from telephone numbers belonging to the defence minister’s staff — which they believed had been cloned.

The scammers moved just weeks after Meloni’s government negotiated a high-profile hostage swap in which a young Italian journalist, Cecilia Sala, was freed from Tehran’s notorious Evin Prison, in exchange for Rome returning an Iranian engineer wanted in the US for a scheme that provided sophisticated US drone technology to Iran’s Revolutionary Guards.

Crosetto first sounded the alarm of “a serious ongoing scam” in a social media post last week, saying he wanted to raise public awareness so that “no one runs the risk of falling into the trap”.

The minister said he first discovered the fraud after being contacted by a prominent entrepreneur whom he had not previously met and who had transferred a large sum to a bank account detailed by a fake “General Giovanni Montalbano” after speaking to someone that the businessman was convinced was Crosetto himself. 

Crosetto said he later received calls from several other top entrepreneurs that had been contacted by people purporting to be members of his staff trying to organise the rescue of Italian journalists in the Middle East.

The Bank of Italy on Friday warned that fraudsters were improperly using its name and logo to promise that the central bank would reimburse money that wealthy entrepreneurs invested as contributions to the fake rescue scheme. 

“Banca d’Italia is in no way related to any of these requests,” the statement said, as it warned people not to respond and report such overtures to relevant authorities.

Italy’s business elite are not the first to be targeted by scams preying on wealthy individuals eager to do discreet favours for a government seeking to rescue hostages.

A decade ago in France, more than 150 corporate chiefs, heads of state, ambassadors and religious leaders were contacted in an audacious scam when a man claiming to be then French defence minister Jean-Yves Le Drian requested millions of euros for top-secret government operations, including freeing French journalists held hostage in Syria. 

Though most sensed something awry, the scammers managed to collect $85mn, including nearly $20mn from the late Aga Khan, leader of the world’s Ismaili Muslims. The ringleader Gilbert Chikli, a Franco-Israeli, was convicted on multiple counts of fraud in 2020 and sentenced to 11 years in prison.

Price hikes have moved the Happiest Place on Earth out of reach for many Americans, alienating parkgoers and worrying executives

Yvonne Kindell spent years contemplating a trip to Walt Disney DIS -1.10%decrease; red down pointing triangle World. This November, she finally got a chance to take her family of four.

The trip left Kindell, a bank compliance officer from Bear, Del., with sticker shock—especially after recent price increases. Two days of park tickets ran to $1,123. Passes that let them skip the line on popular rides: $208. A meal with costumed characters, including Donald and Daisy Duck: $219. Two Mickey Mouse bubble wands: $60.68.

“It was really stressful for me thinking all the time about how much we were spending,” Kindell said—even though she and her husband, a driver at a warehouse, weren’t paying for it all themselves. Her parents covered the cost of lodging and airplane tickets for her children, aged 10 and 4. Her total came to $3,000.

She’s not planning to go back.

The Happiest Place on Earth has long felt like one of the most expensive spots on the planet for many Americans—but the allure of a magical family vacation kept visitors streaming in. Then, as postpandemic demand soared, Disney put price hikes into overdrive, putting vacations at its theme parks out of reach for many American families. Attendance growth has slowed over the past few years, and even some families that were once regulars are canceling their pilgrimages.

One-day adult passes to Disneyland broke the $200 mark for the first time in October. It now costs $206 on the most popular days at the theme park, more than $100 more than the price of admission on the lowest-cost day.

Five years ago, the skip-the-line feature FastPass was free. Now visitors choose from three different tiers of Lightning Lane passes for the privilege—the most expensive reaching $449 a person a day. Doing without Lightning Lane can mean spending an hour or more waiting in line for the most popular rides, eating up visitors’ vacation time.

Some inside Disney worry that the company has become addicted to price hikes and has reached the limits of what middle-class Americans can afford, according to people who have worked on park pricing. Internal discussions over whether Disney parks may be losing their grip on the hearts and wallets of families with young kids have become more frequent, some of those people said.

Starting in late 2023, the company’s own surveys of Walt Disney World and Disneyland guests found that the number of them planning return trips had ticked sharply down. Disney’s domestic parks attendance increased 1% in the fiscal year ending in September, down from the prior year’s 6% growth. Per-person spending on tickets, food and merchandise at domestic parks increased 3% in each of the company’s past two fiscal years and rose 4% in the quarter ending in December.

The division that includes Disney’s theme parks, known as Experiences, has grown in financial importance in recent years. It represented 70% of Disney’s overall operating income in the 2023 fiscal year, up from 41% in 2019 and 34.5% in 2018.

The unit’s income of $3.1 billion for the final three months of 2024 was flat year-over-year. At the U.S. theme parks, attendance declined 2%, and operating income fell 5% year-over-year, in part because of the impact of hurricane closures on Walt Disney World.

For a two-parent family with two young kids, a typical four-day visit to Walt Disney World, including a stay at a value-priced, Disney-owned hotel, cost $4,266 in 2024, according to Touring Plans, a data provider that helps vacationers plan theme park visits. That cost, before food and transportation costs, is up from $3,230 five years earlier, adjusted for inflation.

