BERLIN Germany’s antitrust watchdog looks likely to pull out the red card on Leo Kirch’s grand plan to market top league Bundesliga soccer rights.
Last year, the German Football League (DFL) agreed to give national soccer rights to Kirch’s company Sirius SportMedia in return for a guaranteed E3 billion ($4.3 billion) over six years, beginning in 2009.
Yet the agreement remains tied up at the Federal Cartel Office as regulators review the details of the deal, and specifically, the role of the DFL as the Bundesliga’s main marketer.
The probe could put a kink in Kirch’s ambitious plans to produce and sell ready-to-air Bundesliga coverage to pay TV broadcasters and cable companies.
Antitrust law experts have described Kirch’s plan as analogous to the recent Microsoft case, in which the software giant was blocked from bundling its Media Player with its dominant Windows operating system and sidelining competitors.
Even the DFL’s key role in marketing Bundesliga rights appears in danger in view of the Cartel Office’s track record, say local observers.
DFL and Kirch must wait for the watchdog’s decision, expected at the end of April, to find out what impact this will have on their plans.
Kirch has the most to lose from an unfavorable outcome. The media mogul is in the process of creating a European sports licensing, production and broadcasting giant by merging Swiss media group Highlight Communications and his Munich-based licensing company EM.Sport Media.
With its sports production division Plazamedia, EM.Sport would be the logical choice to produce Kirch’s ready-to-air Bundesliga shows.
If Kirch loses the biggest winner would be pay TV platform Premiere and Rupert Murdoch, its biggest single shareholder.
Premiere has been loud in its criticism of Kirch’s plan, and earlier this year filed a complaint with the Cartel Office charging that it was anti-competitive to force broadcasters to buy bundled Bundesliga programming.
Murdoch’s Sky Italia paybox recently took similar action in Italy, where it has filed a complaint with the European Union competition watchdog claiming recently introduced soccer-rights laws were unfair and allowed the sale of bundled rights packages, which force broadcasters to purchase product they might not want.
The regulatory difficulties underscore the often conflicting laws governing the sales of soccer rights in European countries.
Meanwhile, Premiere is expecting plenty of opportunity for synergy with News Corp., which wants to boost its near-20% stake to 23% before Premiere’s annual meeting in June, according to German weekly Der Spiegel, citing sources close to the company.
Premiere topper Michael Boernicke has said Premiere and Sky Italia would seek closer cooperation in the future. It’s also likely that Fox Channel Germany, which is set to launch here next month as a pay TV net on regional cabler Unitymedia and on its satellite platform arenaSAT, will find additional space on Premiere.
Boernicke also has hinted Premiere will likely enlarge its supervisory board to make room for a News Corp. rep.
Praising Murdoch, Boernicke says the mogul has provided Premiere with strong support, “especially in view of the Bundesliga rights sale.”