Italian broadcaster Mediaset may extend its alliance with Germany’s Kirch Group to include pay-TV, according to Mediaset CEO Maurizio Carlotti. Commenting on rumours that Rupert Murdoch’s News Corp and Canal Plus may take a stake in Kirch’s German digital TV platform Premiere World, Carlotti said: "If and when we decide to ally ourselves with a pay television platform the logic of globalisation will force us to have the same ally in every country."

In the interview with business daily Il Sole 24 Ore on October 13, Carlotti denied a merger with the German group and added that the top priority is to make the alliance with Kirch competitive, in programming and advertising terms. He also stressed that growth in the European media sector cannot come any more from acquisitions, but from "agreements, mergers and alliances." Following long running talks, on October 15 Mediaset and KirchMedia finally signed a definite agreement for the launch of a European joint venture in the TV sector. The joint venture, which will officially launch during the course of this week, faithfully reflects the terms of the preliminary agreement signed back in March. The objective of the venture, in which Mediaset plans to invest around L361.6 billion (pounds 186 million), is to operate as one subject on the European scale in the sale of advertising space and TV productions, acquisition and distribution of programmes (movies, series, TV movies). Thanks to their presence in the Italian, Spanish and German markets, the two media groups will have access to a potential audience of 200 million viewers, which represents nearly two thirds of the advertising market in continental Europe. Mediaset president Fedele Confalonieri defined the agreement as a "strategic project for our activities and our geographical expansion", and also expressed his wish that the alliance with Kirch will be followed by other international alliances for Mediaset.

Murdoch close to taking Premiere World stake

After several failed attempts, Rupert Murdoch seems finally set to enter Germany’s nascent digital pay-TV market. A spokesman from Kirch Group confirmed that negotiations between Leo Kirch and Murdoch are taking place.

According to industry sources, Kirch is prepared to hand up to 25 per cent of his digital pay-TV venture Premiere World to foreign investors. The German Federal Cartel Office also confirmed that Kirch and Murdoch intend to become partners in Premiere World. A spokesman said that It is not known whether the German Cartel Office or the EC will probe the deal in case an agreement is reached. However, he said that it will be "closely examined". According to unconfirmed reports, Murdoch will meet with Kirch this week in Munich to finally sign the contracts about taking over 20 to 25 per cent. The stake will be owned not directly by Murdoch’s News Corp, but by his UK pay-TV venture BSkyB. Other investors rumoured to become shareholders in Premiere World, with stakes of only up to 5 per cent, are Kirch’s Italian business partner Silvio Berlusconi and Saudi-Arabian Prince Al Waleed. Both are already minority shareholders in Kirch’s KirchMedia holding.