Sky Germany steps into Sport1

Strategic advantages for Sky Germany and advancing stocks for Constantin seem to be the net result after the German pay TV operator purchased from Constantin Medien AG the TV and film production firm Plazamedia, as well as 25.1% shares in Sport1 und Constantin Sport Marketing, writes Birgit Heidsiek. The major package that was put together in the evening of 5 December has a value of around €57.5 m (cash and debt free).

Shortly after the deal was announced, the stock of Constantin went up by €1.68, which comes down to an increase of market capitalisation by €14.5m.

“We have reached important progress with the digital transformation of our group this year, and in particular in the segment sport have sped up the expansion of our multimedia strategy strictly – [not least] with the launch of digital sports radio and the pay TV Sport1 US,” says Bernhard Burgener, chairman of the board of Constantin Medien AG. “We will also focus on the development of new business models with growth potential and the advancement of our contents and platforms in the future. We are delighted about the participation of our business partner Sky in our enterprises Sport1 and Constantin Sport Marketing.”

But principally this is a big deal for Sky because it means that the pay TV operator will be in charge of its TV production partner Plazamedia. As one of the industry leaders in the German-speaking territory, Plazamedia takes care of the technical handling of the most important sport shows at Sky such as coverage of the Bundesliga soccer games, the Champions League and Formula One. A similar deal between the predecessor’s companies, Premiere and DSF, had failed to materialise in 2005.

To secure the business of this new subsidiary company, main customer Sky also takes a share of the second bulk buyer; German broadcaster Sport1 is also owned by Constantin Medien AG. Sky takes shares to the amount of 25.1 percent in Sport1 and in Constantin Sport Marketing. That way, Sky gets strategic advantages, although the pay channel won‘t get direct access to the transmission rights from Sport1. Among the events that Constantin Sport Marketing brings to the market are the UEFA Champions League, UEFA Europe League and UEFA Super Cup.

Only a few days after this deal, Sky Germany announced that the pay TV operator had acquired the live transmission rights for the UEFA Champions League until 2018. Each season Sky will air live 146 matches from the play-offs up to the final, including the UEFA Super Cup, among them 128 games exclusively released by the pay channel. All of the matches will be distributed live and in HD to the various distribution channels. Sky subscribers can enjoy the UEFA Champions League not only on TV. Further options include Sky Go on the web, iPhone, iPad via 3G or WiFi, and with the Xbox360 live.

On the production side, new services such as the Sky HD fan zone, the German conference and technical innovations like the 4K-super zoom camera will be continuously developed in the coming years so that the live transmissions of Sky will not only offer sport-oriented top performances on the lawn, but also steady innovation for TV screens.

“The UEFA Champions League comes up with magnificent dramas and unbelievable screenplays,” comments Carsten Schmidt, Sky board of directors for sport, advertising sales & internet. “The recollections of the final in Munich in 2012 and the German-German final in Wembley in 2013 gave the soccer fans goosebumps, even months and years afterwards. As the official TV partner in Germany we are delighted that we also can transmit these stories in future.”

In terms of soccer, Sky remains in a key position. The German pay channel secured the rights for the UEFA Champions League, the Bundesliga, the 2. Bundesliga, the German Football Association cup and UEFA Europe league, as well as the English Premier League live.

The transaction between Sky and Sport1 is supposed to happen in the first half-year in 2014 but has to be approved with regards to antitrust and media law. In addition, the general production agreement between Sport1 and Plazamdia needs to be renewed for several years.

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