Nearly 80% of the increase came from new costs for services and add-ons that were once free, such as line-skipping features, while the remaining rise came from Disney raising prices for parks passes faster than the U.S. rate of inflation, Touring Plans data show.

Disney said that the Touring Plans numbers for the cost of a typical four-day visit were exaggerated and didn’t take into account the range of value options available. A four-day trip for a family of four in the fall could cost as little as $3,026 before food and transportation costs, the company said, and guests don’t need Lighting Lane passes to have a great time.

Hugh Johnston, Disney’s chief financial officer, said at a December investor conference that the company has tried to hold prices steady for lower-priced offerings at the parks and that most of the price increases were concentrated among premium packages or during high-demand dates. The company has to be “smart about pricing,” he said, especially at the lower end of the market.

“We want to be able to tap in to those families and build the habit of coming to Disneyland or Disney World, not one time, but multiple times,” Johnston said.

Tourism experts and some Disney executives say the company risks alienating future customers and pricing out young families.

“Disney has really started to eat its own seed corn,” said Touring Plans Founder Len Testa.

Out of reach

Prices have come a long way since Walt Disney originally envisioned the parks as affordable playgrounds for families, where visitors could imagine themselves entering the dreamlike world of Disney’s animated movies.

Continual price increases have been core to Disney’s parks strategy for decades and have long prompted internal debate. Chief Executive Michael Eisner, who ran Disney for 20 years starting in 1984, more than tripled the price of Disneyland admission during his tenure to about $60, but also presided over a massive expansion of the parks business and the construction of new hotels.

When Eisner tried to raise the price of parking early on from $1 a day (about $3.04 in today’s dollars), he met stiff resistance from some board members, who argued that it was counter to Walt Disney’s vision.

Parking now costs $30 a day or more at the parks.

Multiday trips to Walt Disney World—especially those including nights at a Disney-owned hotel—have fallen out of reach for many Americans, according to an analysis prepared for The Wall Street Journal by Touring Plans.

Disney said that its theme parks are within financial reach for middle-class families and that it offers a range of price offerings for different products, as well as year-round promotions, to keep it that way. It adjusts prices to manage attendance and is itself contending with the growing cost of operating the parks due to inflation.

The majority of respondents to guest surveys at Walt Disney World say it offers a good to great value for the price paid, Disney said.

“The number-one thing we hear from the millions of guests who visit our parks each year is how much a Disney vacation means to them, and we intentionally offer a wide variety of ticket, hotel and dining options to welcome as many families as possible, whatever their budget,” said Josh D’Amaro, chairman of Disney’s Experiences division, which includes the parks, in a written statement. “We also know that in inflationary times it’s especially important to give families ways to save on their visits.”

For many visitors, a trip still represents a quintessential American vacation that’s well worth the cost, even if it keeps rising. For these superfans, there’s no substitute for riding classic roller coasters like Space Mountain or posing for family photos with beloved characters from the Marvel, Pixar and Star Wars franchises.

Doug Damoth, who lives in Brooklyn and works in facilities management for a university, started taking his daughter to Walt Disney World when she was 2 years old, in 1992. Now, he and his wife, who grew up watching classic-era Disney films in the 1960s, take their 7-year-old grandson about every other year.

“It’s this connection to the old world,” Damoth said. “You have fun and you don’t have to worry about anything.”

Disney’s rivals, including Universal Studios and smaller theme park operators like Cedar Fair and SeaWorld, have also raised ticket prices to capitalize on postpandemic demand. For Disney, “there’s concern that maybe they’ve pushed it as far as they can,” said Doug Creutz, who covers the company for the investment bank TD Cowen.

Dan McCarty used to take his family of four to Walt Disney World at least once a year, but since the pandemic has opted for European trips instead. Last year they sold their membership in Disney Vacation Club, a timeshare program at Disney resorts, and spent three weeks sightseeing in the Netherlands.

“The cost value is just out of order and not worth it,” said McCarty, a software engineer from central North Carolina.

New add-ons

When Bob Iger took over as CEO in 2005, he continued Eisner’s investments in theme park expansion. U.S. ticket prices rose, usually in line with inflation, according to Disney parks executives and analysts.

During the pandemic, Iger’s successor, CEO Bob Chapek, set in motion a strategy to capitalize on parks demand once the restrictions eased.

Chapek and D’Amaro, the Experiences chairman, introduced an online reservation system that limited the number of days annual passholders could visit, favoring guests who spent more on daily tickets and merchandise.

Disney eliminated some perks that used to be gratis, like the Magical Express airport shuttle and the FastPass ride-scheduling system. It said only about a third of hotel guests were using the airport service when it was canceled.

The company started selling new add-ons, including one called Genie+, the original name of the paid line-skipping service now known as Lightning Lane Multi Pass. A Disney spreadsheet exposed in a hack of its internal Slack communication system this summer indicated that the Genie+ passes generated more than $724 million in pretax revenue between October 2021 and June 2024 at Walt Disney World alone.

