German Media Mogul Leo Kirch Dead at 84
COLOGNE, Germany – Leo Kirch, the German mogul who built one of the world's largest media empires, and lost it again, died Thursday in a hospital in Munich. He was 84.
Before his television conglomerate collapsed in 2002, under billions of euros of debt, Leo Kirch was mentioned in the same breath as Rupert Murdoch, Silvio Berlusconi or Sumner Redstone. Like them, Kirch built a television empire by anticipating, and then driving, shifts in viewing habits and by exploiting gaps in the market. Like them, he was a mogul whose success was as admired as his methods were often controversial.
But unlike his mogul peers, Kirch shunned the spotlight. Reserved and publicity shy, he gave only two interviews his entire life. Only a few facts about him were publicly known: that he was a strict Catholic, like his good friend, former German Chancellor Helmut Kohl, and that diabetes had left Kirch nearly blind, creating the odd image of a media mogul who couldn’t watch TV.
The controversies surrounding Kirch – which included dubious loans to Kohl which became part of a wider campaign financing scandal as well as various Byzantine banking and business deals – were nothing compared to the current scandals engulfing Murdoch and Belusconi. But given Kirch’s powerful position in the German media market, they were enough to fuel speculation and suspicion.
At its peak, Kirch’s empire controlled nearly half of Germany’s free-to-air television market as well as its leading pay TV company, 40 percent of its largest publishing house and a major stake in its top film production firm. He held stakes in Italian and Spanish networks and controlled both the Formula One racing circuit and European-wide broadcasting rights to the 2002 and 2006 soccer World Cups. As the world’s largest licenser of film rights with the biggest film library in the world outside the U.S. studios, Kirch was Hollywood’s best friend and rich German uncle.
Kirch was one of the first to see the potential of selling the rights for feature films to TV channels, a business that’s now a foundation of the modern film industry.
In 1956, with money borrowed from his wife, Kirch bought the German rights to Federico Fellini’s La Strada. Soon afterwards, with more borrowed cash, he bought the rights to 400 films from U.S. studios Warner Bros. and United Artists and sold them on to German broadcasters.
Over nearly 50 years, Kirch’s business model remained largely unchanged. With ever-increasing amounts of debt he bought ever-larger libraries of rights, which he sold on to German television channels.
He diversified. When commercial television launched in Germany in the 1980s, Kirch bought in, taking control of networks Sat.1 and Pro7, merging them to create ProSiebenSat.1, which he took public in 2000. He also bought a 40 percent stake in European publishing giant Axel Springer. But buying and selling rights remained the core of Kirch’s business till the end.
It was the rights business, and the debt that came with it, that finally undid Kirch’s empire. He lost billions buying up rights for his German pay TV channel Premiere, which never turned a profit. A similarly ambitious deal to buy the Formula One racing circuit, left him a further billion in debt.
In 2002, the mountain of debt collapsed and with it, the Kirch media empire. In June 2002, KirchMedia filed for insolvency protection. It was the biggest bankruptcy in German post-war history.
The biggest bits of the Kirch empire have since been split up and sold. HaimSaban bought ProSiebenSat.1 and then sold it to private equity firms Permira and KKR. Rupert Murdoch’s News Corp. bought a controlling stake in Premiere, rebranding it Sky Deutschland. Kirch’s creditors took control of Formula One before selling it to investment group CVC.
But Leo Kirch never left the life. Five years after his company collapsed, he was back in the news, buying a stake in German production and rights group Constantin Medien. He also made a (failed) bid to acquire the rights to German Bundesliga soccer league.
And he kept fighting. Kirch’s last public appearance was in court earlier this year when he testified in a suit against Rolf Breuer, the former CEO of Deutsche Bank, who Kirch blamed for his company’s demise. Obviously ill, Kirch had to be rolled to the witness stand in a wheelchair. The court had to stop questions after just over an hour. But Kirch had his say.
Leo Kirch is survived by his wife Ruth and his son Thomas, a German TV executive.