BERLIN — There’s growing concern that embattled German media mogul Leo Kirch may be forced to pull the plug on his money-losing pay TV web Premiere World.
Kirch’s goal is to keep his core business: KirchMedia, which houses TV station ProSiebenSat 1 and its sports rights and film production divisions.
Putting Premiere out of its misery may be the simplest way to do this, according to sources close to negotiations between Kirch reps and creditor banks. The feevee has been largely responsible for Kirch’s 6.5 billion euro ($5.7 billion) debt.
Premiere’s prospects for survival are increasingly slim. The broadcaster is losing an estimated $2 million a day; there’s little sense in keeping it open — unless an unexpected savior appears with a huge wad of cash.
The only candidate to fit that bill is Rupert Murdoch. But Murdoch’s U.K. satcaster BSkyB, which wants a $1.4 billion refund on its 22% stake in Premiere, has repeatedly assured its shareholders it would not invest any more money in the German pay service. The refund, due in October, would probably wipe Kirch out.
Stefan Weiss, a media analyst with WestLB Panmure in Dusseldorf, says a solution for Premiere cannot be had without Murdoch, nor without the Hollywood studios who inked high-priced output deals with Kirch when business was booming.
The Munich group’s relationships with Hollywood partners have suffered since it reneged on two content deals, leading to legal battles with Paramount and Universal.
Media experts are sure of one thing: Without compromises from all sides, Kirch will go down, and Hollywood will lose a major client.