Chapek was pilloried online for what the Disney faithful viewed as nickel-and-diming. Still, fans kept coming and the parks division set quarterly earnings records for income and revenue.

By the time Iger returned to the company in November 2022 after Chapek’s ouster, he was worried that a company once known for magical family vacations was earning a reputation for price gouging.

Shortly after returning, Iger called a meeting at Disney’s Burbank, Calif., headquarters, and asked D’Amaro to come up with a list of things the company could do to win back the goodwill of fans, according to people familiar with the meeting.

The company could offer discounted parking, or more days during the off season with lower-priced tickets, the parks chief suggested. It could also freeze the theme parks’ regular rounds of price hikes, but that could deprive Disney of hundreds of millions of dollars in revenue.

Iger chose to bring back free overnight parking at Walt Disney World Resort hotels and off-peak ticket promotions, the people said. Regular price hikes continued. Iger declined to be interviewed for this article through a spokeswoman.

Growth engine

A year later, Disney began to have serious concerns about the rising cost of visiting the parks, according to former employees involved in the discussions. The results of surveys asking whether Walt Disney World and California theme park guests intended to return soon showed that fewer Mickey Mouse devotees were planning return trips.

The issue was raised with Iger, according to people familiar with the matter, but parks were still booming. The Experiences division had become the company’s primary profit engine in 2022, replacing the declining cable TV business.

Internally, teams that worked on pricing, promotions and consumer feedback debated through the spring of last year how to improve the “intent to return” survey results, people involved in the discussions said.

By the summer of 2024, Disney began warning investors that attendance was softening, a trend consistent across the theme park industry. The company’s share price fell sharply in August when Disney said revenue was slowing at the parks because of consumer uncertainty that it expected to continue for a few quarters.

In recent months, Disney has announced limited-time offers for $50 kids tickets, the return of discount dining plans for some Disney resort hotel guests, free in-park photo packages and a fresh round of hotel room promotions.

Johnston, Disney’s CFO, in December called the summer weakness in demand “a hiccup” and said that consumers had recovered. A host of new attractions and major expansions announced at a fan event this year will allow Disney to raise prices further without tamping down demand, he said.

There is a broader sense among U.S. families that experiential vacations are becoming unaffordable, according to a recent survey of more than 2,000 U.S. households conducted by Harris Poll for the Journal.

The survey found that 74% of respondents believe that experiences like cruises, amusement parks and visits to Disney resorts have become financially out of reach. The poll indicated that lower-priced nature-focused vacations are gaining ground on pricier resort and theme park trips.

Among those who reported that they’ve cut back on Disney vacations, the biggest reason was cost—59% said a Disney experience had become too expensive, compared with 27% who said they weren’t interested and 14% who said they didn’t have time.

Disney said the Harris Poll’s survey was “flawed and misleading” and unfairly cast Disney in a negative light.

A June survey of 2,000 families by online loan marketplace LendingTree found that 45% of those who visited Disney resorts with children in tow went into debt to afford the trip.

This fall, Disney sent its own post-visit surveys to members of the company’s Disney Vacation Club timeshare program with 47 pages of questions, mostly about visitors’ household finances and travel habits.

One survey asked visitors how likely they were to be “receiving / managing an inheritance” or to experience the “loss of family member or loved one” over the next five years.

A generous inheritance was the only way Melissa Buckley of Cedar Lake, Ind., could afford a trip to Walt Disney World in December. Buckley, who works in procurement for the oil industry, had been saving up to take her family of four there for about a decade, but unexpected bills kept getting in the way.

They left at dawn the day after Christmas to drive to Orlando, with snacks packed in a cooler in the trunk. Their total budget, including four days of park passes, line-skipping add-ons, one restaurant meal a day and accommodations for two parents and two kids, aged 9 and 7, was nearly $6,000.

“There’s no way we could afford this from our savings alone,” said Buckley.

Austrian prosecutors accuse René Benko of embezzling tens of millions

Former billionaire property tycoon behind collapsed Signa group remains in pre-trial detention

Vienna criminal prosecutors have accused René Benko of embezzling tens of millions of euros in the run-up to the collapse of his real estate empire in 2023, including potentially through the €46mn sale of an Italian luxury estate by his Signa group to a private foundation authorities say was in effect controlled by him.

Benko, who presided over a group that at its peak owned half of New York’s Chrysler Building, part of Selfridges in London and some of Germany’s biggest department stores, was arrested in Austria last month following a criminal investigation by prosecutors in Vienna, Munich and Berlin.

But Signa, which was built on €5bn of debt, started to disintegrate in late 2023 when one of its central companies, Signa Holding, filed for insolvency. Benko himself filed for personal insolvency last March.

Benko has been in pre-trial detention in Austria since January over alleged aggravated fraud, embezzlement and fraudulent bankruptcy.

Criminal prosecutors in Berlin and Munich are also investigating potential misconduct and Italian law enforcement agencies issued an arrest warrant last year over alleged suspicious payments to local officials.

