[A-List] Germany: Kirch crisis

[Keaney Michael]

German broadcasters warn against Kirch move
By Hugh Williamson in Berlin
Financial Times: March 27 2002

Germany's main public broadcasters warned on Tuesday that a takeover of KirchMedia by Rupert Murdoch, Silvio Berlusconi and other foreign investors would disrupt the country's media landscape.

Peter Voss, deputy head of ARD, the leading public broadcaster, said "it would be regrettable" if the current balance between private and public-sector media organisations "would be seriously damaged" by the entry of a foreign player.

He warned that Kirch might be reduced to being "the German affiliate of a [media] tycoon who is uncompromising in politics and business".

Markus Schachter, head of ZDF, the second national public channel, said "it would be good for [German] television if Kirch remains active in the sector".

Government and opposition politicians, media officials and some television executives have long been concerned that a foreign takeover of Kirch would disrupt the balance of power between public broadcasters and the private channels of Kirch and the Bertelsmann media company.

Gerhard Schroder, German chancellor, called this year for a "national solution" to Kirch's financial problems. But he has also stressed Germany's openness to foreign investors and met Mr Murdoch last month to discuss his German plans.

Any move by Murdoch or Berlusconi to enter Germany "would need to be checked thoroughly regarding German regulations and cartel rules", according to a spokesman for the opposition Christian Democrats.

There are fears that the entry of Mr Murdoch or Mr Berlusconi would undermine journalistic and quality standards.

Wolf Dieter Ring, head of the regulatory body for private television in Bavaria, where Kirch is based, said foreign companies "would have to stick to German rules" and licences would only be issued on this basis.

He stressed that broadcasting standards "have a special status [in Germany] that is not directly comparable with the situation in the US, Australia or Italy".

In spite of such concerns, politicians and business leaders indicated that a foreign takeover of Kirch would be preferable to the company's collapse.

Erwin Huber, media minister in Bavaria, said the priority now "was on retaining the [Kirch] companies and the associated jobs in the media metropole of Munich".

Reinhard Durfler, head of Munich's chamber of commerce, said: "One can debate whether Murdoch and Berlusconi represent the most desirable combination for Kirch but we are in principle not against foreign media players coming here."

More broadly, Norbert Schneider, chairman of the association of regulatory bodies for private broadcast media, said the entry into Germany of Murdoch or Berlusconi could have a positive impact as it could break down the often cosy "understandings" between the main television broadcasters and make the market more economically competitive.

Full article at:
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3K64A4AZC&live=true&useoverridetemplate=ZZZ3XDHE90C&tagid=ZZZA31PK20C

Michael Keaney
Mercuria Business School
Martinlaaksontie 36
01620 Vantaa
Finland

michael.keaney at mbs.fi