Tycoons take TV battle to court

Rupert Murdoch and Kerry Packer, Australia's two most powerful media tycoons, have become locked in bitter legal wrangles over control of the country's fledgling pay-TV industry.

On Friday, Mr Packer launched a court action against Mr Murdoch's News Corporation, claiming the rights to TV programmes from Twentieth Century Fox, the Murdoch-owned Hollywood studio.

This Thursday, Mr Murdoch also goes to court in Sydney in an attempt to wrench TV rights to rugby league matches from Mr Packer's control.

The moves lie at the centre of an extraordinary dispute between the two rivals, which has seen their relations sink to a low point.

They also come at a crucial time for News Corp, which last week saw cash flow drop dramatically.

Its money-spinning BSkyB satellite operation is also involved in an Office of Fair Trading inquiry in the UK, where it already controls TV rights for a number of major sports.

The Packer and Murdoch families have alternatively feuded or formed strategic alliances over the spoils of the Australian media scene for almost 70 years.

This battle, though, is the most deep-seated in memory. Looming over it are huge changes expected to result from an inquiry into media ownership that John Howard, the prime minister, is about to establish.

At a secret meeting in London late last year, Mr Murdoch and Mr Packer tried to patch up their differences. They struck a deal whereby Mr Packer would end the rugby league war and his Australian TV network Channel Nine would gain Fox programme rights.

It quickly fell apart: "I came to a settlement with Mr Packer two or three months ago on this matter, and he welshed on it," Mr Murdoch said, venting spleen in one of his Australian papers.

Last month he retaliated, saying Fox would not now deliver programmes to Channel Nine.

Mr Murdoch is under intense financial pressure in Australia over the launch of Foxtel, a subscription cable television service in which he is a partner. It forms part of his grand scheme to build a global TV network through Europe, Asia and North America. Mr Packer is a shareholder in a rival Australian cable network, Optus Vision.

The arrival of pay TV in Australia was delayed by the old Labor government's frequent policy changes: "I think everyone is tired of the old faded and jaded players," former prime minister Paul Keating famously said. For that, read Messrs Packer and Murdoch, but when the dust finally settled, both were among the first to line up in rival consortia.

As in the UK, sport and movies have been key in lining up viewers. Mr Packer demonstrated the value of sport to TV revenue 20 years ago when he hijacked international cricket and eventually made peace by winning the rights to show Test matches on Channel Nine.

Last year, Mr Murdoch tried to emulate him when he signed deals with teams from the official rugby league competitions in Britain, Australia and New Zealand to form a super league competition which he planned to show on Foxtel and his worldwide satellite network.