Kirch’s Formula One Stake for Sale
BERLIN (AP) _ German media giant Kirch Group said Wednesday it is ready to sell part of its stake in Formula One motor racing in its struggle to reduce more than $4 billion in debt and avoid being broken up to pay creditors.
Kirch spokesman Hartmut Schulz said the company was ``open for other equity investors, particularly for the carmakers″ involved in Formula One. Kirch has made offers to the automakers in the past, which were not accepted, he said.
Kirch Group owns 58 percent of SLEC, the holding company that owns the TV rights to Formula One, one of the world’s most watched sports. Formula One is one asset of many that Kirch may have to sell to stay afloat after amassing debt in an ambitious expansion drive.
Carmakers that race in Formula One include Ferrari, part of Italy’s Fiat; DaimlerChrysler’s Mercedes-Benz; Ford Motor Co.’s Jaguar; BMW, and Renault.
Mercedes head Juergen Huppert said Wednesday at DaimlerChrysler’s annual press conference in Germany that there were no talks with Kirch about buying a stake in Formula One, but wouldn’t rule out the possibility.
The big car manufacturers, including DaimlerChrysler, BMW, Fiat and Jaguar, have been uncomfortable with a media company controlling Formula One and there has been speculation they may seek a larger role. Reasons include worry that the races will be shown only on pay TV. Some car companies have threatened to start a separate racing series.
Kirch has denied reports it received an offer from Formula One boss Bernie Ecclestone to buy the stake back for about half the $1.4 billion that Kirch paid for it.
Kirch’s empire includes the world’s largest film rights library outside the United States, major German commercial TV broadcasters reaching a quarter of all viewers, a money-losing pay TV venture with Rupert Murdoch’s British Sky Broadcasting and a 40 percent stake in Axel Springer Verlag, which publishes Germany’s main mass-circulation daily and a range of other newspapers.
In addition to the debt burden, Kirch faces statements by British Sky Broadcasting that it will exercise an option to sell a 22 percent stake in the pay TV venture back to Kirch for $1.5 billion, and an option from Axel Springer to sell back an 11.5 percent stake in ProSiebenSat.1 broadcast group for $667 million. Analysts say Kirch doesn’t appear to have the money.