Premiere, Germany’s only nationwide pay TV platform, has warned it will not buy pre-packaged and produced coverage of top league national soccer following a deal between the German Football League (DFL) and media mogul Leo Kirch for the marketing rights to the Bundesliga.
The DFL agreed to give the rights to Kirch’s company, Sirius, for a guaranteed E3 billion ($4.2 billion) over six years beginning in 2009. Deal returns the 80-year-old Kirch to the limelight after the spectacular loss of his vast media empire five years ago.
The Bundesliga’s aim is to become less dependent on media and capital markets and to attract more potential bidders for the live broadcasting rights. The league said it hopes to see media sales rise to $4.8 billion between 2009 and 2015.
As part of the deal, Sirius and the DFL will establish a joint venture to produce and package live coverage of the games for pay TV broadcasters.
Kirch recently acquired an 11.5% stake in licensing company EM.Sport, which owns live sports production division Plazamedia, a onetime Kirch asset. In return, EM.Sport received Kirch’s 36.4% stake in Swiss sports and entertainment group Highlight Communications in a deal valued at $230 million.
Carsten Schmidt, Premiere’s head of sports programming, has warned that Premiere would not pay much if Kirch sells rights to various pay TV channels and would refuse produced and packaged coverage, adding that Premiere had a responsibility to its subscribers to provide independent sports coverage.
While Premiere is the only nationwide pay TV player, there are several smaller regional feevee channels that could benefit immensely from landing Bundesliga rights.
Premiere has long relied on exclusive rights to the Bundesliga to attract subscribers. In 2005 Premiere lost the lucrative rights to regional upstart rival Arena and its parent group, cable operator Unitymedia, which forked out some $300 million per season. The loss cost Premiere dearly — the paybox saw its share price plunge 45% to an all-time low.
Unable to attract its own subscribers, however, Arena struck a sub-licensing deal with Premiere.