KirchMedia, the once mighty German media giant, shut down on June 16, 2003 after a flurry of attempts to buy it. It looked like the cash-strapped company was going to be owned by American entrepreneur Haim Saban, until the parties couldn't agree on final terms and nullified the deal after the contract expired on May 31. Management and creditors had hoped to restructure the company to maintain it until the market climate improved to sell it, but shareholders voted to sell off its main assets into separate companies.
Kirch's broadcaster, ProSiebenSat.1, will cherry pick 2,000 of Kirch's movies for its family of free TV channels in a 10-year volume deal, according to THE HOLLYWOOD REPORTER. The remaining rights, which include 40,000 hours of programming, will be sold off. The deal, valued at around $832 million, will not be paid in a lump sum. ProSieben will split advertising revenues with Kirch to allow it to pay off its debts to creditor banks. ProSieben will now be in control of its own acquisitions, dealing directly with studios and independents for product.
ProSieben shareholders approved a capital boost to issue up to 97.2 million new shares to finance restructuring and debt-reduction. That float is estimated to raise about $665 million. Kirch's creditor banks have pledge a further $178 million should the stock float not raise sufficient cash. The banks will be given about 3% of ProSiebenSat.1.
ProSieben's new supervisory board is made up of KirchMedia management and its creditor banks.