Formula One, Kirch troubles deflate EM.TV
BERLIN — German kidvidder EM.TV on Monday blamed a massive writedown on its stake in Formula One racing and collateral damage from last year’s Kirch Group collapse for a S310 million ($338 million) net loss in 2002.
EM.TV’s revs reached $272 million, down 5% from 2001’s adjusted sales.
Speaking in Munich, EM.TV CEO Werner Klatten said he expects the sale of the Jim Henson Co. and the acquisition of former Kirch broadcaster DSF to be completed by the end of this month.
With a $27 million loan due in April, EM.TV is eager to sell Henson, which it acquired in 2000 for $600 million. Walt Disney remains at the top of the list of likely buyers, although the Mouse House reportedly wants only the Muppet assets from Henson for about $70 million.
EM.TV had planned to sell the unit last year but has seen interested buyers come and go and its asking price steadily drop.
EM.TV, which is heading a consortium seeking to take over DSF, expects a deal for the web to be inked this month, Klatten said. Company also is eyeing Kirch-owned technical service provider Plazamedia for about $20 million.
Although EM.TV had expected to be profitable this year, the current climate has clouded that outlook. Klatten backtracked on the forecast and said the company would continue restructuring through 2004.
“The fundamental changes in the national and international media landscape and, in particular, the collapse of the Kirch Group have considerably delayed and complicated EM.TV’s restructuring and strategic repositioning process,” the company said.
The main factor behind company’s loss was a $220 million writedown of its 16.7% stake in Formula One marketing company SLEC (via a 22.3% share in the Speed holding firm), which it agreed to sell in February to German bank Bayern LB for $9 million as part of an out-of-court settlement. The stake had been used as collateral by EM.TV’s former management in 2001 for Bayern LB loans to the Kirch Group as part of a rescue plan to save EM.TV from bankruptcy.