In December, a lawyer for Benko said his client was confident that “any allegations against him can be clarified as substantively incorrect”.

According to a 38-page arrest warrant issued by Austrian prosecutors and seen by the Financial Times, Benko is accused of deceiving business partners to inject €35mn into the failing property holding company while simultaneously shifting cash and assets worth tens of millions of euros out of creditors’ reach — including furniture worth €8mn, a €90,000 Patek Philippe watch and expensive hunting rifles.

One of the contentious transactions identified by prosecutors is the sale of the luxury estate Villa Eden Gardone in Italy in 2023, originally owned by Signa Holding and sold in August 2023 for €46mn to a foundation officially controlled by Benko’s mother Ingeborg.

Instead of cash, prosecutors state that the mansion was paid for using shares in a Signa subsidiary that became worthless when the entity filed for insolvency three months later.

Prosecutors allege that the transaction was “artificial and economically implausible” as it swapped luxury real estate for an heavily devalued equity stake in a struggling company.

They claim the transaction was conducted haphazardly and the sale documents lacked a detailed description of the assets changing hands, normally standard procedure for such a complex deal.

Moreover, prosecutors allege that Benko called the shots at two family foundations — one notionally controlled by his mother Ingeborg, a retired nursery school teacher, and one by his daughter Laura — which were parties to a number of potentially suspicious transactions.

Prosecutors also raised concerns about a €2mn cash payment in 2023 Benko made to a person close to him: part of a series of payments between 2018 and 2023 that totalled €15.5mn, according to the arrest warrant.

They accuse Benko of concealing his ownership of furniture worth €8mn in an Innsbruck mansion and took issue with a payment of €360,000 in October 2023 to a legal entity that owned a property he used in Innsbruck, characterising it as an advance payment of rent for the next four years. Prosecutors claim that this payment lacked any “objective justification”.

At the same time as Benko was orchestrating the alleged asset stripping in 2023, he was allegedly also misleading investors about his financial health.

In mid-2023, when his own investment vehicle was down to a few thousand euros of cash in its bank account and according to the investigation in effect insolvent, Benko promised that he would personally contribute €35mn to a €350mn capital increase of Signa Holding, the arrest warrant states.

The prosecutors claim that he channelled investments by two of his business partners through multiple legal entities in his empire to mask the origin of the funds, and then misrepresented the money as his own contribution.

A lawyer for Benko did not respond to a request for comment. Vienna prosecutors declined to comment.

ITV investors back M&A talks as rivals circle

London-listed broadcaster could sell studio arm to unleash value

Major shareholders in ITV support management efforts to explore a potential deal for its production arm, with rival studios and private equity now circling one of Europe’s largest TV studios.

ITV has held early talks with RedBird IMI, the Abu Dhabi-backed investment group that last year acquired UK rival All3Media for more than £1.1bn, according to several people familiar with the situation.

A merger of ITV Studios with All3Media could create a production group worth more than £3bn, bringing together the UK studios responsible for shows from Love Island to Traitors and Rivals, and giving negotiating power at a time when many streamers and broadcasters are tightening their budgets.

While the two sides had held conversations, the people added, these were at an early stage with no certainty of any progression or deal. RedBird IMI — whose New York-based boss, Jeff Zucker, was in London in late January — is the Abu Dhabi-backed investment vehicle that the UK government blocked last year from owning the Daily Telegraph.

Meanwhile, a number of other potential suitors are looking at ITV Studios, the people said, including private equity groups CVC and Blackstone. Rivals such as Banijay, one of Europe’s largest production groups, were also monitoring the situation, two people said. 

Blackstone, CVC and Banijay all declined to comment.

A deal with RedBird IMI was still seen as a more likely option, said the people familiar with the situation, in part given ITV’s clear interest in merging with All3Media in the past. 

ITV, RedBird IMI and All3Media declined to comment on the talks.

ITV, led by chief executive Dame Carolyn McCall, lost out to RedBird IMI in the auction for All3Media last year. 

With ITV’s share price near where it was trading 13 years ago, investors told the Financial Times that there was support for its management to explore a potential deal given the lack of value being put on the broadcaster’s business units. 

One top-10 shareholder said that while ITV had done a good job investing in the TV part of the business, notably in online streaming, this had not been recognised by the market. 

“There comes a point with ITV where, if the market can’t see the value for itself, ITV has to do something to make the value of the studio business more apparent,” the shareholder said.

The investor added that they would welcome a transaction involving the studios business, such as selling all or part of the business, or a joint venture, adding that ITV could use the proceeds to buy back shares. 

They said: “If you think you are undervalued and there is something you can do about it, you can’t sit tight forever.”

Liberty Global, which is ITV’s largest shareholder with about a tenth of its shares, is also supportive of the management looking at options for the business, said two people familiar with its thinking. 

The people familiar with Liberty’s position pointed out that a deal could also give the US group an exit for its 10 per cent stake in ITV, or access to content talks for its wider business. Liberty Global declined to comment.

Mark Kelly, chief executive of financial advisory firm MKP Advisors, said that “if you put a conservative valuation multiple on the production side of the business you end up with a valuation of about £3bn”. 

