Final whistle for media king Kirch?

A MEASURE of how bad things have got inside the cash-strapped Kirch media empire is the news that broadcasts for World Cup football games in Asia this summer will be made direct from the heart of Munich.

Debt of £4.5bn means Kirch has no money to fly eight announcers to South Korea and Japan. Two will go - but many games will be commentated on from a bank of TVs at the company's HQ. Provided, of course, there still is a company HQ by then.

'No one has ever, ever tried to broadcast the World Cup like this before,' said Rainer Franzke, editor of Kicker magazine, bible of German football. But then Germany has never seen a company like Leo Kirch's before as it careers towards a catastrophic end with no one able to stop it.

The woes of Premiere pay-TV group, which holds the World Cup rights, are part of a mosaic of troubles piling up on embattled Kirch Group. Now 75-year-old Kirch is reported to be just days - maybe hours - away from announcing his retreat from the firm as a way of saving some of it.

The company has been in a decline brought on by crippling debt. It posted a loss of more than £750m last year and, in addition to its debt burden, owes several billion pounds more in obligations to other media companies. Kirch has been unsuccessful in trying to negotiate relief from the banks while global media players such as Rupert Murdoch have been constantly circling, waiting for a chance to break into the lucrative broadcasting market of Europe's biggest economy.

Leo Kirch is trying to sell his controlling stake in Formula One racing and is seeking a way out of the £1bn contract, which runs until 2004, struck with German football clubs to screen their games. His problems have come at a time when football clubs such as AC Milan and Manchester United have become marketing behemoths attracting the elephant dollars of advertisers and broadcasters. But Kirch cannot afford to pay any more and football may be just one more casualty of his corporate meltdown.

Conventional wisdom in Frankfurt and Munich has the finale for the Kirch saga going something like this. Within the next few days, he will step down and give up his majority shareholding in Kirch Media, the still-profitable company that holds the rights to an enormous film library, its five terrestrial TV stations and Bundesliga football matches.

Stakeholders in Kirch Media include Murdoch and Italian Premier Silvio Berlusconi. Talks at the HQ of Bayerische Landesbank, the most exposed of Kirch's lenders, continued on Monday after an unsuccessful weekend.

Apparently complicating any rescue scheme are Hollywood studios which have long-term contracts with Kirch to supply a stream of TV films and series. Paramount, for one, insists its contract be respected and will not entertain any price reduction. The banks make no bones about the fact that, should they end up with the company, it would only be a temporary thing. 'What do we know about the business?' one of them asked the influential Frankfurter Allgemeine Zeitung newspaper.

Murdoch looks like coming out the clear winner. Speculation is that the media baron will get a chunk of film and sport broadcasting rights while Berlusconi acquires the ProSieben and Sat1 private TV channels. The German government finds the prospect of Murdoch moving into the media landscape disagreeable but his presence is the lesser of two evils.

With 40,000 small businesses likely to go to the wall this year, with more than 4m people out of work - and a further 40,000 jobs threatened by the collapse of the Holzmann building company last week - and the prospect of a summer of industrial discontent with the IG Metall union, a little lowering of standards might be a small price to pay if Murdoch can keep nearly 10,000 Kirch employees in jobs. Even if some of them will be broadcasters commentating on football matches being played thousands of miles away.