Premiere, ARD face off over soccer rights

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COLOGNE, Germany -- For German soccer fans -- essentially the country's entire male population -- the wait is over. Top soccer division the Bundesliga kicks off Friday with the season opener between title defender VfB Stuttgart and Schalke 04.

But behind the scenes, another titanic face-off is under way -- a battle between German pay TV group Premiere and public broadcaster ARD over Bundesliga broadcast rights.

Premiere recently won back Bundesliga pay TV rights from competitor Unity Media in a sublicensing deal that will see Premiere pay €100 million ($138 million) per season for the 2007-08 and 2008-09 seasons. As part of the deal, Unity Media also took a 17% stake in Premiere, a stake currently valued at about €320 million ($440 million).

But as part of Unity Media's original deal with German soccer association the DFL, Premiere has to split the rights with ARD. Premiere carries all Bundesliga matches live on pay TV. ARD airs match highlights shortly after the final whistle on its top-rated "Sportschau" program.

It is a setup unique in Europe. In countries such as France, the U.K. or Spain, top-league soccer is an almost exclusively pay TV venture.

Premiere CEO Georg Kofler sees this as the main reason the German pay TV market lags behind its European neighbors. Despite having a larger potential audience, Premiere's 3.5 million subscribers are a fraction of those reached by BSkyB in the U.K. or Canal Plus in France.

Last week, Kofler launched an attack on ARD, questioning Sportschau's status as a free-TV "sacred cow."

ARD shot back, citing "Sportschau's" ratings -- which regularly top 6 million viewers -- as evidence German viewers want their free-to-air soccer.

"More viewers watch 'Sportschau' than pay TV in Germany can hope to reach in the foreseeable future," said Christine Bausch, a spokeswoman for regional public broadcaster WDR, which produces the show. "The Bundesliga and especially its sponsors, want that audience, and they aren't going to get it with Premiere alone."

Indeed, in rights negotiations in 2005, the German soccer league rejected Premiere's top-dollar offer in favor of Unity Media precisely because Unity agreed to share rights with "Sportschau." Premiere had insisted on an exclusive deal.

But the league may be changing its tune. A DFL spokesman said in an interview that "all options are on the table" including an exclusive pay TV deal, when negotiations for the 2009-10 season begin at the end of this year.

The result of those negotiations could determine whether Premiere takes its place as one of Europe's pay TV giants or remains stuck in second division.

"Soccer is essential for us -- it forms the core of our programming, there's no denying that," Premiere spokesman Stefan Vollmer said. "It is not just a matter of increasing subscriber figures but in boosting earnings per subscriber. That is the main goal now that we have regained the Bundesliga rights."

On Friday, ARD and Premiere square off -- both will air live broadcasts of the Bundesliga opening match. But, like the tournament itself, the true winner in the battle for German soccer rights won't be clear until the end of the season.
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