Today’s Financial Times reports that Rupert Murdoch, chairman of News Corporation, is believed to be considering a full takeover of Kirch Gruppe, the German media giant with a majority stake in F1 TV rights owner SLEC. The deal would make Murdoch the most powerful broadcaster in Europe.

German media group Kirch recently upped its stake in SLEC from 36.8% to 58.3% while EM.TV and Bernie Ecclestone hold the remainder.  It is believed in some circles that Kirch wants to take Formula One TV coverage exclusively on its pay-television service, a move strongly opposed by F1’s engine manufacturers.  The huge viewing figures attracted by Formula One coverage on free television is crucial to maintaining support from sponsors, who seek exposure to as wide an audience as possible.  Kirch has denied any intention to eliminate free-to-air coverage of Formula One races.

According to the FT, Kirch is billions of dollars in debt and Murdoch currently has an option for Kirch to buy him out of his 22% stake in Premiere, Kirch’s pay-TV business.  His stake could be worth as much as $1.8bn and Kirch would struggle to pay if this option was exercised, possibly leading to a Murdoch takeover of Kirch Pay-TV or the forced collapse of the Kirch empire, which would open talks for control of the whole group. Murdoch’s option can only be exercised on October 1 2002.

Read the full analysis on ft.com