Kirch Could Prove Obstacle to Malone’s Purchase of German Pay-TV Stake

19 November 2001

The purchase of a 22% in KirchPayTV by John Malone’s Liberty Media from Rupert Murdoch’s BSkyB – which on Friday was reported as part of a long-term TV deal between Liberty and Kirch Gruppe [WAMN: 16-Nov-01] – may in fact be blocked by Kirch.

Malone told German media mogul Leo Kirch of his intention to buy the stake in the pay-TV platform, owner of loss-making service Premiere World, in a meeting on Thursday, when the duo discussed a TV alliance.

Kirch would have to agree the sale, say insiders, but would be uncomfortable doing so, partly because it is unsure of the long-term intentions of Liberty, which needs to generate content for its German cable network.

Moreover, Kirch doubts that the purchase of the stake would get the green light from competition regulators, already concerned at Liberty’s ownership of both content and distribution.

Murdoch has an option to sell the stake back to Kirch in October 2002 should Premiere World fail as expected to hit agreed subscriber targets.

News source: Financial Times