Hollywood Studios Fly into Munich on Kirch Rescue Mission

29 April 2002

Senior executive from the leading Hollywood studios will attend a meeting in Munich today [Monday] to throw a debt-for-equity lifebelt to Premiere, the mega-lossmaking pay-TV unit of Kirch Gruppe.

Among others attending the pickings-fest are Britain's BSkyB and Bertelsmann, Europe’s largest media group.

The studios and broadcasters, creditors all, had expected billions of dollars in revenue from Kirch over the next five years. Under the terms of the proposed restructuring they will discuss renegotiation of their film and TV programme contracts in return for equity.

Those close to the talks say that salvation of Premiere is extremely unlikely unless the deal can be pulled off within the next ten days. Otherwise it is set to follow sibling KirchMedia into insolvency.

To add to Kirch’s woes, German newspaper and magazine giant Axel Springer is set to launch an €530 million ($477.90m; £327.68m) damages suit against Kirch Gruppe, in a last ditch attempt to recoup a cash claim that falls due this week. Springer’s board will be asked Tuesday to approve the litigation.

Data sourced from: Financial Times; additional content by WARC staff