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Hamburg (dpa) - The multi-billion-euro merger of Germany's biggest newspaper and magazine group, Axel Springer, with a television broadcaster could be more palatable if a major TV channel is hived off to another buyer, a German monopoly official said Thursday.
A controlling interest in stockmarket-listed ProSiebenSat.1 Media has been offered for sale by investors led by Haim Saban, the former Israeli concert agent whose savvy deals have made him a billionaire.
However both a media watchdog in Germany, the KEK, and the Federal Cartel Office have warned that the Springer-TV tie-up would be too dominant. On Wednesday, Springer suggested selling off one channel, ProSieben, while keeping the broadcaster's SAT.1 network.
Ulf Boege, president of the Cartel Office, told Hamburg radio station NDR-Info, this might make the deal acceptable, since it would end the "duopoly" in the German market for television advertising.
"This would be such a significant improvement for this market that it would outweigh the remaining criticisms," he said.
The TV group and its rival RTL are Germany's two main commercial broadcasters. Two major public broadcasters also air ads, but their commercial breaks are tightly rationed. But Boege said any demerger would have to take place before Cartel Office approval, not after.
ProSieben, which is aimed at under-50 viewers, had an average audience of 6.7 per cent in Germany last year, below the 10.9 per cent of SAT.1 which is aimed at a middle-brows of all ages.
The prospect of a third commercial TV bloc being established in Germany prompted a wave of share buying Thursday. Shares in pay TV company Premiere surged in Frankfurt before settling back to 14.20 euros at close, a gain for the day of 0.4 per cent.
ProSiebenSAT.1 Media shares closed in Frankfurt at 16.54 euros, a fall of 0.3 per cent.
Management at ProSiebenSat.1 Media expressed alarm at a break-up. The two channels had merged in 2000. A spokesman for the TV group said it was not a party to the talks with the Cartel Office.
Industry sources said current management would probably resign if shareholders demanded a demerger. ProSiebenSat.1 chief executive Guillaume de Posch appealed Thursday in an e-mail to all staff to keep calm, saying no decisions had been taken yet.
The group owns three other smaller national channels, Kabel eins, Neun Live and N24.
Germany's media watchdog KEK had rejected the original 2.5-billion-euro (3-billion-dollar) takeover on Tuesday and the Cartel Office is next in line to give its verdict. At the office in Bonn, a spokeswoman said a ruling was due by January 20.
"It could pronounce earlier," an office spokeswoman said, explaining that the Cartel Office sometimes gives its blessing to mergers when it agrees to conditions that limit their impact.
KEK rejected the move on the grounds that the proposed merged media company would wield too much power over public opinion.
The Cartel Office had previously called on Springer to sell either its flagship newspaper Bild, which is Europe's biggest daily, or TV interests operated by Munich-based ProSiebenSat.1.
In the wake of the KEK ruling, Springer's chief executive Mathias Doepfner indicated that the media group would invest more strongly outside of Germany if regulatory authorities continued to block its planned ProSiebenSat.1 takeover.
Copyright 2006 dpa Deutsche Presse-Agentur GmbH
