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Kirch to Announce Premiere Reform as “Shark” Murdoch Circles

News, 25 February 2002


Floundering German media mogul Leo Kirch branded Rupert Murdoch a “shark” late last week as he battles to hold together his media empire and prevent predators such as the NewsCorp boss from moving in for the kill.

Kirch is today (Monday) due to meet investors in his ailing pay-TV platform Premiere World. As reported last week [WAMN: 22-Feb-02], the unit is haemorrhaging some €1.5 million every day and needs further investment to survive. A new business plan will be unveiled, including the renegotiation of Premiere’s extremely costly film and sports rights deals.

Attending the meeting will be executives from NewsCorp and its BSkyB unit, which holds a 22% stake in the platform. Murdoch last week confirmed his group intends to exercise its option to sell back the shares to Kirch Gruppe for around €1.7 billion, a sum the debt-beset German group is unlikely to be able to pay without selling off considerable parts of its empire.

“Murdoch is a shark,” Mr Kirch told Der Spiegel last week. “Sharks have sharp teeth. If you can't swim with them, you shouldn't climb in the pool in the first place. I can't be angry with Rupert, even if he wants to eat me. That's the way he is.”

However, there have been a few positive developments for Kirch in recent days. Publishing giant Axel Springer Verlag, in which the ailing group owns a 40% stake, has announced it will not demand cash for the 11.5% holding in Kirch broadcast unit ProSiebenSat.1 it has decided to sell.

Having recently posted its first loss, Springer chose to exercise an option forcing Kirch to buy back the stake for over seven times its current market value [WAMN: 20-Feb-02]. However, it now appears willing to accept less cash and instead receive extra shares in ProSieben, taking its holding up to about 25%.

Such a move may have been facilitated by Kirch’s decision on Friday to postpone indefinitely a planned merger between the listed ProSieben and its privately held parent KirchMedia – a combination Springer was thought to oppose.

In addition, arguments between Kirch’s eight biggest banking creditors over the future of the group should be eased by their reported decision to name a single moderator to speak on their behalf. The appointment is expected by the end of the week.

Data sourced from: Financial Times; The Times (London); BBC Online Business News (UK); Handelsblatt (Germany); additional content by WARC staff