Our take...
Kirch's acquisition of German football rights caused a major uproar in 2007, when the TV mogul re-emerged on the media stage for the fist time since his empire went bust in 2002. Right from the beginning, commentators had questioned whether the business model underlying his deal with the DFL could actually work.

There was a whole portfolio of concerns, such as Kirch's plans to sell the rights in the form of pre-produced content only, which was supposed to attract smaller broadcasters by cutting production costs. This caused disquiet at Premiere, which would have had been forced to buy the entire content package, although it relied on its own genuine programming. Speculations that Premiere might not buy the rights and thus render the €500m agreement unachievable, had been ruled out by the pay TV operator itself.

However, the cartel office has put all these concerns to an end and Premiere might now get the soccer rights without the much disliked ready-made content and also for a much lower price. After Kirch's failure, the DFL is expected to put soccer licenses out to tender by itself. As it does not have any production facilities nor the necessary expertise, it is highly unlikely that the DFL will continue its plans to offer pre-produced content. Also, it will need to amend the current model insofar as it takes into account the earlier free TV match summaries and thus prevent more ambitious revenue targets.

Time for developing an entirely new marketing strategy that might yield higher revenues is lacking because the cartel office's lengthy investigation procedure has prevented TV broadcasters from buying Bundesliga packages before their presentation of 2009 programming to advertisers in July 2008. This puts extra pressure on the DFL to sell the rights at least for 2009 as quickly as possible to match broadcaster's schedules.

While the DFL's incapability of charging a higher price is in principle good news for Premiere, the cartel office ruling also prevents the pay TV operator to use the football rights as a more powerful marketing tool. As the free TV summaries will not be postponed, Premiere cannot expect football rights to deliver a boost in subscriptions that it urgently needs.

It may be the free-to-air broadcasters that turn out as winners in this rights fiasco. Football highlights broadcast on free TV after 8pm would have been commercially unviable: Sat.1 had to rebound after six weeks when it postponed match summaries to 8:15pm during the 2001 season because audience numbers had declined from 4.6m to 1.7m. In turn, early match summaries are a guarantor for very high audience figures.

These are particularly needed at Sat.1, which has suffered dramatic audience losses over the past years. In a bid to revamp its image, the channel has acquired rights to Champions League and UEFA football. Bundesliga rights would more than complement this football portfolio, as Sat.1's initial popularity and success that it now aims to restore were based on its Bundesliga match summaries when it held the rights from 1992 to 2003. Ironically, it was Leo Kirch who secured them for Sat.1.