COLOGNE — German TV can’t do without soccer — and vice versa — as the negotiations for rights to broadcast the national league prove.
The bankrupt Kirch Media pulled off a minor miracle when it managed to hang on to the rights at the end of June, despite losing a bidding war with Herbert Kloiber’s Tele Munchen.
It will pay the soccer league Bundesliga $574 million plus a one-off $49 million.
It has forwarded the primary broadcasting rights to its insolvent Kirch Pay TV division for its equally cash-strapped Premiere paybox, which relies on soccer to draw in sports-mad subscribers.
Secondary rights are still under discussion. They are traditionally reserved for pubcasters ARD and ZDF and Kirch’s own SAT1, but Kirch Media may give its sports channel DSF a larger piece of the cake.
So how did the bankrupt Kirch pull off this incredible coup?
It wooed the Bundesliga execs by giving them a coveted say on TV matters.
Under the new contract, the league can influence production and airing slots. Even more, it will get a 60% share in the additional proceeds generated from licenses and from paybox Premiere, and also has an option to participate in DSF as well as in Kirch’s Internet portal Sport 1.
Unsurprisingly, the Bundesliga was concerned about the future when Kirch Media filed for bankruptcy in April
It considered handling the licenses itself or establishing a web of its own.
“We always said we wanted to be in production,” says league spokesman Tom Bender, formerly a host at Kirch’s pay web Premiere.
“If, for example, Kirch had been unable to supply footage because of its outstanding debts with its suppliers, there wouldn’t have been any pictures for anybody, which is why we intended to hire camera teams ourselves.”
Cash-strapped Premiere is the only channel which shows live broadcasts from all league games — the main draw for its 2.4 million subscriptions.
Kirch Media allegedly used this dependence to keep the paybox in line. It threatened not to waive Premiere’s considerable debts if the paybox bought soccer rights from Tele Munchen.
Indeed, Premiere’s topper Georg Kofler publicly declared there was no way Premiere would buy the soccer rights from Kloiber if he won the tender.
The prospect of losing Premiere as a platform forced Bundesliga to stay with Kirch Media.
It was also a relief to the banks who granted Premiere another $100 million loan to stay afloat.
Still, Kirch needs to watch the maneuvers it uses to boost its own operations.
Last year, it annoyed many soccer fans by moving popular sports show “Ran” on terrestrial TV web SAT1 from Saturday 6 p.m. to 8 p.m., hoping to get more subscribers for its live afternoon broadcasts on Premiere.
The plan backfired when SAT1 lost primetime auds without winning new subscribers for Premiere.
Meanwhile, the handling of terrestrial TV vs. pay TV rights may remain a bone of contention when it comes to the rights for the next World Cup, also owned by Kirch Media.
For the first time, two-thirds of the tournament this year was aired exclusively on Premiere, and only one third was sold to the pubcasters.
“For us, it has always been a problem that one firm had a grip on the world cup rights and could dictate what people could see,” says ARD topper Fritz Pleitgen.
He added that ARD was ready to buy the rights if Kirch defaulted, and even would share them with commercial webs at purchase prices.
An internal paper cited in the German press emphasized the significance of soccer rights to ailing Kirch.
According to the paper, Kirch expects a profit margin of $570 million from the sales of World Cups 2002 and 2006, and that it also intends to secure the license for the games in 2010.