Dan Milmo
German media group Kirch has put Formula One up for sale and offered Rupert Murdoch a “substantial” stake in its TV business in a bid to stave off bankruptcy.
Leo Kirch, the 73-year-old owner, has conceded that his media empire must be broken up in order to settle debts reaching more than 5-billion.
The 58% stake in SLEC the company that controls the broadcasting and marketing rights to Formula One is a prize asset and Kirch’s advisers will start soliciting offers before the end of the week.
Bernie Ecclestone, the former owner of Formula One, is said to be interested in buying the SLEC holding for a knock-down 560-million.
The privately owned Kirch empire includes the free-to-air station, DSF, and ProSiebenSat.1 TV operation, a massive film and TV library and the broadcasting rights to the 2002 and 2006 football World Cups.
The Financial Times also reported that Kirch executives have discussed offering Murdoch “significantly increased influence” over KirchMedia Germany’s biggest television business.
Kirch must pay the media tycoon 1-billion in October owing to an option that requires the German group to buy back his loss-making stake in KirchPayTV.
But Kirch has admitted he does not have the cash to pay the option, and will offer complete control of the pay-TV business and a large stake in his free-to-air stations to Murdoch’s News Corporation.
However, Murdoch may be more interested in Kirch’s 40% stake in Axel Springer, Germany’s largest publisher and the owner of the Bild tabloid newspaper.
News of a deal with Murdoch will cause uproar in Germany, where politicians, financiers and media executives are scrambling to forge a survival plan that will keep Kirch’s assets out of foreign hands.