Kirch,CLT-Ufa deal unsteady

Commission may delay merger decision until June 3

BERLIN — A rift has developed between would-be digital pay TV partners Leo Kirch and Bertelsmann-affiliated CLT-Ufa: Kirch has agreed to an additional set of conditions from the European Commission, while CLT-Ufa has refused, German wire service DPA reported Tuesday evening.

Following the announcement on Monday that a committee of antitrust authorities from the European Union member states had voted to reject the groups’ German digital pay TV merger plans, Leo Kirch and Bertelsmann board member Michael Dornemann traveled to Brussels for last-minute talks with European competition commissioner Karel van Miert.

If the deal collapses, Kirch has far more to lose than CLT-Ufa. Kirch’s DF1 digital pay TV platform, which was to merge with established pay TV web Premiere, would be forced to shut down. The media mogul would also find it difficult to refinance his pay TV output deals with the Hollywood majors.

Bertelsman prepares

CLT-Ufa, however, says it will concentrate on building up a digital form of Premiere in case of a veto. Bertelsmann execs said last week they would accept no more conditions from the commission, claiming further concessions would jeopardize Premiere’s economic viability.

The European commissioners are expected to vote on the merger today, but the commission may delay its decision until the final deadline of June 3.

European antitrust officials fear that Kirch and CLT-Ufa, the two most powerful players in German commercial television, would monopolize German pay TV. But the commissioners may also weigh larger structural questions when considering the fate of the alliance. Of the 20 commissioners, four are currently believed to support the merger.