Murdoch eyes Kirch stake

News Corp boss seeks political allies in Germany

RUPERT MURDOCH sets off for Cologne next week to seek political support for a possible television venture between News Corp and the indebted German media conglomerate Kirch Gruppe. But media analysts wonder whether the media mogul's attempt to schmooze the Germans is a waste of time.

Mr Murdoch will be the main speaker at a press gathering in Cologne on 14 June at the invitation of the Social Democrat leader of the North Rhine Westphalia regional government, Wolfgang Clement.

He is to make this unusual public appearance amid speculation that he may be about to take a stake in Kirch, after the European Commission vetoed Kirch's digital TV link-up with Bertelsmann on competition grounds. It is unlikely Mr Murdoch will offer to buy a stake in Kirch, preferring his usual tactic of waiting to be invited in.

That could happen soon. Kirch lost DM1.4bn (pounds 500m) on its attempted foray into digital television and is looking increasingly vulnerable. A previous attempt at an alliance between Mr Murdoch's BSkyB and Kirch collapsed last year because Mr Murdoch was unhappy with the terms being offered.

Ever since then, Mr Murdoch has not hidden his desire to grab a larger share of the German television market, which, with 32 million TV households, is the biggest single language television market in Europe. "If we were allowed to we would go in [to Germany] at full speed," said a Murdoch aid.

But he has powerful opponents, not least Bertelsmann, the country's largest media company. In an interview with the magazine Der Spiegel last week, Bertelsmann chief executive Mark Woessner said he would support Kirch with millions of marks in exchange for film distribution rights to prevent Kirch linking up with News Corp.

Mr Murdoch's only television business in Germany is his 49.9 per cent stake in the free terrestrial channel Vox. In Germany, where there are 34 free terrestrial channels, the competition would be fiercer than in the UK. Only two of those channels make a profit. Investors have been equally disappointed with the performance of Germany's pay-TV market.

"It's standard for Murdoch to be opportunistic, but it doesn't make a lot of sense for him to enter a failing market," said Mathew Horsman, media analyst at Henderson Crosthwaite International Brokers. "It's hard to see how you could replicate BSkyB's success there - it certainly hasn't worked anywhere else yet."

BSkyB, in which News Corp has a 40 per cent stake, has dominated pay- TV services in the UK and is now the jewel in the crown of News Corp's global pay-TV empire. "Premium pay-TV has been slow to take off in Germany," said Helena Renfrew Knight, an analyst at Spectrum Strategy Consultants in London. She said Premiere, the pay-TV channel owned by Kirch, Bertelsmann and Canal Plus of France and launched in 1990, has fewer than 2 million subscribers. Kirch's DF-1 digital pay-TV channel "has probably fewer than 50,000 subscribers". Kirch's projections are for 600,000 by the end of this year.

Mr Murdoch's aspirations in Europe could face tough scrutiny from competition watchdogs even though his presence on the continent is small. Apart from Vox, he has a few radio stations and a couple of newspapers.

Major European media companies have all been trying to carve alliances in digital television to share the investment burden. Digital TV, which allows more channels, clearer images and interactive services such as home shopping, is seen as the future driver of earnings growth in the industry. "There has been an endless sequence of alliances that didn't make the last hurdle," said Mark Beilby, media analyst with Deutsche Bank.

One of the main obstacles has been EU Competition Commissioner Karel Van Miert, who is determined to prevent domination in the fledgling industry.

Yet Mr Murdoch's biggest rivals are established European media companies. In a speech to European ministers in London in April, Mr Murdoch accused Europe's state-owned TV companies of protectionism. Earlier this year, News Corp tried and failed to buy a stake in Italy's Mediaset TV company controlled by former Italian prime minister Silvio Berlusconi's Fininvest.

PROMOTED VIDEO
Arts and Entertainment
Robert De Niro, Martin Scorsese and DiCaprio, at an awards show in 2010
filmsDe Niro, DiCaprio and Pitt to star
News
i100
News
In this photo illustration a school student eats a hamburger as part of his lunch which was brought from a fast food shop near his school, on October 5, 2005 in London, England. The British government has announced plans to remove junk food from school lunches. From September 2006, food that is high in fat, sugar or salt will be banned from meals and removed from vending machines in schools across England. The move comes in response to a campaign by celebrity TV chef Jamie Oliver to improve school meals.
science
Sport
England captain Wayne Rooney during training
FOOTBALLNew captain vows side will deliver against Norway for small crowd
Life and Style
Red or dead: An actor portrays Hungarian countess Elizabeth Báthory, rumoured to have bathed in blood to keep youthful
health
News
peopleJustin Bieber charged with assault and dangerous driving after crashing quad bike into a minivan
News
ebooksAn unforgettable anthology of contemporary reportage
News
peopleHis band Survivor was due to resume touring this month
News
people'It can last and it's terrifying'
Life and Style
fashionModel of the moment shoots for first time with catwalk veteran
Sport
Radamel Falcao poses with his United shirt
FOOTBALLRadamel Falcao's journey from teenage debutant in Colombia to Manchester United's star signing
Life and Style
fashionAngelina Jolie's wedding dressed revealed
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Front-Office Developer (C#, .NET, Java,Artificial Intelligence)

£30000 - £45000 per annum + benefits+bonus+package: Harrington Starr: Front-Of...

C++ Quant Developer

£700 per day: Harrington Starr: Quantitative Developer C++, Python, STL, R, PD...

Java/Calypso Developer

£700 per day: Harrington Starr: Java/Calypso Developer Java, Calypso, J2EE, J...

SQL Developer

£500 per day: Harrington Starr: SQL Developer SQL, C#, Stored Procedures, MDX...

Day In a Page

Chief inspector of GPs: ‘Most doctors don’t really know what bad practice can be like for patients’

Steve Field: ‘Most doctors don’t really know what bad practice can be like for patients’

The man charged with inspecting doctors explains why he may not be welcome in every surgery
Stolen youth: Younger blood can reverse many of the effects of ageing

Stolen youth

Younger blood can reverse many of the effects of ageing
Bob Willoughby: Hollywood's first behind the scenes photographer

Bob Willoughby: The reel deal

He was the photographer who brought documentary photojournalism to Hollywood, changing the way film stars would be portrayed for ever
Hollywood heavyweights produce world's most expensive corporate video - for Macau casino

Hollywood heavyweights produce world's most expensive corporate video - for Macau casino

Scorsese in the director's chair with De Niro, DiCaprio and Pitt to star
Angelina Jolie's wedding dress: made by Versace, designed by her children

Made by Versace, designed by her children

Angelina Jolie's wedding dressed revealed
Anyone for pulled chicken?

Pulling chicks

Pulled pork has gone from being a US barbecue secret to a regular on supermarket shelves. Now KFC is trying to tempt us with a chicken version
9 best steam generator irons

9 best steam generator irons

To get through your ironing as swiftly as possible, invest in one of these efficient gadgets
England v Norway: Wayne Rooney admits England must ‘put on a show’ to regain faith

Rooney admits England must ‘put on a show’ to regain faith

New captain vows side will deliver for small Wembley crowd
‘We knew he was something special:’ Radamel Falcao's journey from teenage debutant to Manchester United's star signing

‘We knew he was something special’

Radamel Falcao's journey from teenage debutant to Manchester United's star signing
'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York