Kirch’s legacy remains firmly his own

Thomas Kirch fails to match father's impact

While Rupert Murdoch and Silvio Berlusconi cede ever more power to their youthful sons, Teuton maven Leo Kirch is making his unlikely comeback without son Thomas.

Once thought of as heir apparent, Thomas Kirch has failed to match his father’s impact on the German media scene.

The 49-year-old held various positions in Kirch Group prior to its 2002 fiasco, including as topper at Pro7, the first Teuton network to be listed on the stock market, as well as deputy chairman of the supervisory board at ProSiebenSat.

He also launched Germany’s HOT Networks in 1995, a joint venture between Home Shopping Network and Teutonic industryite Georg Kofler, before selling his stake to Barry Diller’s Home Shopping Network in 2002, following the collapse of Kirch Group in what would be the largest corporate meltdown in Germany’s post-war history.

Since then, his profile has been intermittent.

His PR company Thomas Kirch Communications was liquidated in October and deleted from the German trade register. There are unconfirmed rumors in Germany that he has been discreetly advising three large German banks on media-related investments, although the fruits of any such deals have yet to be made public.

It is instead his father who has returned to the stage, against all odds, at age 81.

Leo Kirch’s return is all the more remarkable because he is half-blind and battling complications from diabetes. He had one leg amputated recently, according to reports within Germany.

But he recently plunked down $4.4 billion to German soccer league the Bundesliga to market the lucrative German TV rights through his Sirius agency.

Leo Kirch’s closest family adviser may still be Ruth, his wife for more than half a century, who has been by the mogul’s side for his entire career.

Ruth is listed as an owner of Kirch’s Sirius agency, along with long-time Kirch business partner Dieter Hahn.

The elder Kirch started building his epic career in 1956 when he acquired German rights to Fellini’s “La Strada,” reportedly with a loan of $58,000 from his wife’s family.

From that point he rose to become a towering figure in the German media for decades. In his heyday he owned netcaster ProSiebenSat, paybox Premiere, leading film shingle Constantin, as well as the biggest library of German films.

For all the rivers of ink devoted to Kirch over the years, however, he remains an enigma, both within Germany and outside.

“He likes to leave things in the dark so he is kind of a mystery figure here,” says Michael Bahlmann, media analyst at Hamburg bank M.M. Warburg. “It was a big surprise that he re-entered the stage.” 

Murdoch and Berlusconi acquired minority stakes in Kirch Group in the late 1990s, in a deal codenamed Project Traviata and brokered by Franco-Tunisian maven Tarak Ben Ammar. That pact brought the three mega-moguls together for the first time.

Kirch Group’s subsequent demise left Murdoch and Berlusconi nursing some of the biggest losses of their careers.

Murdoch has previously admitted that the 2002 debacle left him with a “black eye,” while the notoriously media-shy Kirch offered an insight into the duo’s business dealings during a rare interview with German magazine Der Spiegel in 2002.

“Murdoch is a shark,” Kirch said. “Sharks have long teeth. Somebody who doesn’t want to swim with sharks shouldn’t be in the water.”

He may be about to find that James Murdoch’s teeth are just as sharp.

Shortly after the younger Murdoch engineered News Corp.’s acquisition of a leading stake in German Premiere, execs there fired off a letter of complaint to the country’s anti-trust watchdog about Kirch’s plans to produce and license ready-to-air soccer coverage to a variety of outlets — including mobile and IPTV — rather than simply selling pure, exclusive rights to the highest bidder.

Premiere is dependent on airing exclusive rights to soccer matches to attract and maintain subscribers.

Kirch, in turn, reached out and proposed an independent advisory board to oversee production of the Bundesliga coverage and ensure that there are no violations of journalistic standards. His attempts at conciliation may not be enough to fend off serious opposition at the cartel office, especially in the face of a re-invigorated Premiere backed by Murdoch.

Cartel office chairman Ralph Langhoff has questioned the legality of the agreement between Kirch’s Sirius agency and the German soccer league and sent out an exhaustive questionnaire requesting financial details of the deal.

The bidding for the German soccer season, set to begin in April, has been put on hold until the cartel office delivers its approval.

The holdup means Kirch still faces a number of challenges before his unlikeliest of comebacks is complete and it remains to be seen whether the elderly mogul can beat the odds one last time.

“He’s a visionary and he’s as sharp as ever,” says one former associate. “Even if he is half-blind he still sees clearer than most other people.”

Nick Vivarelli in Rome contributed to this report.