BERLIN — Viacom and AOL Time Warner are said to be considering bids for the jewel in the crown of the struggling Kirch Group — ProSiebenSAT.1 Media — Germany’s largest terrestrial TV broadcaster.
Neither studio would comment, but bankers who have held talks with the studios have been working on ways to grab control of Kirch’s 52.5% stake in the publicly listed unit, according to Blighty’s Financial Times Web site Thursday. Disney is also thought to be interested in investing in Kirch’s broadcast businesses, if asked.
This will come as bad news to fallen mogul Leo Kirch. He has resigned himself to the idea of downsizing, already admitting that he needs a partner for money-losing pay TV operation Premiere World. Feevee, losing $2 million a day, is largely responsible for dragging the group to near bankruptcy.
But Kirch reportedly wanted help from the Hollywood heavyweights with this part of his empire — not ProSiebenSAT.1. And, up to now, creditor banks have supported that line.
Creditors to meet
Kirch’s largest creditor banks are due to meet its management in Munich on Monday to review restructuring plans. They want Kirch, struggling with nearly $6 billion of debt, to concentrate on its core business.
“When it comes to possible disposals, rights and free TV are core. That is where the line between a restructuring and a break-up lies,” one banker said. “The banks are not considering a break-up yet.”
However, the move would give Kirch an opportunity to settle its outstanding debt with the studios.
It has suffered under the weight of high-priced Hollywood film deals it signed, primarily for Premiere content. It is trying to renegotiate rights contracts with Paramount, Universal and Warner Bros. and is facing legal action from Paramount and Universal for withholding payments.
Kirch’s troubles intensified Thursday as the embattled media group reportedly missed its first payment on an expired short-term loan from Frankfurt-based DZ Bank.
Financial experts say DZ could bring the TV titan to its knees by filing insolvency charges. But the bank has not shown any interest in bankrupting the company.
Company is under increasing pressure to part with its valuable majority stake in Formula One motor racing. Kirch already has its stakes in newspaper publisher Axel Springer and Spanish web Telecinco on the block.