Frankfurt, Germany -- A small German women's channel
suddenly displayed the teeth of a testosterone-laden aggressor last week when it snapped
up the rights to a major soccer tournament. But observers in the market were hardly
shocked, as the channel, TM3, is owned by German programming company Telemunchen and News
Corp., a relatively new partner in the venture, which holds a 66 percent stake.
With the rights to the European Champions League in hand,
TM3 is expected to become a more general-interest service that will provide its owners
with a programming cornerstone to challenge the pay television clout of The Kirch Group,
the market's dominant television player. In the pay TV arena alone, Kirch owns
digital platform DF1 and pay TV channel Premiere.
Indeed, in recent years, the European Champions League
tournament's rights were split between Premiere and broadcast network RTL, which is
owned by CLT-Ufa.
Telemunchen owner Herbert Kloiber had previously dropped
word that he was planning a digital direct-to-home platform of channels for Germany,
including a lifestyle network and a home-and-gardening channel.
Kloiber has also predicted in the press that TM3 will
become one of the four major players in the German TV market. However, TM3 officials would
not provide any details on the network's future plans prior to a press conference
scheduled for late this month.
According to local press reports, TM3 paid 800 million
deutsche marks ($435 million) for the four-year rights to the soccer tournament.
The deal -- which includes both broadcast and pay TV rights
-- is an extraordinary expense for the channel, which has racked up losses of about DM250
million ($136 million) since it launched in the mid-1990s.
TM3 currently has an overall viewer market share of below 2
percent, according to AGF-GfK, a German audience-measurement company. It can only be
received by 81 percent of German TV homes, via cable and satellite distribution.
TM3's transformation resembles a plan News Corp.
chairman Rupert Murdoch discussed last summer.
At that time, he announced his intention of turning another
small German channel -- Vox, in which he holds a 49.9 percent stake -- into a major
network. He was stopped by co-shareholder CLT-Ufa, which wanted to protect its major
asset, RTL, from losing revenue.