BSkyB 'to take over Kirch pay-TV'

The pay-TV network at the heart of the implosion of German media group Kirch could be snapped up by Rupert Murdoch after all, reports say.

According to the UK's The Business newspaper, Mr Murdoch's News Corp has prposed a compromise plan to put its BSkyB satellite network in charge of running the KirchPayTV.

A cash injection would come not only from News Corp, which has 22% of KirchPayTV, but from other investors incloding Lehman Bros and Saudi investor Prince Al-Waleed bin Talal, the paper said.

The deal would depend on the banks holding most of Kirch's 6.5bn euro debt agreeing to restructure them, it said.

The move, should it come about, would immediately make Mr Murdoch top dog in German pay-TV.

The only way is up

That, at present, may not be saying a great deal.

A multiplicity of cheap cable channels made Premiere World, KirchPayTV's main operation, relatively unattractive, and the huge costs of keeping the business going are key to KirchMedia's descent into administration.

But as one of the most successful pay-TV operations in Europe, appointing BSkyB as manager - but not as owner, given promises to the City of London that no more of the service's money would flow to Germany - would help rebuild confidence.

If the deal were to go through, it would be News Corp which either bought the channel or funded it.

"Everyone is interested in BSkyB running it," a source told The Business.

"That doesn't mean a deal will be done, but there is a general recognition that Sky and News Corp... (are) one of the few groups in the world which is good at running the pay-TV business."

Fast cars, big deals

The dismemberment of Kirch could well have other implications, if the Independent on Sunday is to be believed.

The paper said that Kirch's bankers are poised to take control of Formula One motor racing away from current supremo Bernie Ecclestone and give it to the carmakers.

Bayrische Landesbank, JP Morgan Chase and Lehman Bros are this week to take Kirch's 58% stake in Formula One in exchange for 1.6bn euros in debts owed to them.

That, the paper suggested, could be then sold on to the manufacturers, whose unhappiness with their cut of the proceeds of televising the races has led them to suggest starting a rival championship in 2008.