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Media scientist on investor KKR "A new German media player is emerging here"

The investor KKR is a "grasshopper" that is currently on a "shopping spree" in the German media market, said Gäbler. For example, KKR bought Tele 5, an entertainment company and a film archive. His strategy: he will invest and sell again - just like a few years ago with the German media group ProSiebenSat.1. In the end, the investor was able to generate a profit of half a billion, said Gäbler.

KKR will want to expand Springer's profitable business areas: Springer will continue to rely on "image" and the digital rubric business, the media scientist estimates. However, he sees the former prestige project "Die Welt" in danger.

The media scientist Bernd Gäbler considers KKR to be a "grasshopper" (Imago / Reiner Zensen)

The complete interview for reading:

Christine Heuer: "Bild", "BamS", "WamS" and "Die Welt" are newspapers that are best known to the readers of the Springer Group. Like all other print producers, however, Springer is also fighting against falling print runs, and economic survival has become difficult. Today it will be official: US investor KKR will join Springer. Why? And what will this change at Springer, especially, of course, in the publisher's newspapers?

- I am now talking to media scientist Bernd Gäbler about this. Good morning first of all!

Bernd Gäbler: Good morning, Ms. Heuer!

This year: Mr. Gäbler, why does Springer need an investor at all, is it that serious?

Gäbler: Yes. KKR is classically what Franz Müntefering used to call a grasshopper, i.e. a private equity company that is currently on a shopping spree in the German media market, is putting together a kind of new media group itself and is joining Springer with an enormous size - i.e. 20 Percent of the shareholders have approved. That means you have the analysis that Springer is convertible. Perhaps with three key words: growth - Springer should get bigger -, digitization and profitability should increase, especially through acquisitions.

This year: In other words, KKR promises to be profitable above all else.

Gäbler: Yes. KKR invests in companies and usually sells them after a few years - five to seven years. We already know KKR in Germany, from 2007 to 2014 KKR was on board at ProSiebenSat.1 and also trimmed this TV station very strongly towards profitability. And then after the years earned half a billion euros, which is not that much for KKR.

This year: Has ProSiebenSat.1 been in good hands?

Gäbler: No, by and large not, especially because some content was slimmed down that was not profitable. Among other things, the news channel N24 was sold back then - and where to? Hahaha, after Springer, who tried to integrate it into the "world" group, but that didn't work very well either.

This year: So there we probably already have the first candidate for deletion. KKR is now saying that they will not have any influence on the content. Can it be, if you hold a fifth of the shares, that you really stay out of the business because of this?

KKR "defines expected results"

Gäbler: Well, content-related influence in the sense that this journalist has to write this way and that, it won't happen that quickly. As a rule, KKR does not immediately intervene in operational management, but rather appoints the supervisory boards and then defines expected results. It's the same here at Springer. One can assume that Springer rests on two pillars that will continue to exist. The first is of course the strong brand "Bild", despite all the gigantic circulation losses, including the newspapers, a kind of tabloid fair with a lot of online products of all kinds is developing around "Bild". The second pillar is the so-called digital classifieds business. These are job exchanges, real estate brokers and so on, Springer already has a lot: StepStone, Idealo, Autohaus24 and, and, and. That will certainly be internationalized, there will be acquisitions. And then there are the unprofitable areas that are at risk. This is the so-called blue group, in other words "Die Welt" and everything that is now part of it across the media. A result corridor has been defined, you don't know how big it is. The Springer management gives this out as a guarantee of existence, but that can be doubted. Because Springer has already made cuts in its own tradition in the past, selling many print products, including the "Hamburger Abendblatt" and "Hörzu" to the Funke media group.

This year: Mr. Gäbler, let's do it now: will Springer's newspapers change?

"Journalism is becoming a kind of subdivision in the convergence economy"

Gäbler: In the sense that you will immediately see a journalistic influence, I don't know, but it is clear that they will also be oriented towards sales and an abundance of by-products that will be available online. I do not think that you will change the leadership of the "Bild" newspaper tomorrow, because what is brand there - simply strong, powerful tabloids - that will certainly not decrease. It is rather the tendency that we notice in general: journalism is becoming a kind of subdivision in the convergence economy, i.e. among those who now offer streaming services and whatever.

This year: I read that you are particularly worried about "Die Welt" because "Die Welt" is making the greatest losses, aha, and rightly so. Is "Die Welt" about to end?

Gäbler: For sure. You can say that you can see that on the US market. At the moment, large newspapers are almost exclusively in existence as objects of prestige for individual wealthy people: In other words, the "Washington Post" by Amazon boss Jeff Bezos or the "Boston Globe" belongs to John Henry and so on. It's a bit different with us, the "FAZ" has a FAZIT Foundation, where Deutsche Bank is heavily involved. But it is clear that these newspapers as a whole have a difficult future. "Die Welt" was a prestige object by Springer, once bought from the British, that's why it is still held for a while. But as I said, there are already farewells to Springer traditions, especially to the printed "world". That is why "Die Welt" as a newspaper, ie the blue group as a whole, is in danger. We'll see how that evolves over time. There will be reductions in unprofitable areas, perhaps employees will be involved in other areas when these areas become more profitable.

This year: Many have recently observed that the "Bild" is coming back to its boulevard level with a particularly strong impact. Does Springer earn more money, Mr. Gäbler, if, for example, the machete killer from Stuttgart is shown murdering?

"It is an economic orientation of the Springer publishing house"

Gäbler: It's always a negotiation with the audience. For a while - we know from the past, when there were these anti-Springer campaigns - Springer worked very strongly ideologically, for example against the student movement or something else. Springer paid for that with a loss of circulation. Now it is the case that under Julian Reichelt the "Bild" newspaper has become more of a combat paper again, not as ironic as it used to be under Diekmann. This combat blade profile can last for a while, but does not protect against circulation losses. So there will be a lot more around "Bild", maybe also direct purchases of products and the like, and profitability will increase. But this deal is a mega-deal for the German media market. The German media market plays a significantly smaller role worldwide than it used to. And Springer should be, let's say, number one among the little ones - i.e. Funke, Holtzbrinck, Burda. This deal has this potential, it is an economic orientation for Springer-Verlag and a reorientation.

This year: Would Germany be missing something without "Bild", "BamS" and "Welt"?

Gäbler: Well, sure. There are countries that are even more strongly influenced by individual tabloids - like Austria by the "Krone" - and there are countries where there is still greater competition between four or five tabloids of this type, for example in England. That doesn't make them softer. When the competition is there, they try harder to outdo each other. That is not the case here. What is still interesting is that KKR - this is largely overlooked - is on a shopping spree through Germany. You have bought a transmitter, Tele5, you have bought an entertainment company, i & u from Günther Jauch, which no longer belongs to him, but is still there. You have bought a film archive, Universum Film, and a film production company, Wiedemann & Berg, that is the company that produced the Oscar-winner "The Lives of Others", among other things. A new German media player is emerging here around KKR, that must be taken into account.

Statements by our interlocutors reflect their own views. Deutschlandfunk does not adopt statements made by its interlocutors in interviews and discussions as its own.