Compared with ITV’s current enterprise value of about £3.3bn, he added, this meant that the broadcast side of the company traded at close to zero.

If a deal was to be struck, it would mark the culmination of more than a decade of speculation about the future of the business. The company regularly reviewed its business units, including its studios arm, said one person close to the group, and has so far not made any move towards a break-up.

There are compelling reasons for keeping the businesses together, with ITV Studios feeding hit shows such as Love Island to its broadcasting stablemate, as well as selling them elsewhere in the world.

But these arguments could be surmountable, said one person familiar with ITV’s thinking, especially given the financial logic of a break-up of businesses that would be worth more to the market separate than together. 

Rival executives think that the likelihood of a deal is better than in past years, with McCall in her eighth year in charge at the group and potentially looking to set out a defining legacy. 

McCall saw the industrial logic of creating a British TV production powerhouse, said one person familiar with her thinking, with any merger likely to see efforts to keep the combined studios business remaining in the UK.

ITV’s management has also been frustrated by the lack of value being given to its two businesses, according to one person familar with the situation, despite signs that its investment in growing a digital TV platform, ITVX, to replace its waning traditional linear broadcasting service was paying off.

In its last set of results, ITV reported 14 per cent growth in streaming hours and a 15 per cent increase in digital advertising revenue in the nine months to September 30 for ITVX.

Some shareholders, while supportive of moves to consider M&A, will still need to be reassured that the price is right for the deal this time. Last year, some balked a the high price being asked for All3Media, according to those close to the situation.

Analysts say that setting out a clear future for the broadcasting arm will be essential to make any deal. The UK government is also expected to want to ensure that the UK’s second-largest public-sector broadcaster — legally known as Channel 3, and required by law to provide “beneficial” content — can thrive on its own. 

Panmure Liberum analyst Johnathan Barrett said that a separation would lead to “ambiguity about getting it right without significant help from within ITV [even] before the complexity of the Channel 3 licence regime and public service broadcast obligation”.

Gulf states turn to metal trading to tap into growing demand

Companies in Oman, Abu Dhabi and Saudi Arabia explore markets fuelled by energy transition as they diversify beyond oil and gas

Leading companies in Oman, Abu Dhabi and Saudi Arabia are planning to launch metal trading companies, as the region taps into growing demand for metals while it looks to diversify beyond oil and gas.

Abu Dhabi-based International Resources Holding, a mining company that is part of a conglomerate chaired by powerful Emirati royal Sheikh Tahnoon bin Zayed al-Nahyan, has already built out a 60-person trading unit to handle energy and metals.

Minerals Development Oman, the state-owned mining company, is also in the process of hiring a top executive to lead a 25-person trading team, according to MDO’s chief executive, Mattar Al Badi.

The trading plans come as many oil-dependent Gulf states seek to position themselves in the global supply chain for the metals needed for the energy transition, such as copper, lithium and iron ore.

“These countries want to diversify from oil, and they are exploring every opportunity to do so,” said JF Lambert, founding partner of consultancy Lambert Commodities.

Many of the world’s biggest oil traders, such as Vitol, Mercuria and Gunvor, have also recently expanded their metal trading operations.

Over the past five years, commodity trading activity has gradually shifted away from the traditional hubs of London and Geneva towards the Middle East, particularly Dubai, where there has been a surge of new trading offices.

Oman, whose oil production is modest compared with neighbouring Saudi Arabia and UAE, will establish a trading company under MDO, which has recently revived copper extraction from its Lasail mine after a three-decade hiatus. 

Al Badi, MDO chief executive, said the trading company would help organise Oman’s fragmented exports of chromite and gypsum, and help the country get a better price for its resources.

“Oman is one of the biggest countries in exporting gypsum, but the market is not organised,” Badi said. A trading company would help Oman “ensure that we maximise the margin” from its goods, he added.

MDO is in talks with six international commodities firms — Trafigura, Glencore, Traxys, IXM, Mercuria and Gunvor — over a potential offtake arrangement for its processed copper and partnership in its trading unit.

In Abu Dhabi, one of the world’s top 10 oil producers, IRH has already hired a trading team in oil and gas, as well as metals, and has been in discussions about potential trading opportunities with international traders, including Mercuria. 

IRH said it was trading commodities from third parties across base metals, energy products and iron ore, as well as developing a “proprietary trading portfolio spanning global commodities and structured transactions”.

Part of national security adviser Sheikh Tahnoon’s sprawling International Holding Company, IRH burst on to the mining scene in late 2023, agreeing to buy a 51 per cent stake in Zambia’s Mopani copper mine for $1.1bn.

In another sign of the Gulf’s pivot towards metals and minerals, Abu Dhabi upped its bet on mining last week. Sovereign investor ADQ announced a $1.2bn joint venture with specialist metals investor Orion Resources, which will focus on copper, iron ore and other materials. Both sides will initially invest $600mn. 

Philip Clegg, managing partner of the joint venture, said on top of buying stakes in miners, the investments were being made to secure the long-term supply of critical minerals.

