BERLIN — Troubled German media giant Kirch continued talks with creditors over the weekend amid reports that Rupert Murdoch and Germany’s pubcasters had made offers for the group’s lucrative sports assets.
Murdoch has reportedly offered to take Kirch’s majority stake in Formula One motor racing in lieu of the 1.7 billion euros ($1.5 billion) the group will be forced to pay Murdoch’s British Sky Broadcasting in October. The U.K. satcaster holds 22% of Kirch’s money-losing pay TV platform Premiere World and has said it will exercise a put option for a full refund plus interest.
While the move would relieve Kirch of the Murdoch dilemma, it would cause new difficulties with the Bayerische Landesbank, which lent Kirch $880 million specifically for its acquisition of Formula One rights marketer SLEC. Kirch owes the state bank nearly $2 billion. The company refused to comment on the report.
Officials of pubcaster ARD, meanwhile, are reportedly meeting Kirch execs this week to make an offer for the rights to all 64 World Cup soccer championship games in 2006, which are being held in Germany. “We are of course interested in the World Cup rights and would like to acquire them with ZDF,” an ARD spokesperson said.
ARD and fellow pubcaster ZDF already have rights to 25 live matches and are reportedly offering $220 million for all the matches, which would be available on free TV. That could be disastrous for Premiere, which is counting on big sport events like the World Cup to attract subscribers.
Nevertheless, Kirch has said it is open for talks on the 2006 games but would not renegotiate terms for the 2002 World Cup this summer.
Kirch execs and hired trouble shooters have been meeting with creditors, including Bayerische Landesbank, HypoVereinsbank, Commerzbank and DZ Bank, for the past week in an effort to find a way out of the current crisis. Hans Tietmeyer, former head of Germany’s federal bank, has been named a possible candidate to help mediate an agreement between Kirch and its creditors.
Meanwhile, Premiere topper Georg Kofler is set to outline a separate restructuring package at a meeting of the unit’s supervisory board on Tuesday. Kofler is expected to present a number of cost savings measures, including an initial 270 layoffs and an attempt to renegotiate costly film deals for the company, which is losing an estimated $2 million a day.