APRIL 10, 2002
Kirch PayTV holds on
WITH Kirch Media having gone into administration on Monday the focus has switched to its sister company Kirch PayTV with rumors circulating that this firm will also have to seek protection because of huge debts. This is much more significant than Kirch Media for Formula 1 as this will mean that income from the German pay-TV operations will almost certainly cease to be made - and that means that the income for the Formula One group of companies will drop accordingly. When the first F1-Kirch deal was announced back in July 1996 it was expected that the arrangement would provide 25% of the TV income coming to Formula One for the ensuing 10 years. The original deal was with DSF. This later became DF1 but continued to struggle to make money and eventually DF1 was rolled into Kirch's Premiere service although this too has failed to attract the kind of numbers of subscribers needed to turn the business around.
The loss of Kirch PayTV income would be a major blow to Formula One and to the teams which benefit from the income from pay-per-view television. It is also not clear whether the collapse would have any effect on the day-to-day running of the F1 television facility as parts of it (such as satellite dishes) are rumored to belong to Premiere rather than to the Formula One group of companies. It is also not clear whether the German pay-TV service will continue.
There are also questions as to whether the holding company of the Kirch empire, called Taurus Holding, may also have to declare itself insolvent.
Whatever the case, and whatever the possibilities which may now open up, the immediate result of all this is not good news for F1.