BERLIN — Deutsche Telekom is weighing an acquisition of pay-TV broadcaster Premiere as part of a long-term content deal that could benefit both companies.
Telekom is eager to find a content partner for its burgeoning T-Online Vision VOD service and a deal with Premiere could mean access to Premiere’s vast film rights.
According to unnamed banking sources cited by German press reports, Telekom is looking to secure the deal by taking a 25% stake in the paybox, which is currently valued at Euros 1.1 billion ($1.3 billion).
Premiere’s share price shot up nearly 9% to $18.43 on Thursday following reports of a possible take-over. The paybox saw its stock price plummet more than 40% in December after it lost Bundesliga soccer rights to pay TV upstart Arena, a subsidiary of regional cabler Unity Media.
Premiere’s fortunes looked set to dwindle as a result, but a deal with Deutsche Telekom could provide salvation.
Telekom’s T-Online division holds Internet rights to the Bundesliga and a pact with Premiere could allow the paybox to offer soccer loving customers at least some Bundesliga coverage and avert subscription cancellations.
German antitrust watchdogs would likely block a complete takeover of Premiere by the partially state-owned Telekom.
Telekom officials have confirmed that talks are taking place but declined to comment on possible takeover plans.
An agreement giving Premiere access to live Bundesliga Internet cover-age would face serious opposition from both Arena and the German Football League (DFL), however.
Unity Media topper Parm Sandhu recently warned that there are “strict limits” to the type of cooperation between Telekom and Premiere:
“We paid a lot more money for our Bundesliga rights than Deutsche Telekom,” he told the Financial Times Deutschland. “We of course know how to protect these rights.” But Sandhu added that it was “unimaginable” that Telekom would cross that limit.
DFL topper Christian Seifert, meanwhile, has said there can be only one pay TV offering.
Yet observers have noted that the status of Internet TV, or IP TV, remains in a legal gray zone in Europe since the European Commission has yet to determine what exactly IP TV is.