Kirch Crisis: Premiere Burning Cash at €1.5m a Day

22 February 2002

The seemingly relentless torrent of bad news for German media empire Kirch Gruppe shows no sign of letting up, as a new report suggests its pay-TV platform Premiere World is losing money to the tune of €1.5 million a day.

Produced by investment bank WestLB Panmure, the study prompted no official comment from Kirch, though unnamed sources within the group have reportedly confirmed the scale of the losses.

With 2.4m subscribers, Premiere, says WestLB, is suffering from the exorbitant prices it pays for films and sports. Movie rights alone – which insiders say account for half of total expenses – will cost the platform a further €3 billion from now to 2006 under deals with Hollywood studios.

Such high programming costs are rapidly eroding Premiere’s cash. “The broadcaster's funds could run out by September 2002,” the study warned.

“Premiere has two options,” argued Stefan Weiss, one of the authors of the report. “Either it finds an investor, like Rupert Murdoch, or it becomes insolvent.”

Unfortunately for Premiere, Murdoch is anything but eager to pump more money into the platform. Earlier this week, he reaffirmed NewsCorp’s ardent desire to offload the 22% stake it holds via its BSkyB unit [WAMN: 21-Feb-02].

Data sourced from: Handelsblatt (Germany); additional content by WARC staff