EM.Sport Media gets Q3 boost

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BERLIN -- Munich's EM.Sport Media continues to cozy up to ex-mogul Leo Kirch as EM moves closer to its goal of becoming an all-sports company.

In third-quarter figures announced Monday, EM said its sports business -- sports channel DSF, production division Plazamedia and online portal Sport1 -- was the driving force behind the 53.5 million euros ($78.3 million) the company earned in third-quarter 2007.

In contrast, EM's formerly core children's entertainment division earned just 600,000 euros ($878,000) in the third quarter, compared with 3.1 million euros in Q3 2006.

Overall, EM booked a 2.5 million euros ($3.7 million) net loss in Q3, compared with a 1.6 million euros profit over the same period last year.

EM.Sport Media CEO Werner E. Klatten attributed the drop to M&A activity -- most prominently the deal to buy a 36.4% stake in Swiss media group Highlight Communications from Kirch-owned holding company KF 15.

The first part of the deal -- handing EM.Sport Media 25.1% of Highlight -- went through last week.

In exchange for the Highlight shares, Kirch will receive an 11.5% stake in EM.Sport Media.

Highlight holds a controlling stake in leading German film producer-distributor Constantin Film but its most attractive asset from EM's perspective is sports rights division TEAM. TEAM holds the rights to several sporting events including those of the UEFA Champions League tournament of leading European soccer clubs.

The Highlight deal has led to speculation that Constantin Film may be up for sale, something Constantin management has vehemently denied.

The rumor mill has also seized on EM.Sport Media's recent acquisition of a small stake in satellite channel Premiere Star as evidence Klatten might be eyeing parent company Premiere, Germany's largest pay TV group.

Premiere certainly looks like a takeover target as its shares continue to slide. Premiere stock slipped another 2% in trading Monday to 10.07 euros ($14.7). Premiere shares have almost halved since late summer, when they were trading near 20 euros.

Once again, Leo Kirch is playing a major behind-the-scenes role in the Premiere drama. Kirch recently signed a 3 billion euros ($4.4 billion) deal to market the rights to Germany's top soccer division, the Bundesliga. Premiere needs the Bundesliga to feed its soccer-mad subscribers. Many see Kirch's Bundesliga deal as part of an overall bid for Premiere.

As Premiere's share price shows, investors aren't too bullish about the pay TV group's future should Kirch move in.
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