Friday, August 05, 2005
Germany: Marrying content and advertising power of newspaper with television
Axel Springer, the biggest German newspaper publisher with papers like Welt and Bild, buys German broadcaster ProSiebenSat. 1 Media for 2.5 billion Euro. Springer is taking full control of the broadcaster and will become the second biggest media group in Germany, as Reuters reports. Bertelsmann, the biggest group, already owns publisher Gruner+Jahr and broadcaster RTL Group reports Sueddeutsche.de (in German). According to Netzeitung (in German) the new group will be the first listed German media group.
As stated by CNN Money "Springer - which already owns 12 percent of ProSieben - said it will buy all vote-carrying common shares and all preferred shares from Saban's group, known as P7S1 Holding. It will own all common and 25 percent of the preferred shares." Haim Saban, media billionaire, and a group of private equity investor in his consortium sell the stake that they bought two years ago.
Reuters states that "with the deal, Springer Chief Executive Mathias Doepfner fulfils a long-held dream of the company's late founder Axel Springer to marry the content and advertising power of its conservative daily newspaper Bild with television." Doepfner is cited: "ProSiebenSat.1 is an investment that will pay off". However a banker said: "I'm not a big fan. The sad truth is that there is a proven track record of zero synergies between print and television."
Meanwhile the German journalist union DJV is worried and warns that the deal would threatens diversity of opinions in the media. In their view the new media group would exert too much power on the German media market. However, the deal still needs to be approved by cartel and media regulators. This will take some time as it is the first cross-media merger for the authorities as Netzeitung states. But there are only few rules on cross-ownership which could stop the deal.
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