Merger talks amongst Europe?s biggest pay TV companies, the UK?s BSkyB and France?s Canal Plus, have hit deadlock over control issues.
Rupert Murdoch, who controls 40 per cent of BSkyB met with Canal Plus?s chairman Pierre Lescure in Paris to discuss the possibility of an ?alliance? to create a major heavyweight European pay TV company.
Talks are believed to have broken down, however, over Canal Plus?s insistence that the merged entity would have to remain French and be given a dominant management role.
It also wanted an undertaking that all its, "engagements for cultural productions in Europe" are fully respected. Canal Plus is determined that European television is dominated by local productions, rather than foreign imports.
In a statement from Canal Plus, the French TV company said that, "on these prerequisites no decision has been taken."
It went further and said that, "as long as they are not accepted, no further talks will take place on the other parameters of the alliance." A full merger has been mooted to be worth around #14 billion to #18 billion.
BSkyB was unavailable for comment over the merger talks.
Analysts, however, believe that a full merger would not get past regulators - but have not ruled out a partnership of some kind.
The possible merger has already gained the attention of the French parliament. Yesterday the country?s cultural minister, Catherine Trautmann, said that she was worried about a possible tie up between the two TV giants on grounds of "national and European cultural sovereignty". She said she would be watching the situation very carefully.
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