Tom Mockridge, the chief executive of Rupert Murdoch's Sky Italia, told the chief executive of Al Gore's Current TV over lunch that there would no problem with the channel renewing its television distribution deal – less than two weeks before abruptly announcing that the liberal news channel would have no choice but go off air.
Mockridge was also accused of making a "sham offer" to Current TV – to make it look like News Corporation, Sky Italia's owner, was engaged in normal commercial negotiations – when in fact the Murdoch-controlled media group had decided to drop the channel for what Current TV claimed are political reasons.
Joel Hyatt, Current TV's co-founder and vice-chairman, told MediaGuardian.co.uk: "One week Mockridge was telling me 'let's get this deal done' then a few days later he rings to say actually 'I'm not renewing you at all'. We then learnt from a senior executive at Fox that we've been dropped because of an order from News Corporation."
Last week Al Gore, the former US vice-president and chairman of Current TV, accused News Corporation of "an abuse of power". He said they had been told News Corp had decided to drop Current TV from its Italian pay-TV service because the channel was about to launch a show presented by liberal US commentator Keith Olbermann, a Murdoch critic.
News Corp, however, countered by saying it had taken the decision on purely commercial grounds and said Current TV had "asked Sky Italia for double the carriage fee when primetime viewing had fallen by 40% in the past year" and that "it had nothing to do with politics".
In an attempt to refute News Corp's argument, Hyatt highlighted the sudden changes of tack by News Corp in the past month. Hyatt said he met Mockridge for a friendly "four-hour lunch" at the Locanda Chiaravalle restaurant on the outskirts of Milan on 8 April – in which the News Corp executive gave him the impression he was keen to renew.
Hyatt then returned to the US where he received another positive email – but the tone dramatically changed in a 21 April phone call where Mockridge this time said Current TV's contract would not be renewed.
That was followed by a letter from Mockridge dated 22 April which said: "As anticipated via telephone, we are confirming, that unfortunately given severe and unexpected budget constraints, we are not in a position to negotiate a new carriage agreement."
Current TV executives tried to get the decision reversed, holding a meeting with James Murdoch, News Corp's deputy chief operating officer who oversees its European businesses, on 10 May in Los Angeles. Hyatt said that he was told by Murdoch that he would look into the matter, which in turn prompted renewed contact with Sky Italia.
During these brief negotiations, Current says it sought a 33% increase on the €3.3m (£2.9m) a year it was being paid, only for the News Corp subsidiary to respond by saying the fee should be cut by two-thirds.
Hyatt told MediaGuardian.co.uk that "the offer they made was a sham offer, purely to suggest they were engaged in negotiations when in fact they were not". Current TV rejected the offer, with the result that the TV station will go off air in Italy at the end of July.
News Corp insiders reiterated that the decision to offer Current TV a cut price deal reflected commercial realities, and that its conduct had – as per previous statements - "nothing to do with politics".
Sky Italia, responding to this story, has issued the following statement: "In the interests of accuracy, Sky Italia wishes to point out that there is absolutely no truth in the above article's assertion, reporting the comments of Mr Joel Hyatt, that Sky Italia has broken any agreement whatsoever with Current TV. Current TV's contract with Sky Italia came to its natural conclusion and was not renewed after the channel failed to meet its pre-agreed performance criteria.
"It is also untrue that Sky Italia made a 'sham' renewal offer to Current TV. On the contrary, Sky Italia's offer accurately reflected Current TV's independently audited viewership figures and the final choice not to proceed with this economically reasonable proposal was Current TV's and Current TV's alone."
This article was updated on 27 May 2011 to include a response from Sky Italia.
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