May 12 - British Sky Broadcasting says it is in early talks with Rupert Murdoch's 21st Century Fox over the possible acquisition of its pay-TV assets in Germany and Italy, Sky Deutschland and Sky Italia. Sonia Legg reports
British Sky Broadcasting, Sky Deutschland and Sky Italia - they share a name, but little else when it comes to programming. Rupert Murdoch's 21st Century Fox owns all of Sky Italia, 55% of Sky Deutschland and 39% of BSkyB. If the British arm were to buy Fox's German and Italian assets, it would unite Murdoch's European satellite holdings. Talks are already taking place, and could mean valuable savings, says Quentin Webb from Reuters Breakingviews. (SOUNDBITE) (English) QUENTIN WEBB, ASSOCIATE EDITOR, REUTERS BREAKINGVIEWS, SAYING: "There isn't much buying power you can get from operating across different markets, but there are other ways that combining these would be useful so you can commission new television series that can be made together by your Italian arm and your UK arm, for example. You can probably do things like move the companies onto a common IT platform, and you can take ideas from one business that are proving very successful so you could then export those to other bits of the empire." BSkyB says combined they'd be a "world class multinational pay TV group". Shares in Sky Deutschland rose 7% on the news. while BSkyB's fell 2%, suggesting shareholders have some concerns. (SOUNDBITE) (English) QUENTIN WEBB, ASSOCIATE EDITOR, REUTERS BREAKINGVIEWS, SAYING: "One very important issue for outside shareholders in BSkyB is whether this will prove a distraction so actually "Life is getting more complicated in the UK, BT is coming onto Sky's terrain and has bought some football rights already so you don't want to be distracted, you don't want to take your eye off the ball at home at this very important moment." Rupert Murdoch tried to take full ownership of BSkyB in 2010 but the bid was derailed by the phone hacking scandal involving his British tabloid the News of the World. The U.S. company later split in two, with media assets listed as 21st Century Fox and publishing as News Corp. Barriers to a deal include issues over TV soccer rights in Italy and regulatory concerns in the UK. No official values have been announced yet either, although some reports suggest the deal might be close to $14 billion.