German mogul scoops the World Cup

A reclusive German billionaire mogul, barely known outside his own country, yesterday scooped up the non-US television rights to the World Cup in 2002 and 2006 for a record $2.2bn, boosting football's leading event to Olympic status and breaking a 25-year hold on the rights by European public-service broadcasters.

The bid by the Bavarian media baron Leo Kirch, one of the world's leading holders of movie and television rights, was "absolutely mind-boggling," an insider at Fifa, football's world governing body, said last night, adding that it marks the first time that a rights "broker", rather than broadcasters themselves, has won the lucrative contract.

The scramble to secure rights country by country will now start, with both the BBC and ITV obliged to deal with Mr Kirch for the rights in the UK.

Mr Kirch, heavily built and nearly blind from diabetes, beat bids by the European Broadcasting Union, which includes the BBC, and IMG, the sport agency owned by Mark McCormack. The loss by the EBU was a further blow to the fortunes of public-service broadcasters, who have been forced increasingly to compete for rights with private companies.

But Fifa's general secretary, Sepp Blatter, said yesterday that Fifa would ensure "ordinary viewers" will be able to see the games, and had retained a veto over any subsequent deals on rights in different countries. "This is our responsibility to make sure that they see it, it is our duty," he said.

Fifa will be guaranteed at least $1bn for the 2002 event, to be co-hosted by Japan and South Korea. Any additional profits will be shared equally between Fifa and Mr Kirch and his partner, the marketing company ISL. That dwarfs the $183.5m in TV rights paid for the 1998 World Cup in France, and confirms football's status as an event nearly equal to the Olympic Games.

The explosion in the value of television sport rights has been sparked by the growing market for pay television, and the promise of saturation coverage once 500 digital television channels are launched in Europe, probably within two years. It is through the pay-TV market that Mr Kirch hopes to make his money, offering wall-to-wall coverage of the matches, on a pay-per-view basis, in addition to selling the live rights to terrestrial broadcasters.

Mr Kirch, 68, is one of Germany's most successful and secretive, media giants. He owns 25 per cent of Premiere, the country's only pay-TV channel, 10 per cent of Mediaset, the company belonging to the Italian magnate and politician Silvio Berlusconi, and 37 per cent of Axel Springer Verlag, publishers of Die Welt and Bild, Germany's biggest-selling daily tabloid with a circulation of around 5 million. His 40 companies worldwide have assets of 7 billion deutschmarks.

He is a devout Catholic, and a close confidant of the German Chancellor, Helmut Kohl, but also owns Sat1 TV network, which broadcasts soft porn.

The son of a wine grower, he made his fortune buying and selling rights to movies and television. His connections to Italy extend back to the 1950s, when he bought the rights to Fellini's La Strada,. He now controls the rights to 15,000 movies and 50,000 hours of television, which he intends as fodder for a new digital pay-TV network to be launched this summer.