Premiere, the German pay-TV broadcaster, plans to branch into free-to-air television as part of a deal under which it has secured the German rights to show the Uefa Champions League soccer competition for the next three seasons.

The deal is part of reforms at the broadcaster under chief executive and co-owner Georg Kofler, who has spent the past three years refocusing the business and returning it to profitability.

Losses of more than €1.2bn ($1.5bn) in 2001 at Premiere helped trigger the implosion of the Kirch media empire, one of the most spectacular collapses in German corporate history.

Cost-cutting and outsourcing since then helped preparations for its IPO in March - one of the few sizeable such transactions in Germany this year. The group has also increased its subscriber base in Germany and Austria to 3.3m.

Premiere's sports content is crucial to wooing viewers who have a wide choice of free TV channels. Premiere argues that low market penetration rates in Germany - well below the 40-45 per cent seen in the UK and France - leave plenty of room for expansion. It forecasts that it will have 4m subscribers by the end of 2007.

Many observers believe Germany's large range of free alternatives means viewers have little incentive to pay extra for content such as top football matches.

The company is paying an estimated €50m for each of the three seasons from mid-2006, beating commercial rivals ProSiebenSat.1 and RTL for the rights.

To assuage the concernsof sports bodies - which fear that viewers could be turned off if all matches are only available via pay-TV - Premiere has guaranteed it will broadcast 13 of the 125 matches each season on a free-to-air channel.

To do so, Premiere will have to diverge from its pure pay-TV model, by either launching or acquiring a rival channel.

Mr Kofler sought to ease concerns about the costs involved, saying Premiere would be able to promote its pay-TV offerings via the new channel.

Premiere shares fell 1 per cent on Tuesday.