JULY 7, 1997
A big boost for Bernie
THE long-term stability of Formula One Holdings received a major boost last week when German television magnate Leo Kirch announced a restructuring of his TV empire. Kirch owns DF1, the digital pay TV station which will provide as much as 25% of FOH's income for the next 10 years. This has struggled since it was launched a year ago, attracting only 30,000 subscribers.
The deal put in place last week will boost subscriber levels dramatically as it includes the agreement of German telephone company Deutsche Telekom to open up its cable network to digital TV broadcasters. This means that DF1 will not have to rely on subscribers buying satellite dishes but will be able to use Deutsche Telekom's cable network, which reaches 16m homes, half of Germany's households.
As part of the deal DF1 will link up with Premiere, a movie and sports channel which already has 1.4m subscribers. Kirch's shares in Premiere have been acquired from France's Canal Plus in exchange for Kirch's share in the Italian digital pay TV channel Telepiu.
The deal gives Canal Plus - the major source of income for FOH - 90% of Telepiu but it has indicated that it may sell some of the shares to Italian TV companies in order to establish a single digital pay TV system in Italy.
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