US media group Liberty Media will base its German operations in Munich and create up to 10,000 new jobs throughout Germany.
After meeting with Bavaria's prime-minister Edmund Stoiber in Berlin, Liberty's chairman John Malone declared that "the density of television stations and internet companies around Munich had been a deciding factor" as well as Bavaria's central role in the European IT business.
A workforce of between 100-150 will be employed at the Munich HQ with others at centres to be established in Nuremburg, Berlin and Hamburg for administering the nine regional cable networks which Liberty had acquired from Deutsche Telekom for $5bn (DM11bn) earlier this year (Another three regional networks in Hessen, Baden-Wuerttemberg and North Rhine-Westphalia are in the hands of Malone's US rival Callahan).
According to Peter Friess, managing director of gotoBavaria, the region's re-location marketing agency for media, information and communication technologies, Munich is ideal for Liberty's purposes. "36 per cent of the German broadcasters already form an unbeatable cluster here where newly arrived investors also soon feel at home. Moreover, important technical service-providers are also gathered in the Greater Munich region".
Malone's decision for Bavaria and Munich as the HQ of his German operations came in the wake of speculation that Liberty is close to acquiring BskyB's 22% stake in the German pay TV group KirchPayTV whose main operation is the beleaguered Premiere World.
While the KirchGroup would not comment on the concrete possibility of Liberty coming onboard Premiere World, it is understood that Malone and German media mogul Leo Kirch had fruitful discussions on the potential for collaboration in the fields of ad-financed and pay television during a meeting in Berlin this week.
Moreover, Malone tried to downplay the prospect of Liberty taking a stake in Kirch's pay TV operations when speaking to the daily German newspaper Frankfurter Allgemeine Zeitung (FAZ). "That is not necessarily the most effective way to find a common basis for co-operation", he declared. "We would favour a contractual agreement t jointly market programmes rather than an equity stake"
Liberty's acquisition of the cable networks still has to receive regulatory clearance - which is expected in January 2002 - , but some observers suggest that the German cartel authority might be forced into action again should Liberty decide to replace News Corporation's BSkyB as Kirch's partner in KirchPayTV and Premiere World as this would result in a combination of the roles of cable operator and content-provider.