Leo Kirch’s media empire is shaky, and everybody knows it. Kirch Group companies such as pay-television station Premier disappointed in 2001, pressuring finances. But far worse, the group has taken loans beyond its means, and payback deadlines have begun to expire.

When the 75-year-old Kirch, lion of Germany’s television age, looks at his books, he sees debts: some €2 billion owed to the Bavarian bank Bayern LB, roughly half a billion to HypoVereinsbank and Deutsche Bank each, plus €460 million to Dresdner Bank. All in all, the sum of his outstanding credits nears €5 billion.

When Dresdner Bank came to collect, Kirch Group requested an extension and got it. But the new deadline has passed, and Dresdner has yet to collect.

It is one of the mysteries of modern business that repayment of huge corporate debts can be delayed, while tiny ones are often small businesses’ and individuals’ undoing. Governments find their ways of sympathising, too.

Chancellor Gerhard Schröder reportedly interceded on Kirch’s behalf last Sunday, meeting Deutsche Bank chairman Rolf Breuer to discuss the group’s future.

There are two big reasons why Kirch wins support from German banks and leaders.

Money and society

First, economic stability. Kirch Group is a giant, and if it falters the German economy will feel it.

The banks to which the group owes money are spread out through the country, and once the first one demands repayment, it risks a domino effect with default after default. That would not only bother Germany’s banks at a time when the economy is underperforming, it would likely set in motion a sell-off of Kirch’s assets and debts.

Second, there are societal risks associated with such a potential sell-off, supposing Kirch cannot dream up another solution. It could ruin the balance of power in German broadcast media, which at present is dominated by Bertelsmann’s RTL and Kirch’s ProSiebenSAT.1.

In the media world, vultures do not hesitate to circle, and Rupert Murdoch’s News Corporation's leverage, through financial agreements, could be instrumental in any bid to buy Kirch out.

Foreign buyout would not only provide shock treatment for the empire’s financial arrangements; it might also spur upheaval on the airwaves during an election year. Though the centre-left Chancellor might benefit politically from the conservative stalwart Kirch’s instability, Schröder might also be able to neutralise broadcast opposition by saving him in a time of peril.

Fiscal debt, political debt – it could all be dumped on Kirch’s head, and this would raise difficult questions for the long-stable German democracy.

How does a modern federal republic, held together partly by the perception of unity broadcast by home-grown mass media, fare when media falter?

Or perchance when they sell out to foreign owners?

We may find out – fittingly, under the government of Schröder, the "media Chancellor" renowned for mastering the telegenic photoshoot and the soundbite, for winning the mandate of society by winning the airwaves that define it.