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BSkyB writes off Kirch
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February 8, 2002: 4:01 a.m. ET
Europe's no. 2 pay-TV company posts Q2 loss, writes off stake in Kirch
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LONDON (CNN) - Rupert Murdoch's British Sky Broadcasting posted a massive second quarter loss after writing off the value of its stake in KirchPayTV.
The move by Europe's second-largest pay-TV company highlights Murdoch's scepticism about loss-making KirchPayTV and its debt-laden parents' ability to buy back BSkyB's 22 percent stake in Germany's biggest pay-TV company.
BSkyB has an option to force Kirch to buy the stake in October, or earlier, if the KirchPayTV has not been listed on the stock market, the company said, saying it does not have "sufficient confidence" that Kirch can buy the stake.
Murdoch's London-based company said on Friday the cost of the write-off was £985 million ($1.4 billion), pushing its second-quarter loss to £1.26 billion, or 66.7 pence a share, compared with a year-earlier loss of £133 million, or 7.2 p a share.
KPTV's biggest shareholder Taurus Holdings, formally known as Kirch Holding, would have to pay  1.3 billion plus interest, if BSkyB exercised its right to sell, BSkyB said.
BSkyB's stock, which has lost more than a third of its value over the last year, rose 2.8 percent to 722 pence in early London trading on Friday on relief the company was washing its hands of Kirch.
BSkyB, which is 36 percent owned by Murdoch's News Corp, bought its stake in KirchPayTV in December 1999. But Kirch Holdings, which owns the rights to the Football World Cup and Formula One, is struggling with debts of more than $5 billion, due largely to its foray into pay television.
Pay-TV companies, like BSkyB and France's Canal Plus, are losing money as they attempt to win customers to their platforms and pay huge sums of money for the rights to sporting events and films.
Rumours have been circulating that BSkyB's Chairman Rupert Murdoch may try to take over some of Kircsh's assets as the German group fends off creditors. But, BSkyB Chief Executive Tony Ball said the company would not renegotiate its option and put new money into Kirch. 
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