Will pricey WB deal clobber Kloiber?
DVD boom brings up doubts about the pact's value
Kloiber, who learned the ropes under the tutelage of fallen Teutonic media titan Leo Kirch, has a reputation as a sharp and savvy businessman. That fact is highlighted by the Intl. Academy of Television Arts & Sciences' decision to honor Kloiber this year with its Intl. Emmy Directorate Award for his contribution to international television.
But locals still remember the fate of local distrib Kinowelt, which outbid RTL and Kirch with a $300 million offer for a Warner package in 1999. Germany's biggest media players refused to buy the high-priced fare, and with good reason: Crushed by gargantuan debt, Kinowelt was forced to return the content before filing for insolvency in 2001. Much of the package was eventually picked up by RTL in 2002 for an estimated $200 million.
RTL's unwillingness to match Kloiber cent for cent on the new package, including high-profile projects "Troy," "Batman Begins," "Ocean's Twelve" and "Scooby-Doo 2" as well as the second, third and fourth installments of "Harry Potter" and the second and third "Lord of the Rings" films, underscores changing trends in Germany.
The country is in the middle of a massive DVD boom, making the significance of acquiring hit films for commercial TV questionable.
Deal is also said to include up to a dozen new series, including "Friends" spinoff "Joey" and "Dark Shadows," and that was way too many for RTL. It remains market leader thanks to its popular locally produced copshows, dramas and sitcoms, preferring to cherry-pick the few U.S. titles it does air.
For Kloiber, the Warners agreement offers more than just the reverence enjoyed by big-shot wheeler-dealers; unlike Kinowelt, Kloiber has channels of his own.
He owns a 30% stake in commercial web RTL 2 and wholly owns fledgling web Tele 5. Hit movies and series could raise the web's profile and market share, currently at a slight 0.5% among target viewers, not to mention boosting overall advertising revenue.
While Kloiber is said to have paid $35 million more than RTL offered, he also landed rights for Austria, where he owns ATVplus, the country's only terrestrial commercial web.
But despite the fact that Kloiber can also act as a middleman and sublicense the content to other broadcasters, one Munich media exec reckons that "he'll end up with a very narrow profit margin."
Deal recalls Warners' sale last year of another programming bundle to French satcaster TPS for $30 million following a bidding war with rival Canal Plus. Gallic industryites see the deal as far too pricey for the money-losing TPS.
But the acquisition could strengthen TPS' position if a merger with Canal Plus satcaster Canal Satellite becomes inevitable -- and, in this business, image is everything.
