Jean-Marie Messier and Rupert Murdoch are today expected to announce that Vivendi Universal will have two-thirds of a new joint venture in Italian pay-TV.
Terms of the new venture which will be born from the merger of Vivendi Universal's Telepiu and the News Corp-controlled Stream may be detailed this afternoon following a Vivendi board meeting.
According to Vivendi boss Messier in an interview in Les Echos, Telecom Italia will take full-control of free-to-air broadcaster Tele Monte Carlo (TMC) and withdraw from Stream. That will then leave News Corp and Vivendi free to pool their loss-making interests in a single platform. It is to retain the Telepiu brand name.
"We have concluded an agreement for the merger of Telepiu with Stream on the basis of the relationship between the existing subscribers. Canal Plus will hold two thirds and Rupert Murdoch a third,'' Messier told the paper. With 1.8 million customers of a combined 2.6 million Vivendi will get 66% and News Corp 34%.
According to unconfirmed reports News Corp may invest a further $500m to increase its stake to 50%.
The two competing operators, which have been waging a cut-throat war for exclusive Italian soccer rights, are drowning in red ink -- a Euros 200m loss in 2000 for Telepiu and Euros 400m loss for Stream, which also incurred heavy start-up costs since Murdoch bought into it last year.