A change of the guard is only hours or days away at the Kirch group, the media colossus that for so many years bestrode the German and European film and TV arenas.
The 75 year old Leo Kirch is now negotiating an exit that saves face for himself and saves his group from complete break-up. Having held the reins of power for 47 years, Kirch is now expected to give up his majority shareholding in return for a financial injection of Euros600m-800m.
Quite how the transfer takes place and with which partners is still being hammered out. But an end now seems inevitable.
It became so in the last few days when it became clear that Kirch Media, the division that contains the library, rights trading operation and owns the ProSieben and Sat 1 free-TV channels, was close to insolvency. Total debts for the wider Kirch Group are put variously between Euros6.5bn and Euros8bn with most of that retained at Kirch Media. Analysts, bankers and investors have all come to realise that were a collapse allowed at Kirch Media, where the free channels are potentially a profitable core, it would almost certainly bring down the rest of the group.
In addition to the bank debts the Kirch group has trade debts measured in the hundreds of millions of dollars, owing particularly to the Hollywood studios. And it may be forced to pay out still more if two "put" options obliging it to buy back share stakes were exercised against it.
The Kirch group has had previous skirmishes with bankruptcy and survived but this time, having misread the depth of the local recession (and maybe the impact of September 11) it seems that Leo Kirch has used up most of his political capital and credibility. With Dresdner Bank unremitting in its insistence on calling in a major loan and News Corp seriously threatening to ask for Euros1.5bn for its stake in the loss-making Premiereworld pay-TV operation, Kirch began serious negotiations with its creditor banks earlier this month. While these had originally been scheduled to run on into May, a deadline of Mar 31 is being talked about in some quarters.
What has also made a difference is the apparent unwillingness of Kirch Media's minority shareholders to let the banks determine a solution on their own. Now Silvio Berlusconi's Mediaset, Rupert Murdoch's News Corp and Saudi Prince Al Waleed Bin Talal Abdul Aziz's Kingdom Holdings appear to be offering the necessary financial lifeline in return for Leo Kirch's head. They have not been prepared to pay up for the swathe of minority stakes in Formula One and Spanish broadcaster Telecinco with the core group still a heartbeat away from collapsing.
According to some reports Leo Kirch has now accepted his fate, and will see his family holding drop from 73% to under 50%, if he can be allowed to retain a slice of (and perhaps a licence fee from) the World Cup football rights which the group currently controls. That remains to be seen.
While the current plans see a rescue for Kirch Media, which until last was still forlornly talking about a stockmarket flotation in 2004, there is still the major issue of KirchPayTV and Premiere to be resolved. Despite being Germany's only heavyweight pay-TV operation this unit is losing between Euros1.5m and Euros2m a day and will run out of cash by September. Through a combination of poor marketing and high subscription charges, pay-television has failed to grab the German public, while on the supply side the operation is committed to expensive, long-term contracts with its film suppliers. In this respect a takeover by News Corp could quickly change the economics of the business.
For the moment it is not clear whether News Corp, for all that it has long sought a major piece of the German broadcast market, would be prepared to go it alone. In political terms, foreign intervention and Rupert Murdoch have long been resisted. But here too the tide may have turned. A consortium of investors, perhaps including other studio-owning groups, may be able to present themselves as rescuers bringing balance to a business that is badly out of control.
The alternative is break-up, job-losses, even less competition in an already consolidating German TV sector and the world's number three economy unable to offer its 80 million citizens pay-TV.