Sandhu gives inside track on Arena Bundesliga deal

By Julian Clover
May 11, 2010 11.46 UK

Former Unitymedia CEO Parm Sandhu has lifted the lid on the Bundesliga deal that saw the cableco create the satellite platform Arena.

In a presentation to the Sports Media Summit in Düsseldorf, Sandhu described how he had proposed a wholesale offer to the then Premiere CEO Georg Kofler in an attempt to create a one-stop shop for pay-TV subscribers. “Unfortunately, Kofler didn’t see the opportunity. His idea was about domination, total exclusivity and total control across all platforms, not about co-operation. So when the DFL auctioned the Bundesliga rights for the season 2006-2009, we went bidding for them.”

Sandhu said he wanted to include the Bundesliga rights as part of a triple play offer for both Unitymedia and Kabel Deutschland at a time when Deutsche Telekom had also expressed an interest in bidding. “Unfortunately, the DFL auctioned the Bundesliga in a way that we couldn’t bid for the cable rights alone. We had to bid for the complete rights; cable and satellite,” Sandhu told his audience. “We were never interested in the satellite rights! My intention was to give the satellite rights back to Premiere, and come to a wholesale deal with Kofler in cable”.

Having secured the rights, Sandhu offered a share both to Kofler and Kabel Deutschland, but both turned him down. This left the cable operator with little choice other than to launch the Arena pay-TV platform, which initially attracted more than one million subscribers in is first six months of operation.

Sandhu was unable to reach Kofler until a chance meeting at the World Cup led to a cross marketing agreement between Premiere and Arena, while Unitymedia became the one stop shop for internet, telephony, free, basic and pay-TV that Sandhu was trying to create.

However, the intervention of the Bundeskartellamt eventually resulted in Arena sublicensing the rights to Premiere, and Unitymedia becoming the pay-TV platform’s largest shareholder. “The Bundeskartellamt looks at every single infrastructure as a separate universe of its own, not as a part of an overall ecosystem or market. They are not so much interested in competition between the infrastructures. They look at every infrastructure as a separate market each with its own monopoly,” said Sandhu, adding that while an interesting theory for academic discussion, it showed the Bundeskartellamt to be out of touch with reality.

Sandhu said while the project was successful financially, he did not achieve everything he wanted, though the venture was to lead the DFL creating a new method of selling its rights through the Sirius agency.