Berlusconi deals Sky Italia a blow in web war

ROME — Italian Prime Minister Silvio Berlusconi’s Mediaset broadcast group has dealt Rupert Murdoch’s Sky Italia a major blow by snapping up rights to matches played by three top Italian soccer clubs, Berlusconi’s own AC Milan as well as InterMilan and Juventus.

The first clear strike in a war of the webs, Italy’s top commercial terrestrial network has paid E86 million ($104.6 million) for cable, digital terrestrial and new-media rights to the three key series-A teams through 2007.

More important, Mediaset also purchased an option for all broadcasting rights — including encrypted satellite — for 2007-08.

Sky Italia’s encrypted rights to Milan, Inter and Juventus matches expires in 2006. Now the paybox will have to negotiate a deal with Mediaset for its subs to see those games in 2007 and beyond.

Sky Italia had no comment Tuesday.

Sky Italia became Italy’s single pay TV operator last July following long-awaited approval from EU antitrust regulators who ruled Sky could hold only satellite pay TV rights to soccer — and not cable, terrestrial digital or any other rights — and only for limited periods.

With Italy gearing up for terrestrial digital broadcasting, Mediaset may compete head-to-head with Sky soccer in 2005.

By that time, the commercial web will be offering its newly purchased soccer fare in digital terrestrial pay-per-view.

But large-scale success for that groundbreaking initiative remains unrealistic, since the country has no more than 500,000 digital decoders, despite incentives from the government, which is shooting for a 2006 switchover.

Since its launch, Sky Italia has made soccer a key part of its bouquet. The nascent paybox has 2.6 million subs and is struggling to reach its 3.5 million viewership goal.

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