BERLIN — Georg Kofler, head of Kirch Group pay TV service Premiere World, announced plans Wednesday to ax up to a third of the web’s 2,500 jobs and slash subscriptions to revive the troubled operation.
Kofler also said he expected to renegotiate output deals with Hollywood studios in the next three months to reduce costs and reiterated the company’s plan to offer the studios a stake in Premiere in return for price cuts.
Kofler, who took over Premiere last month, told a Munich news conference that these moves would save €500 million ($440 million) a year, making it possible for Premiere to turn a profit with 3.1 million subscribers, down from its earlier target of 4 million.
He also predicted that it could be ready for an initial public offering in the first quarter of 2004. By then, according to Kofler, the company could be worth around $3.5 billion, making it attractive for investors.
Losing $2 million daily
Premiere, which has just 2.4 million subscribers, is losing $2 million a day. With losses last year of $870 million, the web has been largely responsible for bringing Kirch to the brink of bankruptcy.
Kofler’s plan was unanimously approved by the board of directors Tuesday. With high TV viewer fees and 30 terrestrial TV channels, German viewers have been reluctant to subscribe to pay TV.
The Kirch Group, which owns five terrestrial broadcasters, has run up $5.7 billion in debts and is fighting financial collapse.