Plans for a merger of German broadcaster ProSiebenSat.1 and its parent KirchMedia – put on hold last month due to the financial chaos engulfing mutual owner Kirch Gruppe [WAMN: 25-Feb-02] – have been killed off for good.
Following a meeting of its supervisory board, ProSieben said the scheme – designed to bring privately held KirchMedia onto the stock market – had been abandoned due to the weak economy and troubles at Kirch, though the duo would continue to collaborate in cost-cutting measures.
The planned merger had not gone down well with investors, who feared that the profitable, listed ProSieben would be dragged down by its parent’s plight. In the six months after the deal was announced [WAMN: 06-Sep-01], the broadcaster’s shares tumbled around 50%.
Separately, the new boss at Kirch’s cash-haemorrhaging pay-TV platform Premiere World announced a major cost-cutting scheme after it posted 2001 losses (before interest and tax) of €1 billion ($0.9bn; £0.6bn), on sales revenue of just €813 million.
Chief executive Georg Kofler revealed the platform will axe one-third of its 2,400-strong workforce in coming weeks and seek to renegotiate costly film and sports rights deals. It also plans to boost its customer base from the current 2.4m to 3.2m by the end of next year through new subscription packages. Kofler believes Premiere can be made ready for flotation in three years’ time.
Data sourced from: Handelsblatt (Germany); BBC Online Business News (UK); additional content by WARC staff