The Gulf was “becoming a much more dynamic place, and much more strategic in the way that players within the region are thinking about how to invest in the sector”, he said.

Saudi Arabia, the region’s biggest economy and the world’s largest oil exporter, is investing heavily in developing its domestic mining sector, and the government sees mining as a third pillar of the economy, alongside oil and petrochemicals.

State-owned miner Ma’aden and sovereign Public Investment Fund have a jointly managed mining investment fund, Manara. Bob Wilt, Ma’aden chief executive, said last year that Manara was planning to build a trading team, and that Manara’s purpose was to “secure offtake of critical minerals” to meet the needs of Saudi Arabia.

However, according to several traders, Manara could not receive metals produced in 2024 by Vale Base Metals, in which it owns a 10 per cent stake, because its trading team was not ready yet.

Manara and Mercuria declined to comment.

TotalEnergies urges Europe to seek LNG deal with Trump

Chief executive Pouyanné said a long-term deal with the US was necessary to guarantee energy security

TotalEnergies chief executive Patrick Pouyanné has said he is “ready” to help sell more US liquefied natural gas to Europe, but urged the EU to seek a long-term LNG deal to guarantee energy security.

Pouyanné said an agreement that secured a more favourable licensing regime for European companies would satisfy Trump’s desire for the bloc to buy more US oil and gas, while protecting Europe from future price increases.

The chief executive, whose company is the biggest exporter of energy from the US, said this would guarantee security of supply from the US and help wean Europe off Russian gas.

Currently, export licences to Europe must be regularly renegotiated while countries that have trade agreements with the US have longer-lasting and automatic approvals.

Pouyanné said Europe should also seek “a form of guarantee” to ensure US LNG supply could not be disrupted. He was also concerned that without such guarantees, higher gas prices could lead to the US limiting exports of its LNG.

“Trump wants to sell more energy to Europe, LNG in particular,” Pouyanné said. “Total is one of the main players. I’m ready to bring more energy to Europe.”

The executive’s comments come as Trump has called on Europe to buy more oil and gas from the US to avoid tariffs, and as business leaders and governments contend with his protectionist trade agenda.

Frank Harris, an LNG expert at consultancy Wood Mackenzie, said Pouyanné’s comments demonstrated “the fundamental attractiveness of US LNG to a portfolio player like Total”.

Total’s boss was speaking after the release of 2024 results that showed the company’s net income had fallen more than a fifth in 2024 due to lower crude prices. The company downgraded its 2025 organic investment target slightly to $17bn, from $18bn.

Pouyanné, whose company is involved in several US LNG projects including a 15mn tonnes a year project in Louisiana and an initial 17.5 million tonnes a year project in South Texas, said Total would not rush into more US projects despite Trump’s election.

The US president has promised to roll back environmental rules, open up vast swaths of federal land and waters for development, and reform permitting rules to facilitate the production of fossil fuels.

“The US is attractive, and we will continue to invest . . . but our plate is already quite full,” he said. “I will not do more just because it’s easier to do.”

Pouyanné was scathing about onerous environment, social and governance rules in Europe, which he said hurt the bloc’s competitiveness.

He described the EU’s corporate sustainability reporting directive, which threatens companies with fines for not ensuring their supply chains do not harm workers or the environment, as a “monster” formed from “good intentions”.

In Europe, Total has faced criticism over its long-term plan of continuing to invest in fossil fuels, including LNG. It is seeking a continuous listing of its shares in New York, where institutional investors are less preoccupied with environmental factors.

But the company is not abandoning its ambitions for electricity production, combining renewables and natural gas. It is also seeking to boost net electricity production to 100 TWh in 2030, from 40 TWh last year.

Total would not change strategy “based on one US administration” even as Trump’s hostility to offshore wind has caused it to halt a planned wind farm off the coast of New York and New Jersey, Pouyanné said.

The company “might stop” a small e-methane project in the US, if “fiscal incentives” granted under Joe Biden’s Inflation Reduction Act are not protected, he added.

Analysts have said that other low-carbon projects, such as ExxonMobil’s proposal for a huge hydrogen facility at Baytown, Texas, could be abandoned if IRA tax credits are repealed by Congress.

European companies warn of uncertainty from Donald Trump’s tariff threats

Executives left guessing at scale and impact of any US levies on EU imports

European companies are bracing for a financial hit from a potential trade war with the US, with some top executives warning that uncertainty over Donald Trump’s trade policy is already affecting investment plans.

The US president delayed steep tariffs against Canada and Mexico earlier this week but still has the EU in his crosshairs, leaving executives guessing as to the scale and impact of any new levies. 

Markus Krebber, chief executive of Germany’s RWE, one of Europe’s largest power producers, said the threat of tariffs was slowing his group’s investments into wind and solar projects in the US. 

Potential import duties created huge uncertainty over “what you can get into the US”, Krebber told a conference this week.

Intermediate goods such as rotor blades and batteries “need to be imported because there is not yet local manufacturing” of them in the US, he added. 

