Kirch pay is in play
Murdoch still in picture to purchase unit
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Murdoch's British satcaster BSkyB holds a 22% stake in the hemorrhaging division KirchPayTV, which lost around $700 million last year and continues to burn up nearly $2 million a day. BSkyB apparently has signaled interest in taking over KirchPayTV once again.
The Teutonic pay TV unit, which owns digital web Premiere, was at the root of the Kirch Group's collapse. Kirch advisers and creditor bank officials were caught off guard at a Monday press conference after KirchPayTV denied their statement that it had filed for bankruptcy.
The insolvency petition was signed and ready to be filed in a Munich court Monday as company and bank reps drove off to the press conference. BSkyB asked for a last-minute postponement, however.
KirchPayTV said it did not plan to file for bankruptcy Tuesday either.
Some local watchers have expressed doubt that BSkyB would increase its stake in Premiere after promising shareholders it would pull out of the money-losing venture earlier this year. But Murdoch could still take over the stake directly through News Corp.
An insolvency of KirchPayTV may still be filed this week regardless of whether Murdoch makes a grab for Premiere, which could be taken out of the parent unit.
Wolfgang van Betteray, a Kirch-appointed corporate troubleshooter and new interim chief exec of Kirch Media, has made it clear that all ties between Kirch Media and KirchPayTV have been severed -- adding that the pay division and its luckless digital web would have to fend for themselves.
"A new investor with a better concept" would have to finance Premiere in the future, van Betteray said, adding that he was confident the paybox would stay in business.
KirchPayTV has been saddled with many of the costs resulting from output deals with Hollywood studios and sports rights agreements.
As for Kirch Media, the new management as well as banks have indicated that domestic as well as foreign investors would be welcomed into the revamped company.
Van Betteray said Murdoch and Italy's media mogul Prime Minister Silvio Berlusconi had in no way been blocked from coming onboard.
German newspaper publisher Axel Springer is negotiating with Kirch Media officials and a court-appointed insolvency administrator over a $675 million put option on its 11.5% stake in German broadcaster ProSiebenSat 1, which is 53% owned by Kirch Media.
Springer said Tuesday that its put option, called in in January, remained in force.
The Kirch Group's third asset-holding division, KirchBeteiligung, contains a 40% stake in Springer, which it's looking to sell, and a majority share in Formula One marketer SLEC.
Meanwhile, Bavarian Premier Edmund Stoiber, the main challenger to Chancellor Gerhard Schroeder in federal elections in September, is feeling the heat from Kirch's crash.
Officials of Germany's ruling SPD and Green parties as well as the liberal FDP are calling for a probe into Bavaria's financial support of Kirch.
The state-run BayernLB, Kirch's biggest creditor, provided the troubled company with $1.75 billion in loans whose security remains in doubt.
