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Last Updated: Tuesday, 10 January 2006, 16:24 GMT
Axel Springer's TV deal blocked
ProseibenSat1.Media head office in Munich
Axel Springer has warned it will abandon the deal and look abroad
German newspaper group Axel Springer's plan to reshape the nation's media landscape with a move into TV is hanging in the balance.

The media watchdog on Tuesday rejected Springer's bid for the country's biggest broadcaster ProSiebenSat.1.

Germany's competition authority, the Federal Cartel Office, is due to give its verdict later this month.

The watchdogs are concerned Springer will exert too much influence over the market and wants it to sell assets.

"The strong position of the ProSiebenSat.1 group in national commercial television would lead, above all in combination with the phenomenal position in the daily press of Springer to a domination of public opinion," the German Commission on Concentration in the Media (KEK) said in a statement.

The watchdog said that Springer had rejected its recommendations of how the bid should be changed.

Springer is said to be mulling options, and has threatened to abandon the bid.

What they've overlooked is a global shift in media into digital distribution... as though that were some delusion of New Economy yuppies gone wild
Mathias Doepfner, Axel Springer chief executive

It has warned that it will look abroad for acquisition opportunities.

Other firms including France's TF1 have expressed an interest for ProSiebenSat.1.

Two-horse race?

Springer agreed in August to pay 2.47bn euros ($2bn; 1.4bn) for the broadcaster.

The deal would have made Springer Germany's second-biggest media company behind Bertelsmann, and the watchdog is worried that the two firms would have a virtual duopoly of the advertising market.

Axel Springer chief executive Mathias Doepfner has accused the regulators of being short-sighted and of not understanding the changing environment media companies now have to operate in.

"What they've overlooked is a global shift in media competition into digital distribution markets - as though that were some kind of delusion of New Economy yuppies gone wild," Mr Doepfner complained.

"This opinion is not only false, it's negligent," he added.

Regardless of Mr Doepfner's view, the watchdogs have indicated that they will only allow the deal if Springer sells either its Bild newspaper operations or breaks up ProSiebenSat.1.

Press reports have speculated that Springer is mulling whether or not to sell either the ProSeiben or Sat.1 television channels to SBS Broadcasting.


SEE ALSO:
Springer deal faces fresh hurdles
18 Nov 05 |  Business
Springer buys top German TV firm
05 Aug 05 |  Business


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