Sporting body-blow fails to put TV giant down

Date: 12/06/1997

By Chris Johnstone

“HANG on a minute while I get the viewing figures for last night - they usually come out at 11am, but they are late today.”

Jan Mojto retreats to his mobile phone to check on how one of his television stations is doing. “Are they sleeping?” he asks his unknown interlocutor dryly.

The managing director of one of Germany's biggest media empires, the Kirch Group, returns a few seconds later having stirred a response and apparently been appeased by the news.

Mojto readily admits that his company has just been outmanoeuvred by the normally slow-moving European Parliament. MEPs were the main movers behind a European Commission proposal this year which will allow governments to nominate a list of sporting events which must be safeguarded for mainstream television audiences.

It could amount to a body-blow for the Kirch Group. Buying programme rights and selling them for a profit is still the core business of a company created by reclusive Leo Kirch in the 1950s, when he bought up the rights of foreign films and sold them to cinemas in Germany.

“Our rights business is worth more than 1 billion deutschemarks a year,” explains Mojto. He declined to provide other statistics, admitting candidly: “We are terrible for giving figures.”

The Parliament's fast action followed the announcement that Kirch had just bought the football World Cup rights for 2002 and 2006 following a bidding war with the European Broadcasting Union (EBU), which is mostly made up of public service television stations.

That stirred up a media storm amid accusations that cash-rich Kirch was buying up sports rights as a sort of supermarket loss leader and that it had ambitions to dominate the television market with its coveted rights to popular sports events.

“Basically there was a misunderstanding which led to the attitude of the European Parliament that we were acquiring the rights for our pay-television stations. That was not the case,” insists Mojto. “We did not realise the regulatory moves which were taking place in Brussels ... The Parliament was very fast on its feet.”

Mojto accepts the reverse gracefully and says the company will have to work within the new rules when they are finally adopted by the Commission and national governments.

How widely governments will draw up their list of protected sports events and how far the Commission will challenge these if they appear to be exaggerated remains to be seen, he says.

The Kirch Group claims it has learnt its lesson and will keep closer tabs on what is happening in Brussels in future. However, it regrets the fact that it was so easily cast as the Satan about to spoil millions of viewers' sports entertainment.

“In the past, we underestimated the importance of image, of public relations, press work and lobbying, and concentrated mostly on doing our business. We believed that doing our business was our business and people would understand that. We were naive, but we are not any more,” confesses Mojto.

As if to prove the point, Mojto was visiting Brussels at the time of this interview under the separate guise of president of Europe's private television lobby, the Association of Commercial Television in Europe (ACT).

This time he is fighting a rearguard action against moves by Belgium and the Netherlands to insert a new clause into the EU treaty being discussed at the Intergovernmental Conference.

Various drafts under consideration would, at worst, prevent the Commission from investigating any state aid to public sector stations and, at best, shift the burden of proof in such a way as to make it difficult for the institution to achieve a ruling against these broadcasters.

The Commission has still to decide on several high-profile subsidy cases such as the complaint by France's TF1 against France 2 and France 3, and private Spanish broadcasters Telecinco and Antena 3's attack on TVE's involvement in a rival digital television consortium.

These and other outstanding cases would be shelved if the protocol was carried.

Since the Commission launched its proposal on rights, Kirch has not intervened in the market to buy up coverage of any big events, not because of the shadow cast over the market but because none are up for bidding.

The World Cup rights should still turn in a profit even though the EBU bid inflated the price, says the Kirch boss. “Whether we make money is not the question - it is only how much we make.”