Some companies, including luxury goods group LVMH and oil major Shell, were considering increasing their US presence. But Krebber said: “Our big customers are all telling the [Trump] administration that it needs to ensure certainty pretty soon, because otherwise, actually, they achieve the opposite of what they want.” 

Analysts at Goldman Sachs said in a note that it was “not necessarily the tariffs themselves that matter, rather the trade uncertainty that hits economic growth and investment intentions”. 

The bank is already expecting some impact from trade barriers, with its equity team projecting European earnings per share growth at just 3 per cent in 2025 — well below analysts’ consensus forecasts.

The EU is preparing to offer concessions to avert a trade war with Trump, who has complained that Europeans “don’t buy our cars, they don’t take our farm products, they take almost nothing and we take everything from them”.

The bloc accounts for approximately 15 per cent of US imports, with machinery, pharmaceuticals and chemicals among its top exports to America. Europe’s automotive sector is also exposed to tariffs, especially if the EU retaliates with levies on US goods. 

“The big question is what happens if those tariffs come in between the US and Europe,” said Jim Rowan, chief executive of Volvo Cars. 

Although it would be “manageable” if the US raised tariffs on EU goods from 2.5 per cent to 10 per cent, a bigger margin would force the company to increase production at its plant in South Carolina, Rowan said this week. 

The Swedish group this week warned of lower profitability this year, in part due to tariff uncertainty. French drinks group Pernod Ricard also said it could be hit.

London-listed drinks conglomerate Diageo forecast a $200mn knock to operating profits by June if Trump carried out his threatened 25 per cent levy on Mexican and Canadian imports.

Jan Rindbo, chief executive of Danish commodities shipping group Norden, warned that if the EU retaliated against US tariffs with levies of its own, then companies would be “hit twice”. A trade war could lead to EU companies importing some goods from further afield, such as from South America, he added. 

Although demand for a wider range of shipments would be positive for the shipping sector, overall it could mean that the “US economy will get hit, that the EU economy will get hit”, he said.

Despite the concerns, a number of executives said they had the flexibility to adapt to trade disruption. Energy companies would be able to reroute liquefied natural gas to avoid tariffs imposed on the fuel between the US and China, said Patrick Pouyanné, chief executive of France’s TotalEnergies. 

“The Chinese are buying energy from companies like Total. In fact, they just asked us, to avoid paying the [tariff], to give them some Australian or Qatari LNG, and we will take the US LNG and send it elsewhere, maybe to Europe,” he told the Financial Times. 

ArcelorMittal, world’s second biggest steelmaker, played down its exposure to potential US tariffs on Mexico and Canada. The group’s Canadian operation is a critical supplier to the US automotive sector, while its American facilities use semi-finished steel products from Mexico. 

Genuino Christino, ArcelorMittal’s chief financial officer, said he was “not overly concerned” about the prospect of tariffs. The company, he said, took a hit of about $100mn per quarter in 2018 when Trump last imposed 25 per cent tariffs on steel. The higher costs, however, were offset by higher prices. 

Micael Johansson, chief executive of Sweden’s defence champion Saab, told the FT: “It’s a bit premature to understand where it is going. Trade wars are never good for anyone.”

Morgan Stanley cedes title of chief Goldman Sachs rival

Both JPMorgan and Evercore generated more financial advisory fees last year than Ted Pick’s bank

JPMorgan Chase and investment banking boutique Evercore have displaced Morgan Stanley as the chief rivals to Goldman Sachs in the core Wall Street business of dealmaking advice.

JPMorgan generated financial advisory fees last year — including mergers and acquisitions — of $3.29bn, while Evercore recorded $2.45bn and Morgan Stanley $2.38bn.

M&A fees are volatile between quarters and even years, because they can run to the tens of millions and are in general only paid when a deal closes. But the fees for 2024 confirm a shift in Wall Street’s pecking order in the past decade, with the arrival of JPMorgan, traditionally a top lender to companies, as well as upstarts such as Evercore as major boardroom players.

Goldman Sachs has long dominated the business of advising chief executives on deals. The latest data indicate that JPMorgan has cemented its position as the second-biggest earner, however, after duelling with Morgan Stanley through the 2010s.

Last year JPMorgan narrowed the gap with Goldman to its smallest in at least a decade. In the fourth quarter it reported $1.06bn in advisory fees — excluding revenues from equity and debt underwriting — beating Goldman for the second time in a year.

Evercore recorded $850mn in fees for the quarter, and Morgan Stanley just $779mn.

M&A remains the crown jewel product in investment banking, with high stakes transactions attracting commensurate fees. At the same time, M&A advice requires only a handful of bankers, unlike initial public offerings or bond issues which demand armies of personnel.

“You are providing advice that is not a commodity,” said Devin Ryan, an analyst at Citizens JMP Securities. “And so therefore the fees on transactions have not come under pressure, like a lot of areas within financial services.”

The changing of the Wall Street guard has unfolded as Morgan Stanley has focused resources on building up the wealth management business, where it earns steady fees that are prized by investors.

