MAY 9, 2002
What now for Kirch?
THE Bavarian courts have appointed lawyer Joseph Fuchsl as the administrator of Kirch PayTV, his job being to decide whether or not the business can be turned into a viable operation or whether it should be closed down and the assets sold off to pay as much of the debts as possible. Fuchsl will try to renegotiate the contracts that exist in order to stabilize the company's losses, which have been mounting at $1.8m a day in recent months. For the moment the company's Premiere channel remains in operation but there are going to have to be massive cut backs and it is expected that 1000 jobs of the 2400 will go in the next few weeks. Premiere is reported to have enough cash to keep running until the middle of next month but if more money cannot be found by then it will have to close down.
Now that the company has sought court protection from its creditors there is at least some room to maneuver but the bankruptcy will hit those with ongoing contracts with Kirch very hard. The Formula 1 teams are among those which are likely to end up being owed money by Kirch.
At the same time in Britain the government announced plans which could change the face of British TV dramatically as the market will now be open to bids from big foreign media firms. ITV, which owns the free-to-air rights to F1 in Britain is likely to be the target for bids from the industry majors such as AOL Time Warner, Bertelsmann, Viacom or Disney. The law will not got through until the start of next year.
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