KirchMedia scores higher profits

Rights to the 2002 World Cup are still in doubt

German broadcaster KirchMedia, which holds the rights to the 2002 and 2006 World Cups, has reported a 42% rise in core profits for the first half of 2001.

We cannot imagine that in view of the French and British teams both being favourites, the UK broadcasters will want to deprive their viewers of the highly attractive event

Dieter Hahn, KirchMedia

The results were boosted by the sale of German first-division soccer games rights and improved profits in film rights trading, which offset a decline in advertising revenue.

Negotiations between UK broadcasters the BBC and ITV and KirchMedia for the television rights to the 2002 World Cup are currently stuck on disagreement over the price.

"We are confident we will reach an agreement with French and British broadcasters on the basis of free market conditions at a fair and reasonable price," said Dieter Hahn, chief executive designate of KirchMedia.

KirchMedia, which reported results for the first time ahead of merging with ProSiebenSat.1, is a subsidiary of the privately owned Kirch Gruppe.

Sporting the rights

KirchMedia holds the broadcast rights to Formula One for 100 years and the next two World Cups, the biggest televised sports events after the Olympics.

Hahn: "A fair and reasonable price"

The stand-off between the BBC and ITV joint bid for the 2002 World Cup and KirchMedia centres on the £170m price tag. The UK broadcasters have offered £50m.

"We cannot imagine that in view of the French and British teams both being favourites, the UK broadcasters will want to deprive their viewers of the highly attractive event," said Mr Hahn.

The rights have become more valuable, in terms of attracting advertising revenue, since England's World Cup qualification last week in Greece.

Big results score

KirchMedia's strong sports rights portfolio and distribution platform will provide a strong base for growth in the future, the company said in a statement.

Sales rose 15% to 3.25bn Deutschmarks ($1.51bn) and profit before interest, tax, depreciation and amortisation (EBITDA) jumped 42% to 514m DM.

On Sunday, KirchMedia said it had sold on the broadcast rights in South America for the 2002 and 2006 soccer finals for over $860m.

"Until now, 2001 has been a very successful year for us," said Mr Hahn.

"The results clearly show the positive development and solid financial structure of KirchMedia," he added.

KirchMedia gained control of the rights to Formula One last week after it raised its stake in subsidiary EM.TV to 58.3% from 36.8%.

Mr Hahn said he does not expect the advertising market to pick up before the fourth quarter of 2002, with a real recovery coming in 2003. He said this was a conservative forecast.

Merger plans with ProSiebenSat.1 were on track and the company would report more details in the first quarter of 2002, the company said.