Greg Dyke on Broadcasting

How Murdoch lost to Berlusconi in a game of political football
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The Independent Online

When Murdoch's News International paid €700m for 80 per cent of Sky Italia from the government owned Telecom Italia four years ago (he has since bought the remaining 20 per cent), he planned to use football, as he has done in Britain, as a way of bringing millions of subscribers in. So Murdoch went ahead and bought the rights to the biggest teams in Serie A, the Italian League, for €250m per year, expecting the same sort of results he has had with the Premier League. Sadly for him, things haven't turned out that way.

When Sky Italia bought the rights to Internazionale, Milan and Juventus home matches they thought they were buying exclusivity. Rumour has it that the Italian Prime Minister Silvio Berlusconi, a close friend of Tony Blair (our Prime Minister borrowed his villa for his summer holidays last year) and the owner of Milan, assured Rupert Murdoch personally that that was what he was buying.

More than three million people signed up for Sky Italia, many on the back of the football contract with the big clubs, and all was going well until along came Digital Terrestrial Television. The Italian version of DTT, like the defunct ITV Digital in Britain, was launched as both a free and pay television service and in Italy it was the brainchild of the biggest commercial broadcaster, Mediaset, which just happens to be owned by one Silvio Berlusconi.

Like Murdoch, Mediaset recognised that the way to drive pay television in Italy was via football, and off they went to buy the newly created DTT pay rights to Italy's top eight football clubs, including Milan, Internazionale and Juventus, for just €86m euros a year - less than half the amount Murdoch's operation is paying. Now, for just two and a half euros a game, a fan can watch their favourite club on a pay per view basis without having to subscribe to Sky Italia and pay 60 euros a month to watch the big three clubs.

It would be the same as being able to pay £2 a match to watch the home games of Chelsea, Manchester United and Arsenal, instead of paying BSkyB £40 plus a month while Sky was still paying the Premier League £330m a year for what it thought was the exclusive right to televise Premier League matches.

It's pretty obvious who are the winners and losers in Italy. The big football clubs are getting paid twice, Mediaset is happy in that it has a new pay per view business which is driving its whole DTT operation, and Mr Berlusconi is particularly happy as he has a foot in both camps.

Mr Murdoch and News International are clearly the losers. They thought, with Mr Berlusconi's blessing, they had bought the rights to the Serie A clubs exclusively. It turns out they didn't, and fans, in their thousands, are buying DTT boxes. As a result News International believe they were misled and are particularly angry with Mr Berlusconi - not that he cares. Sky Italia lost €105m in the second quarter of this year.

One person who can be a little smug about the way things have turned out is the former CEO of Sky, Tony Ball. Originally Murdoch wanted BSkyB to buy Sky Italia but Ball was having none of it. The management team at Sky was against the deal and with Murdoch only owning 35 per cent of the satellite broadcaster he could not force it through. So News International did the deal instead. Since then Murdoch has taken over as chairman of BSkyB, got rid of Ball and appointed his son James in his place.

In dealing with Mr Berlusconi Rupert Murdoch should have known he was dealing with a slippery operator. When he stood as Prime Minister he promised that if he won he would sell Mediaset and devote his time to politics. Not only did he not do so but when he became Prime Minister he virtually took control of the state broadcaster RAI as well.

I saw this in action one day when, while still at the BBC, I watched executives from RAI announce to the European Broadcasting Union that Italy would no longer pay so much for international sports rights as there was no longer any competition in Italy. In effect Mr Berlusconi was now in charge of both Mediaset and RAI. Only last week it was announced that RAI and Mediaset had, in effect, jointly bought the rights to the Champions' League, leaving Sky Italia out in the cold. And although Sky Italia has bought the rights to the next three World Cups, under Italian law the top 25 games are "listed events" and have to be shown on RAI.

ABC was 'Lost', now it's found

First it was Desperate Housewives, now it's Lost. Next month Channel 4 will start to play out the second of the two new American series it bought last year, two series which have been hits all over the world and turned around the fortunes of the American broadcaster ABC.

The story of the two series is remarkable in that before they arrived in the schedules of Disney-owned ABC the channel was increasingly being written off as a basket case in the States. It was number four behind NBC, CBS and Fox, and had been in trouble ever since Who Wants to be a Millionaire had gone into decline and was dropped from the schedules. To try to turn the channel around, programme boss Lloyd Braun decided to move away from the reality format which was dominating the US networks and move his money into drama. He commissioned two new shows called Desperate Housewives and Lost but before they hit the screens his bosses lost patience and he was fired.

But when the shows aired both were big hits, ABC's fortunes were revived and both shows have played out successfully all over the world, Desperate Housewives being a big hit here. Braun's reputation as a commissioner is now sky high, but he never got his job back.