Morgan Stanley has been a traditional investment banking blue blood, spun out of JPMorgan 90 years ago in the wake of the Glass-Steagall Act that separated commercial from investment banking. Among its alumni are Joe Perella, Bob Greenhill, Frank Quattrone and Paul Taubman, each of whom founded well-regarded boutique banks.

Its wealth management strategy was, however, championed by former chief executive James Gorman, who retired from the role at the end of 2023. His successor, Ted Pick, previously ran Morgan Stanley’s investment bank, raising hopes among the firm’s dealmakers that he would direct more resources towards them.

“There was a lot of relief that Ted became CEO from our side of the bank rather than a guy from investment or wealth management,” said one Morgan Stanley investment banker.

However, bankers often work for years to foster the corporate relationships that can yield the industry’s lucrative fees, requiring a long-term commitment to investment banking.

“Whatever deals happen this year, you earned them three years ago,” said one former senior investment banker at a large Wall Street firm.

JPMorgan has also invested heavily in its M&A business, using the wide range of products it offers to muscle its way into lucrative advisory mandates.

“At some point they got much more aggressive about saying ‘hey, we’re your biggest lender, so you should be giving us your advisory business’,” said one Wall Street chief executive.

In 2023 the bank told investors it had earmarked $200mn to hire “revenue producers” at its corporate and investment bank. Jamie Dimon, the bank’s longtime chief executive, is known to call coveted clients personally to make JPMorgan’s case.

“JPMorgan has been very consistent and very dedicated to growth in the investment bank,” said Ryan of Citizens.

Evercore has been among the biggest winners among a new clique of boutiques that do not offer lending or trading services, landing major mandates including on the $29bn sale of Calpine to Constellation Energy.

It has also expanded its advisory business beyond corporate M&A to private funds transactions and restructuring advice, where there is less competition from large investment banks.

“They’ve done a lot to build out their franchise and establish themselves as a premier boutique investment bank,” said Aidan Hall, an analyst at Keefe, Bruyette & Woods.

Other challengers such as Jefferies have also taken advantage of the shifts on Wall Street to seize ground in investment banking. Jefferies reported $1.8bn in advisory fees for the year to November, beating bulge bracket banks Bank of America and Citigroup after a recent hiring spree.

Producer prices contract for 28th month as threat of US trade war clouds economic outlook

Chinese consumer prices rose at the fastest pace in five months in January, as a bump in spending over the lunar new year holiday period breathed life into the world’s second-largest economy, which has been beset by weak demand.

China’s consumer price index gained 0.5 per cent in January compared with the same period last year, official data released on Sunday by the National Bureau of Statistics showed, ahead of the 0.4 per cent growth forecast by economists polled by Reuters.

That figure marked an acceleration from December, when CPI crept up 0.1 per cent year on year, and was the fastest growth rate since August.

Producer prices, a measure of factory gate inflation, fell for a 28th consecutive month, declining 2.3 per cent. The fall was marginally faster than economists’ forecast of 2.2 per cent and matched December’s contraction.

January’s inflation reading was boosted by increased consumer spending over the lunar new year, as millions of Chinese residents travel to their hometowns and exchange cash-filled red envelopes. The holiday, which fell earlier than usual in 2025, also tends to see an uptick in spending on items such as food, as consumers prepare for large family gatherings.

“From a year-on-year perspective, service and food prices increased significantly due to the Spring Festival being in a different month,” Dong Lijuan, an official at the NBS, said in a statement, adding that the reading was also affected by a recovery in petrol prices.

Prices for aeroplane tickets were 8.9 per cent higher than a year earlier, while travel-related costs rose 7 per cent, Dong added.

The stronger consumer price growth represented a rare bright spot for China’s economy, which has been fighting outright deflation after a property sector crisis now in its fourth year and strict pandemic lockdowns damped consumer confidence.

Meanwhile, the manufacturing sector, which was previously a source of growth alongside exports, has also begun to falter.

Factory prices have been stuck in a prolonged slide for more than two years, while output contracted for the first time in four months in January, as Chinese producers have grappled with increasing overseas competition, a situation that analysts suggest will only worsen as US President Donald Trump reopens his trade war with Beijing.

Trump this month imposed an additional 10 per cent tariff of Chinese goods, a move he described as the “opening salvo”. China retaliated with levies of 10 to 15 per cent on goods including US liquefied natural gas, coal, crude oil and farm equipment, which are due to take effect on Monday.

China’s President Xi Jinping has vowed “vigorous” measures to strengthen consumer spending and policymakers have unveiled a series of stimulus measures, but analysts believe that deflationary pressures will continue to plague the Chinese economy in 2025. Beijing also faces a balancing act trying to reflate the economy while Trump’s tariff measures pile pressure on renminbi.

Rising trade tensions have also raised concerns about capital outflows and constrained the ability of the People’s Bank of China, the country’s central bank, to lower rates. The PBoC added a record Rmb2.2tn ($300bn) in short-term funds into the financial system ahead of the new year break to help ease liquidity pressures that are heightened over the period.