Kirch goes under; no threat to soccer World Cup telecast

KirchMedia, the core rights business of indebted media media mogul Leo Kirch, filed for insolvency on Monday. After weeks of desperate efforts to stay afloat but weighed in under a mountain of debt, Kirch finally threw in the towel today, paving the way for a takeover by German banks and publishers.

This move also serves a nationalist interest in that it keeps aggressive foreign rivals, specifically Rupert Murdoch's News Corp, Mediaset, controlled by Italian Prime Minister Silvio Berlusconi, and the Saudi prince Al-Waleed from grabbing control and thereby getting a handlehold on Europe's largest media market.

Kirch had amassed debts of $5.71 billion through costly film rights deals and a misjudged foray into pay-TV. Insolvency, similar to Chapter 11 bankruptcy protection in the United States, places the company in the hands of an administrator.

Meanwhile, closer home, what is of principal interest to media watchers is what happens to the soccer World Cup telecast since KirchMedia holds the worldwide broadcast rights to both the 2002 and 2006 World Cups.


NO THREAT TO WORLD CUP BROADCAST: According to the information available, Kirch has not let go of the World Cup. He has transferred the rights - valued at 1.9 billion euros - into a holding company based in Switzerland, KirchSport.

While KirchSport is still a fully-owned subsidiary, its location in Switzerland protects it from the administration process, reports say.



This news should come as a relief to Indian broadcast companies like Sony Entertainment Television, the just launched Ten Sports and ESPN Star Sports, all of who are in the running for scoring as far as the telecast rights of the World cup are concerned.

But as things stand the bidding war seems to be turning into a two-horse between Ten Sports and Sony, with SET being seen as the frontrunner but not by much.

Whoever does get the rights there is definitely a much higher value proposition this time round than the 1998 World Cup in France which garnered pathetic viewership. The main reason for this being that as the matches are being played in Japan and Korea this time round, match timings would make automatically get in much higher viewing than in 1998. No matches at unearthly hours of the morning as was the norm in France will certainly work towards garnering much higher viewership.

As far as the bidding goes, the figures being quoted are in the region of $40 million.

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