News

Murdoch Adds Germanys TM3 to Portfolio

11/15/1998 7:00 PM Eastern

Frankfurt, Germany -- Rupert Murdoch's News Corp. has
taken over a stake in women's channel TM3 in Munich, Germany, for an estimated $US60
million.

Last summer, Murdoch announced that he was interested in
making a major, new investment in Germany, leading most to speculate that he would try to
increase his 49.9 percent stake in music channel Vox.

However, his ambitions to take control of Vox were stymied
by the channel's co-shareholder, media company CLT-Ufa, which is controlled in
Germany by Bertelsmann AG. Bertelsmann fears that if Murdoch gets control of Vox, its
competing channel in Germany, RTL, would be hurt.

While Murdoch fights that battle, he has also opted to
invest in TM3, a money-losing channel with a tiny audience share. The size of the stake
and the price were not revealed when the deal was confirmed Nov. 8. However, sources
indicated that Murdoch acquired a 66 percent stake in TM3 from its owner, TeleMünchen,
for less than 100 million deutsche marks ($US60 million).

Early this year, rumors also circulated in Germany that
Murdoch was preparing to launch his Fox Kids channel in the country, possibly by taking
over the failed Nickelodeon Germany channel, which shut down May 31.

Herbert Kloiber, owner of TeleMünchen, confirmed that some
element of children's programming will be introduced on TM3. But TM3 general manager
Jochen Kroehne said the channel won't be turned into a full children's channel.

"We had the idea ourselves to place children's
stuff during the daytime, in the slot in which we now run daily soaps," he said.
"This was decided some time ago, when Nickelodeon was shut down."

Specific news on the future programming plans of TM3
probably won't come before the end of this month, when the next shareholder meeting
is scheduled. Kloiber said he believes that an improved TM3 could achieve an audience
share of 2.5 percent, and that it could break even by 2001.

TM3 has struggled, with an audience share of less than 1
percent. Kloiber didn't say how much is invested in the channel, but its losses are
estimated at DM250 million ($US150 million).

German sources indicated that Kloiber might be interested
in swapping his stake in RTL2 for CLT-Ufa's stake in Vox, which would be a way for
his new partner, Murdoch, to achieve control of Vox.

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