Soccer tie-up questions plague Premiere
EmptyCANNES -- Shares in German pay platform Premiere fell faster than a diving soccer player Wednesday after the group stopped marketing of soccer-themed channel Arena on its German satellite service.
Premiere pulled Arena because of fears that the cross-marketing deal between the two pay TV groups, signed in February, could be ruled illegal by German media authorities.
Premiere stock opened down 2% at €15.76 ($21.40) Thursday after plunging 6% Wednesday directly following Premiere's decision.
Premiere and Arena, once fierce competitors, seemed to have buried the hatchet this year with the deal, allowing Premiere to sell Arena's top-league soccer channel Bundesliga Live direct to Premiere's satellite customers. In exchange, Arena took a 16.7% stake in Premiere.
But German media watchdogs could now block that agreement, a thought that is spreading uncertainty among Premiere investors.
Premiere CEO Georg Kofler said the decision to stop marketing Arena would give both companies and the authorities time to examine the deal "in detail and, if necessary, to adjust it." Premiere satellite customers who already receive Arena's soccer channel will not lose that privilege, Kofler insisted.
If the deal is blocked, it could have serious consequences for both pay TV companies. The distribution agreement gave Arena access to Premiere's marketing machine and its 1.7 million satellite subscribers.
Premiere received one of the most prized pieces of programming for German pay TV customers -- live top-league soccer. The deal also gave Premiere access to the 5.1 million cable customers served by Arena's parent company, cable group Unity Media.
The German media authorities are expected to rule on the Premiere-Arena deal by May 31.