Germany’s football bosses have rejected Premiere’s bid to screen live broadcasts of matches from August 2006 to June 2009, sending shares of the pay-TV operator plummeting.
The DFL soccer league awarded the three-season contract to a group of cable-TV companies and gave first-time rights for live internet relays to Deutsche Telekom, setting the stage for a new rivalry between these media.
Premiere shares, issued in March, lost as much as 45 per cent of their value to hit a record low of €12.55.
Georg Kofler, chief executive, dismissed speculation that the 27-channel company, which currently screens Bundesliga matches, could lose large numbers of its 3.4m German subscribers.
The company hopes other soccer rights, like those for the Champions League and the World Cup, as well as films and soft porn, will help it overcome the setback.
“Our model won’t change,” Mr Kofler said, adding that Premiere would soon have 3.6m subscribers.
Having paid €180m ($213m) per year as sole bidder in late 2002, Mr Kofler was prepared to pay more than €300m a year for the rights, provided DFL got popular highlights on ARD public TV moved from early to late Saturday nights.
Afraid of upsetting their sponsors, the 36 Bundesliga clubs backed a slightly lower offer from Arena, owned by cable operator Unity Media.
It is in talks with Kabel Deutschland, the biggest cable company, to share the rights. Werner Hackmann, DFL president, said Premiere had pressed for too much exclusivity.
The league went for a package worth €1.26bn over three years – still 40 per cent more than at present – for all rights. Arena stumped up three-quarters of the sum, industry executives said, while DT contributed one-tenth of the amount.
Free-TV operators ARD and DSF, owned by EM.TV, made up the rest in order to secure access to highlights from all games.
Cable-TV and telecoms companies as a result will vie for the same customers for the first time. The companies hope to win users for networks that could soon offer TV, telephone and internet services in one – so-called triple-play packages.
Some 20m households receive cable TV, though the infrastructure operators have yet to upgrade the lines to take two-way data traffic needed for the internet.
DT has about 7m internet customers with digital subscriber lines fast enough to handle TV pictures. From late 2006, it wants to spend €3bn on a new fibre-optic network in 50 cities to handle triple-play services.