BERLIN — The four main creditor banks of insolvent TV giant Kirch Media are set to put up to €200 million ($235 million) each into the company following the collapse of sales negotiations with Haim Saban.
Part of Kirch Media’s “Plan B,” move would make the banks official Kirch Media shareholders and allow the company to inject necessary capital into its cash-strapped multichannel ProSiebenSat.1 and its TV licensing business.
For ProSiebenSat.1, move appears to already be paying off: on Wednesday it acquired for $82.5 million exclusive free-TV rights to UEFA Champions League soccer through 2006 for its web Sat.1.
Kirch’s creditors, Bayern LB, Commerzbank, HypoVereinsbank and DZ Bank, are looking to put up to $60 million each into the group, said Bayern LB chief exec Werner Schmidt. According to Bayern LB, that would mean a 4% stake in Kirch for each of the banks.
While Saban’s exit left Kirch Media without the prospect of a major investor, Schmidt said the development wasn’t “necessarily negative,” adding that industry prices are currently so low, that a future sale of Kirch Media could well be more promising.
ProSiebenSat.1 will now be banking on the ratings success of the Champions League, which until now has been carried by rival web RTL Television.
Deal, set to start with the 2003/2004 season, includes a total of 39 live matches as well as 90 additional sports summary highlights. Sat.1 will carry the top match of the week live and in primetime. Additional highlights will air on weekend sports shows and on ProSiebenSat.1 news channel N24.
Company is paying $27.5 million per season, considerably less than the $65 million RTL had paid. The Champions League rights proved unprofitable for RTL and execs at the former Champions League web have expressed doubt that they will be profitable for Sat.1 despite the lower price tag. RTL said in February it would no longer bid on the Champion League rights, saying it could not recoup even half of what it was paying through advertising.
ProSiebenSat.1 prexy Urs Rohner admitted that the acquisition of the Champions League represented a change of strategy for the group, which blamed the high costs of German national league Bundesliga soccer for Sat.1’s $105 million loss last year.
One major difference this time around will be the focus on “highly rated live events,” namely on high-stakes matches between popular teams, according to Rohner. The agreement “has secured our supply of top soccer until the World Cup 2006,” Rohner added.