January 15 – Rupert Murdoch’s NewsCorp has taken a majority stake in German pay-TV company Sky Deutschland in a calculated gamble that will use football as the core content for the acquisition of new subscribers, increased revenues per subscriber and ultimately profitability in 2013.
The deal marks a major step forward for Murdoch in Germany, a market where he has historically failed to gain significant media ownership having faced resistance from local media owners and ownership laws.
It also indicates a wider ambition to roll out the highly successful BSkyB model across Europe, based primarily on the subscription model of premium pay live league football. Sky also operates in Italy and Austria.
NewsCorp will guarantee half of the annual license fee Sky pays for the rights to broadcast Bundesliga through to the end of the 2016-2017 season. Sky beat rivals, including telecom giant Deutsche Telekom, to the broadcast rights last year, paying €485.7 million per season.
NewsCorp paid €348 million for the new Sky Deutschland shares, raising its shareholding from 49.9% to 54.4%.
Sky Deutschland subscribers rose 12% to 3.36 million last year, and with new partnership with Liberty GlobalGerman cable provider Unitymedia KabelBW and Kabel Deutschland, the pay TV broadcaster will immediately reach more customers.
A deal has also been agreed with Deutsche Telekom to sell Sky channels including Bundesliga
matches and UEFA Champions League games to the telco’s Entertain TV clients.
“News Corp.’s continued investment underscores the value we see in Sky Deutschland and the significant market opportunities it faces, and reflects our confidence in its management team and their strategies for growth,” News Corp. Chief Operating Officer Chase Carey said in a statement.
“We have always believed in Sky Deutschland’s ability to transform the pay-TV experience in Germany and Austria and this new financing structure further validates that longstanding commitment,” said Chase Carey, the president and chief operating officer of NewsCorp. “News
Corporation’s continued investment underscores the value we see in Sky Deutschland and the significant market opportunities it faces, and reflects our confidence in its management team and their strategies for growth.”
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