Comeback: Leo Kirch Back on Track

Implications: Leo Kirch, whose media group collapsed in 2002 in Germany’s then largest bankruptcy, has made a surprising comeback. The media entrepreneur bought the rights to German league soccer on October 9, thereby guaranteeing higher revenues for the league’s various clubs. The deal with Kirch was reportedly controversial among soccer clubs because his empire’s collapse led to significant financial difficulties for some of them.

Analysis: The German Soccer League DFL and Kirch reached an agreement to market rights to German league soccer matches. DFL, eager to narrow the gap with richer competitors, including the English Premier League, will also jointly produce pay-TV soccer programming with Kirch with the hope of attracting a greater number of potential bidders.

Kirch has made headlines in recent years largely as a result of his relentless pursuit of Deutsche Bank regarding remarks made in early 2002 by Rolf Breuer, then Deutsche Bank chairman, which appeared to question Kirch’s creditworthiness – which Kirch blamed for the financial collapse of his group a few months later. The return of Kirch is all the more remarkable because most observers had written off his career. According to Kirch’s biographer, the media mogul had continued to work six days a week at his office in Munich whereas his legal action against Deutsche Bank didn’t seem like a full time job.

A herald of Kirch’s comeback in the sports media business was a side note in late September, when it emerged that he had purchased an 11.5 % stake in EM.Sports Media, the sports media group that runs the sports channel DSF, for example.

Even though it has been said in official statements that Kirch is only marketing the TV-rights on behalf of DFL and not purchasing them for himself one has to be aware of future moves. Kirch is obviously back in the business and owns (part of) DSF. After the surprising announcement in regard of the conclusion of the rights deal with DFL other unforeseen moves may follow…