Murdoch Vies to Increase German Stake

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Cologne, Germany --Rupert Murdoch's appearance
at the Medienforum conference here last week didn't disappoint attendees, as the
media magnate proclaimed his intention to get more deeply involved in the German market,
possibly by taking control of German network Vox.

Murdoch's News Corp. already holds a 49.9 percent
stake in the general-entertainment channel, but he said he would like to buy out his
partners -- CLT-Ufa and Canal Plus -- and to try to increase Vox's viewership share.

CLT-Ufa, owner of 24.9 percent of Vox, immediately said
that it was not willing to sell its share to Murdoch. CLT-Ufa is already in control of
strong German broadcast network RTL, the No. 1 German channel, and it doesn't want a
stronger Vox, which could hurt RTL. Murdoch is perceived as wanting to take control of Vox
to use it as a linchpin for a pay TV bouquet.

"Murdoch called into the woods, but there will be no
echo," said a source at Bertelsmann AG, the partner in CLT-Ufa that has management
control of the German activities of the joint venture. Canal Plus, which also owns 24.9
percent of Vox, said it has no intention of selling to Murdoch, either.

But some German media observers here speculated that a game
of musical chairs may ensue in which stakes in several German TV interests are shifted
around.

Canal Plus earlier pulled out of pay TV service Premiere,
and it has said that it may sell its shares in Vox, but it is unlikely to offend partner
Bertelsmann by selling the stake to Murdoch. Even if Canal Plus did sell, CLT-Ufa would
still be in a fairly strong position in Vox. When Murdoch joined the shareholders of Vox,
Bertelsmann maintained management rights going far beyond the influence of an ordinary
24.9 percent shareholder.

Sources close to Murdoch are convinced that the global
media mogul will provide some surprises in Germany. It is still possible that he may
become a player in digital TV, together with Bertelsmann and The Kirch Group. Negotiations
between Kirch and Murdoch are still going on, sources said. "If [Kirch Group chairman
Leo] Kirch talks to another media group, he has to talk to many, but with Murdoch, it can
click much easier," observed one German media source.

It has also become apparent that Murdoch is working hard to
build up strong relationships in German political circles. Besides meeting with Wolfgang
Clement, the prime minister of Northrhine Westfalia, Murdoch also talked with Gerhard
Schroeder, whom many believe will become Germany's next chancellor this fall.

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