The decline of the German media empire built by Leo Kirch shows no signs of coming to a halt, with insiders predicting that several other units will follow the group’s flagship rights division KirchMedia into filing for insolvency.
Hotly tipped for such a move within the next few days are Taurus, the holding company for the entire Kirch Gruppe fiefdom, and KirchBeteiligung, a repository for various shareholdings including the 40% stake in publishing giant Axel Springer and the majority interest in Formula One motor racing.
The labyrinthine relationship between Kirch’s units means that last week’s insolvency application by KirchMedia – whose earnings had been used to fund loss-making siblings like KirchPayTV – could drag down the rest of the group.
For example, the pay-TV unit, owner of platform Premiere World, has been desperately trying to avoid insolvency through talks with shareholders, banks and potential sources of new investment, so far without success.
Recent rumours have it that Rupert Murdoch, whose British pay-TV firm BSkyB holds a 22% stake in Premiere, may yet turn out to be the platform’s white knight, with new investment and fresh management.
Murdoch has so far insisted that all he wants is his money back, via an option to sell the Premiere stake back to Taurus for €1.7billion ($1.5bn; £1bn) in October. However, should Taurus file for insolvency, that option would become void, making it in Murdoch’s interest to stop the rot in the Kirch empire spreading further.
Data sourced from: Handelsblatt (Germany); additional content by WARC staff