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Wednesday, 20 March, 2002, 22:57 GMT
German media giant sheds jobs
Georg Kofler - Premiere boss
Georg Kofler took over Premiere last month
The troubled German media giant, the Kirch Group, is to cut almost a third of the staff in its television sector.

Its pay television station, Premiere World, owns the rights to the next two football world cups - this year's and the one in 2006.

It has some 2,400 employees, and has contributed to the almost $6bn (6.8bn euros) debts which the whole Kirch group has run up.

Correspondents say the decision will be another blow in a country where unemployment has already crossed the psychological threshold of four million.

Debts

The Kirch group accumulated the debts to pay for an ambitious expansion which failed to generate a return.

The subscription TV operation lost more than $800m last year.

Despite having exclusive rights to cover premiership football events, Premiere World has attracted few subscribers - 2.4 million out of about 34 million television households in 2001.

KirchGruppe boss Leo Kirch
Leo Kirch has made difficult decisions
The group has been in difficult negotiations with creditors, increasingly impatient for repayment.

Georg Kofler, who took over running Premiere World last month, said the rescue plan would enable the operation to break even with fewer subscribers.

Among the group's other assets are the media rights to Formula One motor racing.

A spokesman has indicated that the Kirch boss Leo Kirch is willing to sell those rights.

Unemployment

The BBC economics correspondent says there are persistent rumours that the media magnate, Rupert Murdoch, is interested in taking over part of the Kirch Group.

Conservative contender for chancellor Edmund Stoiber
Edmund Stoiber has based his election campaign on job creation
Hours after the announcement of job cuts, KirchMedia and broadcaster ProSiebenSAT1 - Germany's biggest broadcaster - said they were abandoning their long-standing plans to merge.

Last month, unemployment in Germany crossed the four million mark - in a blow to Chancellor Gerhard Schroeder who faces an election in September.

But analysts also suggest that Mr Schroeder's challenger - Bavarian leader Edmund Stoiber - is unlikely to escape unhurt if Kirch sheds jobs in his heartland.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Dominic Di-Natale
"Kirch needs cash desperately"
See also:

06 Feb 02 | Europe
Jobless put Schroeder on the line
28 Dec 01 | Business
No respite for German economy
24 Feb 02 | Business
Leo Kirch: 'Murdoch is a shark'
08 Mar 02 | Business
Kirch denies ProSieben sale rumours
22 Feb 02 | Business
KirchGruppe merger falls apart
21 Feb 02 | Business
Kirch 'open' to offers for F1
15 Feb 02 | Business
Kirch seeks bailout
08 Feb 02 | Business
German media giant under pressure
13 Dec 01 | Business
Breathing space for Kirch
07 Dec 01 | Business
Murdoch 'mulls Kirch takeover'
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