Revenue: $1.2 billion
Loss: $1.93 billion
The bankruptcy earlier this year of Kirch Media, the free TV and rights engine that powered the vast Kirch Group, founded by Leo Kirch in 1955, marked the end of an era for Germany’s media industry.
Kirch Media collapsed under a growing pile of debt that reached nearly $3 billion, including outstanding loans to a slew of German and international banks, and unpaid bills for Hollywood films.
The Kirch debacle has caused deep depression and growing unemployment in Munich, formerly one of Germany’s biggest media hubs and home to the collapsed empire. The company’s cave-in also brought down film prices dramatically in Germany.
Most significantly, however, the collapse has signaled an end to the protective and opaque German business practices, and shook loose the strong ties between banks and big business as healthy and transparent balance sheets become more important than long-term relationships.
Now under the control of its lenders, Kirch Media is up for sale. Seven groups are bidding for its assets, with the highest current bid — said to be from U.S. producer Haim Saban — at $2.5 billion.
So far, only offers from a consortium headed by publishers Axel Springer and Heinrich Bauer, and a group that includes Columbia TriStar and Commerzbank have been confirmed.
Springer and Bauer appear to be the front-runners considering Springer’s long association with Kirch and that a Springer-Bauer takeover would keep ProSiebenSat 1 in Teutonic hands.
Springer is looking to deduct $756 million that it’s owed by Kirch Media from the purchase price if its consortium ends up with the winning bid.