APRIL 5, 2002
Waiting for Kirch to go...
REPORTS in Germany on Thursday indicate that KirchMedia, the owner of the commercial rights to Formula 1 racing, is preparing to seek bankruptcy protection in Munich on Friday. There are expected to be last ditch talks but at the moment there is no agreement between investors and banks about how to save the over-extended media empire.
Putting the company into administration would enable legislators to find out exactly how much debt the company actually has and then decide whether or not the business can be run as a going concern. Formula 1 will not be hugely affected by the collapse as Kirch Media is not paying into the Formula 1 coffers. It would be the collapse of sister company Kirch Pay-TV which would cause worries amongst the teams as the TV revenues would then drop. These are important for the smaller teams but would probably not cause any F1 operation to get into financial difficulties.
The collapse of Kirch Media would however cause considerable damage to the soccer world and the German government said on Thursday that it is looking at ways to help the big soccer teams if Kirch does crash.
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