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MAY 3, 2001

EM.TV posts loss of $1.28bn

EM.TV announced earlier this week that it made losses in 2000 of $1.28bn, nearly twice its turnover. The loss was much bigger than expected but it is likely that EM.TV decided to put all its losses together in order to start again afresh. The company wrote off $592m on its Formula 1 investment and $314m on its purchase of The Muppets.

Thomas Haffa said that the company has now reduced its debt load from nearly $700m to just over $100m and is now planning to make a new start. EM.TV spent so much money in 2000 that the company needed to be rescued earlier this year by Kirch, which bought nearly half the EM.TV stake in Formula 1 and acquired 16.74% of the company as well.

The news of the loss sent the EM.TV shares plummeting by eight percent but they later recovered and increased in value. The stock is currently trading at much the same level as it has been for several months and there are still angry shareholders demanding compensation and ongoing investigations into the business.

Writing off the losses will clear the way for Haffa and Leo Kirch to use EM.TV as a vehicle for the flotation of Formula 1 if they choose to do so. Such a move would enable the car manufacturers to be allotted shares in the business.