A high stakes power struggle for control of Europe’s most lucrative commercial broadcaster, German market leader RTL, has broken out between the web’s biggest shareholders, CLT Multi Media and Bertelsmann AG.

Bertelsmann is angling to wrest majority control of the web from CLT by buying and consolidating the non-CLT-held shares in RTL into a new holding in which it would have an 80% stake.

CLT this week temporarily blocked Bertelsmann’s move in regional court, setting the stage for a protracted legal battle; Bertelsmann may now seek other concessions from CLT in an out-of-court settlement, though it is not entirely clear what those might be.

The dispute is not expected to undermine day-to-day business at RTL, which consistently pulls in the highest ratings in Germany’s 31-channel market. It averaged 18% of all viewers in the first half of this year and more than 20% in the 14-49 demo. Last year, it cleared more than $1.7 billion in gross ad revenues.

RTL also has the best access to upcoming Hollywood product through output deals it has clinched with MCA-Universal, the Walt Disney Co., Columbia-TriStar and, most recently, Warner Bros.

Those envious assets have prompted Bertelsmann, a global media concern, to seek command of the web from the current controlling shareholder, broadcast group Compagnie Luxembourgeoise de Telediffusion, now known as CLT Multi Media.

Bertelsmann, with more than DM 20 billion ($28 million) in revenues each year, has substantial but minority stakes in three German channels: Rupert Murdoch-controlled infotainment web Vox (24.9%), RTL (37.1%) and paybox Premiere (37.5%). But as the chief of Bertelsmann’s entertainment group, Michael Dornemann, told Variety, “The problem is, we don’t have the majority anywhere.”

Starting in mid-July, Bertelsmann went on maneuvers to change that by consolidating its shares in RTL with the minority stakes of three German publishers: Westdeutsche Allgemeine Zeitung (WAZ, 10%), Frankfurter Allgemeine Zeitung (FAZ, 1%) and Burda (2%).

The strategy is designed so Bertelsmann and WAZ buy out the smallest shareholders, then bundle their stakes in a common holding in order to jointly control 50.1% of RTL, to CLT’s 49.9%.

Such a realignment is technically against current ownership restrictions, though a much-awaited new media law is likely to change that. But more importantly, CLT this week stiff-armed Bertelsmann by convincing German courts to put the deal on ice and send the entire affair into major litigation.

At the moment, Bertelsmann’s Ufa and WAZ have each completed transactions to acquire Burda and FAZ’s stakes, but those acquisitions have not yet yielded any changes in the control of RTL.

The share realignment would have given the Bertelsmann-WAZ alliance the majority block of votes on RTL’s supervisory board, but CLT has argued in court that the acquisitions violate the shareholders’ original agreement, which it says explicitly guarantees the Luxembourg group the right of first refusal in the event of any share sale.

In a key preliminary hearing on Sept. 18, three judges in Hamburg regional court listened to four hours of arguments from both sides and decided that the dispute should go to trial, which could last years. Until then, Bertelsmann can neither exercise nor transfer its newly won voting power. That precedent is expected to apply to WAZ as well, though the legal proceedings have not advanced that far yet.

The clash embodies a historic rivalry between Bertelsmann and CLT, two very different companies whose partnership in German television has had its ups and downs. RTL was originally launched in the early 1980s as a Luxembourg channel, aimed only at a few neighboring areas of Germany. Back then it was CLT who secured the license and terrestrial distribution, and thus originally held the absolute majority in the company.

Later, when RTL was relaunched as a German channel with nationwide distribution in Germany, media regulators insisted CLT reduce its stake to a relative majority (49.1%) and that room be made for other shareholders – the publishers who are now being bought out.

The fact that Germany’s one real media powerhouse takes orders at home from a midsized foreign company has long been a thorn in Bertelsmann’s side.

Legally, the dispute turns on whether the right of first refusal applies when stakes are sold not to an outsider, but rather to another shareholder. “That is precisely the crux of the issue,” CLT’s lawyer in the case, Ludwig Leyendecker, told Variety. He claims the clause is universal; Bertelsmann’s Dornemann maintains the opposite.

Strategically, the matter comes down to something different, and as yet, undefined: negotiating leverage. Speaking to reporters in Guetersloh this week, a day before Bertelsmann released its annual numbers, Dornemann conceded that the stage is now set for key negotiation, but he wouldn’t be pinned down on what for.

“It goes without saying that we are ready to discuss,” says CLT’s head of TV activities Ferd Kayser, though concrete negotiations about an out-of-court settlement have not yet begun.

“We will not have our toes stepped on, in as much as we created and built this channel and have been its guiding force,” Kayser adds. “And we will not give in on the matter, in as much as three courts have (for the time being) confirmed our position.”

In Guetersloh, Dornemann said Bertelsmann was under no pressure to settle quickly and at one point commented: “I’d be happy if we fight about it for a few years.”

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