AMSTERDAM — European channel launcher SBS Broadcasting and European private cable company United Pan-Europe Communications have announced a significant broadening of their strategic relationship that will make UPC the largest shareholder in the decade-old SBS.
On a fully diluted basis, UPC will boost its share in SBS to 18%, giving it more shares than the company’s founder and CEO, Harry Evans Sloan, who has 11%. UPC is the largest private cable company in Europe, while SBS has a necklace of channels stretched across Western Europe, as well as operations in Hungary.
The two companies had earlier agreed to a programming partnership and to explore the possibility of launching new channels and Internet ventures, but the new agreement creates a broadly integrated partnership across new and traditional media that is unparalleled in Europe today.
“We are sending a signal to the markets that both of us are very much a part of the new-media world of today and tomorrow,” Howard A. “Woody”Knight, vice chairman, chief operating officer and director of SBS, told Daily Variety.
Under the new partnership, SBS and UPC will launch two new joint ventures, one to create four separate subscription television channels, another to develop entertainment portals and content for European Internet users.
The four new channels, jointly owned and operated by SBS and UPC, will be developed initially for the Benelux but later rolled out to other cable operators across Europe and to UPC systems in other countries.
In addition, UPC, SBS and ZeniMax Media, SBS’ U.S.-based Internet technology and content partner, will jointly develop a number of European entertainment portals and related Web sites. The portals will be made available through Chello Broadband, UPC’s high-speed broadband Internet service provider, as well as other providers. Significantly, Microsoft also has a 7% share in UPC.
The deal also includes UPC joining SBS and the quasi-private European Bank for Reconstruction and Development (EBRD) in taking a stake in an SBS affiliate company, European Broadcasting System (EBS). That company’s sole purpose is to develop broadcasting investments in Central and Eastern Europe.
UPC is majority-owned by the Denver based UnitedGlobalCom. Both UPC and SBS trade on the Nasdaq and Amsterdam stock exchanges.