Problems afoot for Kirch's soccer deal
EmptyCOLOGNE, Germany -- Leo Kirch's 3 billion euro ($4.7 billion) deal to market the rights to Germany's Bundesliga could be in jeopardy following opposition from the country's cartel office.
The authorities question the legality of the agreement between Kirch's Sirius group and the German Soccer League (DFL). The cartel office has sent out a 12-page questionnaire to German clubs requesting financial details of the deal.
At issue is the league's practice of marketing TV rights for all German clubs -- big and small -- as one package. Rights revenue is then divided between teams, with the largest clubs getting the lion's share.
Cartel office chairman Ralph Langhoff has compared this "central marketing" practice to a price cartel and said it is unfair to smaller clubs. He has threatened to block the Kirch-DFL deal unless the practice is changed by, for example, giving smaller teams a bigger share of TV revenue.
That doesn't sit well with the big boys. Germany's No. 1 soccer team, Bayern Munich, claims central marketing puts it on the back foot. Bayern, which earns about 25 million euros ($39 million) a season from its share of TV revenue, figures it could pull in 100 million euros ($155 million) or more if it sold the rights to its games on its own.
The cartel office investigation has pushed back the sale of Bundesliga rights, which was scheduled to begin last week. Without approval from the cartel office, Sirius can't begin to solicit offers from German networks, pay TV channels and cable providers.
The Kirch-DFL deal is for the next six Bundesliga seasons, starting in 2009.
Until the issues can be resolved, the German TV industry will remain in limbo. Bundesliga soccer is a guaranteed ratings winner for free-TV and the single most important element driving subscribers for pay TV.
German pay TV leader Premiere has built its entire platform around soccer and would have to radically rethink its strategy if it does not secure the rights again.