BERLIN — Insolvent TV group Kirch Media is back to square one after three months of intense bargaining with Haim Saban failed to produce an acceptable agreement for the sale of its TV and licensing assets.
With too many unresolved issues blocking a deal, even Saban’s last-ditch visit to Munich last week wasn’t enough to save the negotiations.
With Saban gone, Kirch and its creditors now are set to implement Plan B.
For the banks, it’s a bitter pill to swallow: Not only do the creditors have to forgo some $1.3 billion in debt owed them, they are expected to forfeit some $400 million in cash that Kirch Media recently generated from the sales of its lucrative sports rights business and sports channel DSF.
Most of that cash now will have to be pumped into Kirch’s cash-strapped assets to keep them operational. Kirch broadcasting group ProSiebenSat 1 has been battered by the ad slump, while a lack of funds at the Kirch licensing business have made it impossible to replenish the increasingly stale library with fresh product.
Urs Rohner, chief exec of ProSiebenSat 1, managed to put an upbeat spin on the latest developments: “We are convinced that the new solution will have a positive effect for our company.”
Most analysts agree the market has bottomed out, meaning asset prices can only go up. The creditors, which include German banks Bayern LB, DZ Bank, Commerzbank and HVB as well as Disney and Columbia TriStar, will have to wait longer to recoup their money, but they may end up selling the assets for considerably more than the $2 billion-plus Saban was set to pay.
For now, interim managing director Hans-Joachim Ziems will remain at the helm and oversee the management of the assets. Ziems, a Cologne-based business consultantspecializing in the restructuring of financially impaired companies, will handle ProSiebenSat 1 with the help of former RTL TV chief Helmut Thoma.
Both will be named to ProSiebenSat 1’s supervisory board at the shareholders meeting June 16. Rohner will remain ProSiebenSat 1’s chief exec.