GERMAN TV NEWS AGENCY BUYS STAKE IN NBC EUROPE

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NBC last week sold a majority stake in what's left of NBC Europe to DFA, a small, Duesseldorf-based TV news agency

controlled by the Rheinische Post newspaper group.

NBC Europe will continue as a broadcaster able to reach 20 million cable and satellite homes in Germany, Switzerland, Austria, Poland and the Czech Republic, though actual viewership is tiny. Industry observers estimate the channel pulls in less than 1% of German viewers.

DFA is mainly known for providing news footage to TV stations.

"The partnership with DFA continues our strategy of strengthening our European presence through strong partners who contribute programming, ad sales relationships and financial resources," said Tom Rogers, NBC exec VP in New York.

The deal will keep the U.S. TV network's programs and the NBC Europe brand on the air in Germany, Europe's largest TV market, said Larry Rutkowski, New York-based chief financial officer-international and business development for NBC.

LONG-TERM GOAL

The long-term goal is to get NBC Europe on any digital TV platform launched in Germany, which NBC is free to negotiate independent of DFA, he said.

DFA will provide the "lion's share" of investment in the partnership, Mr. Rutkowski said, while NBC will primarily supply programming.

However, DFA will add local entertainment programs to NBC Europe fare such as "The Tonight Show With Jay Leno," "Late Night With Conan O'Brien" and "Today."

The new service will predominantly be English-language, and any German-language programs will have English subtitles.

NBC Europe, under the direction of London-based Director of Sales Marga McNally, will continue to control ads sales around NBC programs.

Several German media buyers are skeptical about the new partnership.

"We do not expect that the partnership between NBC Europe and DFA will increase viewership," said a spokeswoman for Carat, Europe's biggest media buying company.

Jorg Bursee, manager of MediaCom, Germany's second-largest media buyer, said: "NBC Europe's problem is a language problem."

"We don't think so," countered Mr. Rutkowski. "In Germany, a large percentage of the population is fluent in English and German."

2 BRANDS LACKED AD SUPPORT

NBC tried for several years to establish both CNBC and NBC Europe, a news and entertainment channel, as separate brands in Europe and Asia but failed to attract enough ad support.

NBC's new strategy this year is to seek partnerships. In January, CNBC was merged with Dow Jones & Co.'s news channels in Europe and Asia, and in April, NBC entered into a deal with the National Geographic Channel to transform part of the NBC Europe operation into the National Geographic Channel in 11 countries, starting July 1.

The National Geographic deal excluded German-speaking Europe, where National Geographic programming had already been sold separately to other networks. The National Geographic Channel deal angered Nokia, NBC Europe's biggest advertiser with a multimillion-dollar sponsorship deal on "The Tonight Show." Nokia terminated the contract upon realizing that the show would no longer be broadcast across Europe.

Several major countries -- including France, Spain and Italy -- are not covered by either the National Geographic Channel or DFA arrangements. NBC said the company is exploring a number of options for those markets.

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