Al Gore's Current says Sky Italia dropped it over Olberman

NEW YORK (Reuters) - Former Vice President Al Gore's Current TV cable network has claimed Rupert Murdoch's Italian satellite TV company dropped the network in Italy because it hired liberal politics news anchor Keith Olbermann.

News Corp, which controls Sky Italia, has said its dispute with Current Italy had nothing to with politics and is purely about money. It said Current had asked Sky Italia to double the carriage fee.

But Current Executive Vice Chairman Joel Hyatt said on Thursday that Current Italy had asked Sky to raise its carriage by 2 euro cents per subscriber -- around 33 percent -- in line with an increase in viewer ratings in 2010.

Hyatt said he had amicable early talks with Sky Italia CEO Tom Mockridge over reaching a deal in time for a May 7 deadline, when its previous agreement expired.

"We were told by a very senior News Corp source that the order came from New York because we had hired Olbermann," said Hyatt.

Murdoch's son James who runs News Corp's international operations recently moved to New York after being promoted to deputy chief operating officer.

Gore is currently in Italy and has appeared on talk shows and is speaking out against the decision, according to a Current TV spokeswoman.

Sky Italia and News Corp said in separate statements that Current TV's viewer figures had been falling, meaning it could not justify much higher fees.

"Current TV asked Sky Italia for double the carriage fee when prime-time viewing had fallen by 40 percent in the past year," said the News Corp statement. "Sky Italia's offer was in line with the market and reflected the performance of the channel. It had nothing to do with politics."

A former sportscaster for Murdoch's Fox and ESPN, Olbermann often took aim at conservative politicians and had a long-running dispute with News Corp's Fox News.

Olbermann abruptly parted ways with MSNBC in January just three months after he was suspended for campaign donations to the U.S. Democratic Party. Olbermann had been responsible for MSNBC's highest rated show "Countdown" which he is expected to launch on Current next month.

In February. Murdoch was asked on Fox Business if he'd consider employing Olbermann again after his run on Fox between 1998 and 2001.

"No, we fired him once, we don't believe in firing people twice," said the media mogul.

(Reporting by Yinka Adegoke, editing by Bernard Orr)