Viacom, Sony, NBC, Saban, Berlusconi in running

BERLIN — Viacom, Sony, NBC, billionaire producer Haim Saban and Italian prime minister Silvio Berlusconi have reportedly made the cut for a second round of bidding on the assets of bankrupt German TV titan KirchMedia, which whittled down a long list of potential buyers this week.

Teutonic publishers Axel Springer and Heinrich Bauer and French TV group TF1 also are said to be on the short list of investors interested in taking over KirchMedia, the core TV and rights division of insolvent media giant Kirch Group. The unit owns ProSiebenSat.1 – Germany’s biggest broadcaster – a vast film and series library, lucrative sports rights and international film distributor, Beta Film.

The number of possible investors was pared down from around 80 to fewer than 10 after KirchMedia’s management began reviewing non-binding offers earlier this week. Sources close to the sale say KirchMedia is only allowing buyers with offers of at least €2 billion ($1.95 billion) a peek at the company’s books. The next round of bids will likely come after bidders examine Kirch’s balance sheet and contractual programming agreements to see whether they really want the company.

New investors also face the possibility of legal claims from Kirch’s former content providers, many of whom are still owed money. As a result, the exact staus of Kirch’s rights assets remains unclear.

Kirch’s convoluted structure and a glimpse of its books were reportedly enough to scare away one local bidder, German publishing group WAZ, which was set to join Sony’s Columbia TriStar Intl. Television and Germany’s Commerzbank, one of KirchMedia’s main creditors. Sony and Commerzbank remain open to investment partners.

Saban is flush with $1.4 billion from the sale of his 49.5% stake in Fox Family Worldwide to Disney last year. Industry watchers said a partnership between Saban, who reportedly is looking for local associates, and Springer and Bauer could be possible as their interests would not conflict. Springer already owns 11.8% of ProSiebenSat.1.

Buyers, some of whom have reportedly complained about the quality and quantity of information available about KirchMedia’s financial state, are to submit more detailed bids by July 31. A decision from Kirchmedia’s creditors is expected shortly thereafter. The sale is being handled by UBS Warburg.

Observers expect a final deal will have to include a German partner, adding that the German government would not allow its airwaves to fall under the exclusive control of a foreign company.

Meanwhile, KirchMedia employees attended a personnel meeting Thursday, many fearing a wave of layoffs as the company prepares for new ownership. Company has a work force of 5,600.

KirchMedia collapsed under billions of dollars of debt in April after fruitless rescue efforts by minority shareholders.

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