KirchGruppe (KirchGroup) was a German media group founded by Leo Kirch. The group collapsed in 2002 largely due to the debts associated with the purchase of sports rights for its television channels and the launch of pay-TV services.

The holding company for the group was Taurus Holding which had three major subsidiaries, KirchMedia, Kirch PayTV and KirchBeteiligung. KirchMedia declared itself insolvent on 8 April 2002, followed by KirchPayTV on 8 May 2002 and finally KirchBeteiligung on 12 June 2002 along with Taurus Holding.

KirchMedia[link]

KirchMedia's main assets were KirchSport, which held the TV rights to the World Cup and other sports; 52.5% of ProSiebenSat.1 Media, an owner of major satellite channels; the DSF sports channel; TaurusProduktion, a film and TV production group; and TaurusLizenz, owner of fiction and media rights.^[1]

KirchMedia was declared insolvent on 8 April 2002.^[1]

KirchPayTV[link]

KirchPayTV was majority owned by Taurus Holding, however BSkyB held 22% along with Lehman Brothers (2.4%) and Saudi Prince Al-Waleed (3.12%). The company's main asset was the Premiere pay-TV network.

KirchPayTV filed for bankruptcy on 8 May 2002.^[2]

KirchBeteiligung[link]

KirchBeteiligung's main assets were its majority share of Formula One's commercial rights (through Speed Investments) and its 40.33% stake in the media company, Axel Springer AG.^[3]

KirchBeteiligung filed for insolvency on 12 June 2002, along with the Taurus Holding parent company of the Kirch Group.^[3]

References[link]

Leo Kirch (21 October 1926 – 14 July 2011^[1]) was a German media entrepreneur who founded the Kirch Group.

Life[link]

Kirch was born in Volkach, Bavaria, but shortly afterward his family moved to the nearby town of Würzburg. After completing High school he studied marketing and management as well as mathematics at the University of Munich, graduating in 1952. It was during this time that he gained an interest in electronic media.

In 1956 he purchased the German rights for the Italian movie La strada.^[2] He borrowed money for this venture through an enterprise with a complicated and unclear structure, with ownership distributed amongst himself and various daughters. As his company rose to become one of the most important private media companies in the then West Germany, the country's second public broadcaster, ZDF, came to depend on it heavily for films and other programs, partly as a result of companies that appeared to be competing actually being owned by Kirch. This situation remained for many decades, until the launch of commercial television in 1984. Kirch was the owner of the first private channel, Sat.1 and withdrew his series from ZDF.^{[citation needed]}

In 1985 he purchased a stake in the leading tabloid Bild after the death of former owner Axel Springer. During the 1990s he set up the subscription television service Premiere and became a key player in sports broadcasting rights, paying massive amounts for the rights to the German Bundesliga, eventually to the point where even players of moderate ability could earn multi-million mark salaries. This was consistent with trends happening across much of Europe at the same time. In addition, in 1996 he purchased the rights to the 2002 and 2006 FIFA World Cups for some €1.9 billion^[3] and purchased the rights to Formula One for €1.5 billion.^[4][5]

Even during this decade there were reports of the group being on the edge of insolvency. His large investments in sports broadcasting rights and in pay television were major reasons. In other countries of Europe pay television could be operated profitably, because there were few freely receivable channels. Many programs also aired on Premiere at the same time that they aired on terrestrial television. This resulted in an investment of some €3 billion for only 2.4 million subscribers. Combined with the fact that many of the packages were more expensive than similar packages available, the decoder was easy to crack, resulting in large amounts of piracy. In 2002 these difficulties came to a head and KirchMedia declared itself insolvent on April 8. Kirch himself withdrew itself from the enterprise, but kept up participation in the Swiss arms on his business, transferring sports broadcasting rights to the subsidiary. The insolvency represents the largest insolvency of an enterprise in German postwar history. The next month Kirch sued Deutsche Bank for €100m, claiming that they had questioned the status of the group and disclosed confidential business information in the process.^{[citation needed]}

Kirch and Kohl[link]

Leo Kirch and former Chancellor of Germany Helmut Kohl were on friendly terms for decades. Kirch was always accused of preferential coverage and advertising. Kohl arranged the creation of commercial television as one of his first official acts as Chancellor in 1982; this allowed Kirch to own a TV station and sports broadcasting rights. During the 1999 CDU contributions scandal, it was revealed that Kirch had donated six million DM to the CDU during Helmut Kohl's tenure as chancellor. In addition, Kohl, along with various other CDU/CSU politicians, was revealed to be an adviser to the firm during the insolvency process.^{[citation needed]}

Kirch and Deutsche Bank[link]

Kirch was identified by the Wall Street Journal to be a target of Deutsche Bank's spying scandal.^[6] Moreover, according to the WSJ, the lawfirm that was representing Kirch was the target, and perhaps victim of, an effort to infiltrate a "mole" into the firm in furtherence of the Bank's spying.^[6]

Death[link]

Kirch suffered from diabetes and a heart condition, and due to these became partially blind. He died in Munich, aged 84.

Family[link]

Kirch had been married since 1956 to Ruth Kirch and had a son, Thomas.

References[link]