Vittorio Cecchi Gori is moving ahead with legal action against Rupert Murdoch’s News Corp. and Telecom Italia, claiming they manoeuvred to oust him as their partner in pay-TV operator Stream by means of a sudden and substantial capital increase.

In the lawsuit, filed in February, in a Rome court, Cecchi Gori said that a Stream capital increase approved this month by News Corp. and Telecom Italia, who each hold 35 per cent of Stream while he holds 18 per cent, violated shareholding pacts and should be invalidated. Cecchi Gori complained that after agreeing to a L300 billion (Euro 155 million) cash injection, he was given just a few hours notice of a February 4 board meeting, at which the two partners revealed the L540 billion capital increase. Cecchi Gori’s comments caused instant alarm bells for the Italian government. “We will ask for more precise details from Telecom…I don’t think we can have a situation in which the Italian presence in the digital platforms is weakened,” Communications Under-secretary Vincenzo Vita said.

The situation became more complicated following a March 2 decision by a Rome court to block the Stream capital increase. However, the court decision was not a direct response to Cecchi Gori’s lawsuit, but rather an answer to a request of approval from Stream itself. The ruling magistrate said that, before obtaining the green light for the capital increase, Stream should previously pay off the debts of around L253 billion which have accumulated during the financial year 1999 (or as an alternative reconstruct the capital). Sources from the Florence-based media group have used the opportunity to underline the fact that the freezing of the capital increase only serves to demonstrate the bad timing of the major Stream shareholders in launching such an operation.

Telecom and Murdoch have firmly decided to go on with the capital increase, while Cecchi Gori faces the imminent expiry date for the loan contracted by his holding company Finmavi (which controls the film and TV division) with a pool of financial institutions led by Merrill Lynch.

Meanwhile, Stream is set to re-launch its basic pay-TV package on April 1, with a small price increase — from pounds19,000 to L24,000 a month. As reported in Interspace 687, the Blu Stream package will include six new channels — CFN (financial news), Comedy Life (movies and TV series with a comic touch), Duel (adventure, action, sci-fi, western movies and TV series), National Geographic Channel, SNAI Sat (sports channel devoted to “minor” sports) and Fox Kids, as well as ten interactive services. The premium offer will also be relaunched, probably from April 15, and will include separate movie and sports packages.