Stream dammed up
Murdoch's Italo plan on hold pending legislation
"We are reconsidering our industrial plan and our projects regarding Stream because our original plans are no more feasible if the bill limiting soccer rights is approved," Letizia Moratti, News Corp. Europe's president, said in Rome.
December deal stalled
In December, Murdoch signed a preliminary agreement to buy 80% in Telecom Italia's digital TV platform Stream, which has about 120,000 subscribers. However, the deal has not been finalized because the Italian government decided in January to limit the acquisition of the pay TV rights to first-division soccer matches.
"Our negotiations with Telecom Italia are going on, but on a different basis," Moratti noted. "We planned to invest over $1.3 billion in Italy over the next five years, creating 3,500 jobs. Now we must redefine our industrial plan," she commented.
According to Moratti, only a platform controlling all soccer rights could compete against Italy's dominant digital player, Telepiu, which is owned by Canal Plus and has more than 520,000 subscribers.
Telepiu has cut exclusive pay and pay-per-view rights deals with several soccer clubs, and has secured access to blockbuster Hollywood films through the output deals it signed with all the American majors except Universal.
Unconfirmed reports suggest that in return for abandoning Italy, Murdoch has been given assurances that Canal Plus and parent Vivendi will not make a hostile move on BSkyB in Britain.
The two French groups recently upped their position in Pathe to around 30%. Pathe has 17% of BSkyB, meaning deep-pocketed Vivendi and Canal Plus now hold an indirect stake in the British pay television company. News Corp. has 40% of BSkyB. The possibility also exists that Canal Plus will offer Murdoch a stake in Telepiu.
Press reports in France are suggesting that Murdoch is now turning his attention to Germany, where he is already partnered with Canal Plus in the Vox station. Murdoch is known to be interested in taking a stake in Premiere, the pay television and digital disaster that is caught between warring shareholders CLT/Ufa and the Kirch Group.
Rampant speculation
Skeptics point out that over the past five years, Murdoch's name has been associated with just about every big media group in continental Europe, but so far his efforts to get a foothold outside Britain have come to nothing, despite a host of much-trumpeted (and short-lived) alliances.
The obvious upside for Canal Plus would be to get a free hand in the Italian digital market. In addition, the French group has little to gain if it finds itself in a bidding war with Murdoch for European rights to major sports events or Hollywood films.
However, any suggestion that Canal Plus and News Corp. have somehow carved up Europe would stir the interest of European competition commissioner Karel Van Miert. Moratti poured cold water on a carve-up theory Wednesday, saying such a deal "would be in clear violation of European anti-trust laws."
(Erich Boehm in London contributed to this report.)
