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Business

Game On

The German soccer league has enough money to support itself for the remainder of the year, league officials announced, avoiding a possible financial disaster sprung by the Kirch Group's insolvency.

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Something to cheer about

The fate of Germany’s soccer leagues is in safe hands – at least for now.

A week of speculating who would pay the league its broadcasting money after KirchMedia filed insolvency, the country’s soccer league announced the league’s money is safe for the remainder of the year.

The announcement Thursday was a sigh of relief for the league’s smaller teams, who heavily depend on the 1.53 billion euro KirchMedia is paying to broadcast the top division games from 2000 until 2004.

German taxpayers breathed a sigh as well: politicians, including Chancellor Gerhard Schröder had been mulling supporting the league with state guarantees which might have been financially supported by German citizens.

After a the idea caused a furor both in the populace and the political establishment, the offer was pulled off the table. But the question of how to pay the league the 100 million euro owed it by May 15 remained.

On Thursday, the announcement came from German Soccer League.

"The installment is secured," president Werner Hackmann told reporters. "We will not have any short-term liquidity."

Future uncertain

What remains to be seen is whether Kirch will be able to keep the soccer rights until 2004. Though Hackmann waxed optimistic on Thursday, many believe the billion euro indebted Kirch Group won’t be able to hold out that long.

The German Soccer League said it had begun talking with other broadcasters about their interest in taking over Kirch’s broadcasting rights. But the heads of some of the country’s public broadcasters said they were not ready to pay the massive sums Kirch paid for exclusive rights.

The Bundesliga games were the lynchpin of Kirch’s pay TV venture Premier Live, which he launched in 1997. After initial success and heavy investment, the venture took a turn for the worse. The subscriber count stagnated and the channel began bleeding millions of euros. Analysts estimate the channel makes up at least half of Kirch’s estimated 6 billion euro debt.

A salvage plan for the embattled channel is still in the works with Rupert Murdoch, a Premier shareholder, continuing behind the scenes negotiations for a possible takeover, according to various reports.

Until something happens, the German Soccer League will have to hold out, something that they don’t mind doing. Hackmann said Thursday that they would treat next season the same as this one – as if a Kirch insolvency had never happened.

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