London -- NBC has given German production company Deutsche
Fernseh Agentur majority control of NBC Europe, based here, by signing over a 74 percent
stake in the channel and retaining just 26 percent, according to DFA CEO Helmut Keiser.
Tom Rogers, president of NBC Cable and Business
Development, wouldn't comment on the equity-percentage split. But Larry Rutkowski,
chief financial officer of NBC, explained: "DFA will be carrying the lion's
share of the funding going forward. NBC will be providing programming for its equity
interest."
NBC officials said last week that roughly one-half of NBC
Europe's 92 London-based employees have been absorbed into CNBC Europe, and the
status of the others is being reviewed. "DFA is currently contacting them, and this
all has to be resolved this month," Rutkowski said.
German sources said last week that DFA, which is based in
Düsseldorf, Germany, has indicated to German regulators that 200 jobs will be created in
Düsseldorf next year, with an "NBC Germany" base located there. That led to
speculation last week that the origination of NBC Europe may shift from London to
Düsseldorf in 1999.
DFA has already worked with NBC on a computer-channel
project called GIGA-TV, which was stillborn. However, last week's announcement also
marked the resurrection of that project, with GIGA-TV slated to become a new programming
block on NBC Europe.
NBC Europe will continue to serve mainly Europe's
German-speaking region, comprised of Germany, Switzerland, Austria, Poland and the Czech
Republic. The coverage of the channel will be about 20 million to 25 million cable and
satellite subscribers.
Despite the new German focus, NBC officials said the
majority of NBC Europe's programming this year will continue to be English-language
NBC and CNBC fare.
The deal follows NBC's announcement April 20 that
National Geographic Channel is taking over NBC Asia's coverage and NBC Europe's
coverage in Britain, Ireland, the Nordic region, the Benelux countries and Israel. NGC is
partially owned by NBC.
Last year, NBC wrote down $161 million in charges, mostly
related to the CNBC/Dow Jones & Co. merger. But, Rogers said, "there's
nothing as a result of this particular [DFA] deal that triggers anything further in that
regard." He added that new investments from the NGC and NBC Europe partners, coupled
with programming-supply revenues from NBC Europe, will offset losses that would have been
attributed to NBC Europe.
NBC will continue to distribute NBC Europe outside of the
German-speaking region and the areas being taken over by NGC, but it will work with cable
operators in some of those regions to switch out carriage of NBC Europe for CNBC Europe.
Rogers said that in some cases, operators will likely wind
up carrying one NBC-supplied channel that will be a mix of programming from NBC Europe and
CNBC Europe.
