Advanced Television

EU examines Murdoch's Premiere investment

May 16, 2008

The European Commission is to review News Corporation's stake in German pay-TV operator Premiere. The Commission stated: “We are examining [News Corp's acquisition of 22.7 per cent] of Premiere on the basis this may give News Corp de facto control.”

In an echo of the regulatory difficulties BSkyB has faced in the UK with its stake in ITV, the concern is that the shares would be sufficient to be the determining factor in decisions reached at an Annual General Meeting. BSkyB – which is 39 per cent owned by News Corp – has been told by UK regulators it must reduce its stake in ITV below the level where this would be possible.

The Commission stressed this was a preliminary review and did not imply it would place limits or restrictions on the stakeholding. It has said it will decide by mid-June, prior to the company's AGM, whether to approve the acquisition or whether it needs to conduct a more in depth investigation.

News Corp acquired its initial stake in Premiere in January when it purchased the 14.58 per cent share held by cable operator Unitymedia, since then it has steadily increased the holding. Murdoch is seeking to have two representatives elected to the company's Supervisory Board.

Meanwhile, Premiere announced Q1 losses of E28.1 million, blaming piracy for a slow down in revenues and subscribers. Premiere is still ahead of a year ago with 4,242,467 subscribers at March 31, 2008 up from 3,460,572 in March 2007.

Along with the results Premiere announced a new pricing structure that reduces the number of packages to four. From July subscribers will be able to choose from Premiere Sport, Premiere Fussball Bundesliga, Premiere Film and Premiere Family, each at E19.99 per month with savings of up to 40 per cent for taking more than one selection. Existing subscribers will pay the new prices when their existing contract comes to an end. Two additional packages, Premiere HDTV and Premiere Star, can be purchased in conjunction with the four standard packages or as standalone products.

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