Press Release

Michael Schmittmann, Partner at Heuking Kühn Lüer Wojtek’s Düsseldorf office and renowned media lawyer, successfully represented the Saxon State Institute for Private Broadcasting and New Media (SLM) against the Free State of Saxony. In its December 19, 2017 judgement, the Saxon Higher Administrative Court in Bautzen ruled that, contrary to the first-instance judgement of Leipzig Administrative Court, the action by SLM against a supervisory complaint of the State Chancellery would be upheld.

The subject of the legal dispute, which is also observed with great interest by the other German state media institutions and state chancelleries, is a declaration by the legal supervisory authority that the acquisition of a partial ownership unit in SLM's building in Leipzig violates the principles of economic and efficient budgeting. The State Chancellery submitted as the core reasons for its complaint that the purchase price paid was above market value. Bautzen Higher Administrative Court now made it clear that the State Media Agency has wide scope for design and assessment in complying with the above-mentioned principles and that the threshold of unlawfulness is only crossed if SLM's actions are simply incompatible with the principles of sound economic management. In this case, the Higher Administrative Court affirmed the legality because, according to SLM's authoritative assessment, its accommodation without the establishment of a branch was only possible at the specific terms and acquiring the partial ownership unit is more economical than renting it in the long term. No appeal to the Federal Administrative Court was allowed.

The fundamental question as to how far the legal supervision of the German states, represented by the state premiers and state chancelleries, reaches in relation to the independent and self-governing state media institutions, has been a topic of discussion in regulatory media law for years. The ruling of the Higher Administrative Court now provides more legal certainty.