The share price of News Corp.-controlled Premiere, Germany’s biggest pay TV operator, halved on Friday to E4.60 ($6.40) after it issued a profit warning and admitted that it had nearly 1 million fewer subs than shown on the books.
Premiere’s new topper Mark Williams revealed late Thursday estimated operating losses of between $56 million and $98 million this year and subscriber figures of 2.4 million, compared to the 3.5 million reported in June.
The company had previously included in its numbers terminated contracts and deals it had yet to sign.
Chief financial officer Alexander Teschner immediately resigned; Williams is taking over his duties until a replacement is found.
“We’re thoroughly examining all areas of the company and are confident that this will result in a new strategic direction with a financially sound business plan that will support further growth and profitability for Premiere,” Williams said.
Premiere plans talks with banks on restructuring its loans. No capital increases are planned.
News Corp. is the paybox’s single largest shareholder, having upped its stake to 25% since the beginning of the year.
Three weeks ago James Murdoch, News Corp. chairman and CEO for Europe and Asia, tightened his control of Premiere, replacing topper Michael Boernicke, who ankled suddenly, with Williams, who had been News Corp. finance chief for Europe and Asia.
If Murdoch decides to buy more than 30% of Premiere he will be legally obligated to make a takeover offer to the feevee’s minority shareholders.
Nearly 38.5% of the paybox is publicly traded, with the remainder owned by several private equity firms and Premiere execs.
Ironically, the share slump could be a good time for News Corp. to up its stake at a lower cost.
Premiere’s share price has seen volatile swings in the past — such as when it lost the rights to broadcast the Bundesliga, the top German soccer league.
The future of the Bundesliga is up in the air after the local antitrust watchdog nixed a deal between the German Football League and media mogul Leo Kirch, Premiere’s one-time owner, to jointly market the rights.
The ruling could benefit Premiere by leaving it the only viable player to pick up the soccer rights.