RTL Buys Major Share of Gruner + Jahr: "We Want to Create a Cross-Media Champion"

The Gütersloh-based group has long pursued a strategy of mergers to create more powerful media companies in European markets in order to compete with international tech platforms on a national level.

Gruner + Jahr includes titles such as Stern, Geo, Brigitte, Essen & Trinken, Schöner Wohnen and Gala. It also includes younger brands such as Chef to this. In 2020, sales at the Hamburg-based magazine publisher were around 1.14 billion euros.

Bertelsmann and RTL CEO Thomas Rabe spoke of a merger between RTL Deutschland and Gruner + Jahr, saying they wanted to create a cross-media "champion. An organization is to be created for this purpose, with details to be determined in the coming months. Combined, the two units would have had revenues of €2.63 billion in 2020. Rabe emphasized that the merger was not a cost-cutting program, but a growth program.

"It will create a journalistic powerhouse with the content expertise of more than 1,500 journalists," Rabe said. The merger would enable both sides to better exploit their potential. For example, exclusive content such as documentaries will be created in cross-media editorial teams. The goal is to play out major research across multiple media genres. There will probably be overlapping departments, and the identity of the individual brands is to be preserved. Annual synergies of around 100 million euros could be achieved in the long term, the majority of which will be revenue-driven, i.e. growth-driven. No details have yet been released about the future management structure of the organization.

However, RTL is not taking over all of the Hamburg publisher's businesses. For example, Bertelsmann will retain its 25 percent stake in the Spiegel Group and its stake in the DDV Media Group, which includes the Saxon Newspaper heard

According to Rabe, Hamburg will remain Gruner + Jahr's headquarters. In the future, there will be a Gruner + Jahr Deutschland GmbH, to which the publisher's core publishing businesses will be transferred. Around 1700 employees will be based in Hamburg and the other current locations, including 800 journalists. Major relocations are not planned, he said. The German Journalists' Association (DJV) demanded that RTL Group maintain journalistic jobs in Hamburg and Berlin and their collective bargaining agreements after the takeover of Gruner + Jahr. The German Journalists' Union (DJU) expressed similar sentiments to Verdi.

In recent years, the publishing house Gruner + Jahr withdrew from foreign markets, such as the Netherlands, Spain and Austria. The company wanted to concentrate more on the domestic market. Some time ago, it became known that the publisher was also divesting its French magazine division with the subsidiary Prisma Media, which is considered the leading consumer magazine publisher in France.

RTL Group contributes the comparatively largest share of revenues in the Bertelsmann Group portfolio. RTL Group expects its own revenues to be €6.5 billion in 2021.

In February, it was announced that Mediengruppe RTL Deutschland and the Hamburg-based magazine publisher were exploring closer cooperation. Various options were to be examined. The aim was not only to cooperate more closely in various fields, but also to develop a joint growth strategy.

Bertelsmann has been focusing on dovetailing the content of its divisions for some time now. This is clearly visible in the media sector: Magazine brands, TV and the audio division exchange content and enter into collaborations for projects. For example, joint documentaries or podcasts are being created. Behind this is also the "Champions" strategy - in other words, size in a market environment. Bertelsmann CEO Rabe has repeatedly emphasized in recent months that he wants to create national "champions" in European markets in order to be able to counter international streaming competitors like Netflix and Amazon regionally. Rabe said of RTL and Gruner + Jahr: "We want to move from selective cooperation in individual areas to systematic cooperation."

RTL also examined options for other countries, with varying results: In France, RTL Group holds shares in the M6 television group. This is to merge with the French TF1 broadcasting group by the end of 2022. RTL Group would first contribute its entire stake there to the merged company and then sell shares to TF1 owner Bouygues. In the end, RTL Group wants to be the second-largest shareholder in the new group.

In the Netherlands, RTL Nederland plans to merge with John de Mol's media company Talpa Network in 2022. RTL's streaming service Videoland is to play a strategically important role. In Belgium, RTL wants to divest its TV and radio stations.