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To: BillyG who wrote (32982)	5/6/1998 4:52:00 PM
From: John Rieman	Respond to of 50808

Kirch........................................ ijumpstart.com -------------------------------------------------------------------------------- KIRCH LOOKS TO TRADE HOLLYWOOD FEATURE FILM RIGHTS FOR EC OK German media mogul Leo Kirch has offered to sell 25 per cent of the DF1 film stock in a last-ditch attempt to get EC Commissioner Karel van Miert to allow the Premiere/DF1 merger to move forward. Kirch, who owns nearly all the pay-TV feature film rights in Germany for the next 10 years, personally traveled to Brussels with Bertelsmann Chairman Michael Dornemann last Monday to mount what has been described as a "charm offensive." Kirch offered to allow 25 per cent of film stock (but not its sports rights) to be sold to other channels for the same price as would have been paid by Premiere. The problem for Brussels is that such a deal still would leave 75 per cent with Premiere. Even Murdoch's 20th Century Fox was lured by high prices to sell all rights until 2002, and other majors such as Disney have sold all rights well past 2005. Kirch's business manager Dieter Hahn already has stated on several occasions that DF1 will close, and the pay-TV rights to countless films and sports events would have to be sold to Premiere (as there is no other pay-TV channel in Germany) if the merger is not permitted to go ahead. Kirch already owns 50 per cent of Premiere and the channel is earmarked to use Kirch's d-Box decoder technology. This, according to some officials within the EU, would amount to a merger of DF1 and Premiere by another name. Bertelsmann's lawyer Ulrich Koch denied that the two companies had any such plans, but did admit that "Every company has to form alternative plans for the future, in the event that goals are not achieved." What those plans are remains to be seen, but they will not include any appeals should the EC rule against them. "If that happens, we shall have lost DM1 billion and that is quite enough," Hahn said. The reasons Bertelsmann wants to allow Premiere and DF1 to merge, bind themselves to Kirch's dBox decoder and pay DM500 million ($279 million) for the privilege, have eluded RTL boss Helmut Thoma, who said, "The catastrophe for Bertelsmann is not if the merger is forbidden, but if it is allowed." This opinion - that it makes little sense to pay so much to merge Premiere with 1.6 million subscribers with DF1 with just 160,000 - is said to be spreading within Bertelsmann. Hahn, however, denies that the two companies have differing views. "We have been able to conduct constructive talks in Brussels and that is only possible because both companies speak with one voice and are pulling in the same direction." At the same time, van Miert also is investigating the German sports market, particularly pay-TV rights for football. He cannot prevent Kirch and Bertelsmann from owning all the live transmission rights to the German soccer league, but he is seeking to prevent their future sale by one body. Van Miert told the German parliament that the centralised sale of football by the German league goes a long way to promoting further concentration of the television market. He pointed out that most German television, as well as the television rights market, is controlled by either Bertelsmann or Kirch. "The transmission of sports and football in particular is of enormous strategic importance for these companies," he said. The German Monopolies Commission also has sought to prevent the German soccer league from selling all games centrally and would like to see the 36 professional clubs take over responsibility for their own sales. The league's President Egidius Braun now is asking parliament to pass legislation freeing football from normal German commercial law banning cartel sales. The government has pointed out that such a change in German law would run foul of European law. Parliamentary spokesman for the CDU Hartmut Schauerte, who in his spare time is a farmer, stated, "If you leave a pile of dung in a field, grass will grow over it. If you poke about in it, it will stink." Schauerte's suggestion is to leave the law as it stands and persuade the soccer league to set up a fund whereby the financially powerful clubs who stand to gain by individual sales would be forced to pay to help their smaller brethren.