Deutsche Telekom makes play for soccer

Cash-strapped Kirch currently holds rights

BERLIN — Insolvent TV group Kirch Media is about to dial up $75 million in from its acquisition of German national league soccer rights.

Deutsche Telekom wants to buy fixed and wireless Internet rights to soccer, which the telco will exploit next year when it introduces Universal Mobile Telecommunications System (UMTS) technology into the market.

Users will be able to watch digital video content on “third generation” phones and hand-held computers.

German soccer could be a content coup for Deutsche Telekom, which, like other German telecommunications players, paid nearly $50 billion to the government for new UMTS frequencies in 2000. The telco could also offer the soccer coverage to its fixed Internet subscribers.

Sources put prices for wireless rights at $25 to 40 million per year, while fixed Internet rights are said to be an extra $30 to $35 million.

However, Deutsche Telekom could face problems with German and European anti-trust watchdogs since the rights could radically boost its position as a major telco player before the technology is even on the market.

Despite its own bankruptcy, Kirch Media managed to beat rival bidders last month and keep the rights to German Soccer League matches; company is paying $282 million per season — 25% less than last year.

The soccer rights have also secured more bridge financing for Kirch pay web Premiere. The acquisition was a crucial condition for creditor banks to provide a $98 million loan to keep the broadcaster operational through the summer.

Premiere has reportedly also made progress in renegotiating licensing deals with Hollywood partners, including Rupert Murdoch’s 20th Century Fox. Murdoch owns 22% of Premiere parent Kirch Pay TV.

Premiere CEO Georg Kofler is looking to turn the web around by 2004 with significant cuts in programming costs, the main trigger of Premiere’s nearly one billion dollars in losses last year.

Potential new investors include Hollywood studios, which are among Kirch’s biggest creditors, like Warner Bros. and Paramount, as well as U.S. cabler Liberty Media.

Meanwhile, bankrupt media mogul and erstwhile topper Leo Kirch continues his battle against German publisher Axel Springer.

Kirch, a Springer shareholder, is calling for an ad-hoc general meeting to review his demands for an investigation into Springer’s put option that triggered the collapse of his media empire. Springer earlier this year demanded a refund for its $725 million stake in Kirch’s main TV unit ProSiebenSat1 broadcasting group, rejecting Kirch’s offer to swap the put option for a bigger stake in the unit.

An impromptu general meeting could take place by mid-August.

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