MAY 8, 2002
Kirch PayTV goes to the wall
THERE is bad news in F1 circles this morning with the announcement in Munich that KirchPayTV has gone into administration, following the acceptance by the management that the company cannot pay its debts. This is likely to be a major hit for Formula 1 financing as the company was supplying a significant percentage of the income for the Formula One group of companies.
This will mean that things will be tighter than ever for the group which is just beginning to have to pay off its Eurobonds. In addition to that the company has to pay the teams almost half the money received from the TV revenues and so all the teams are going to lose money if Kirch cannot pay its bills. It is not clear what happens if the money does not arrive from Kirch but as the deals are based on percentages there is not thought to be any likelihood of the Concorde Agreement being broken.
Whatever the case it will add to the worries about Formula 1's short-term financial problems and will make even harder for the teams which are complaining that they are short of cash.
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