Axel Springer’s US business: under closer scrutiny

Springer has completed the acquisition of the US media company Politico. The affair surrounding “Bild” boss Reichelt also shows that problems with corporate culture can be expensive in the United States.

How can the story of a former German newspaper publisher become a modern, globally operating media group best be told? The Berlin media company Axel Springer has gone among the filmmakers: It has put a 30-minute clip online. Actors resurrect the founder of the publishing house, Axel Caesar Springer, who died in 1985. With the also deceased “Spiegel” founder Rudolf Augstein, he leaves the paradise in which they usually sit in two beach chairs by the sea, and see what has become of his publishing house – and of this world.

Springer is committed to growth all over the world

Fittingly, the film has an English voice over artist. Springer and Augstein, who speak German, are subtitled. All of this makes sense: it is an explanatory film, not least for the international audience, who asks themselves who this Axel Springer actually is. This question arises in different corners of the world. Springer has been focusing on growth all over the world for years.

Almost ten years ago, CEO Mathias Döpfner and senior employees went to Silicon Valley for a while to get a taste of the future and to establish contacts in the US. The group also staged this on film, in another clip. Hoodies instead of suits included. The board of directors sits in the wood class on the plane. You act humbly, live under one roof for weeks. Döpfner’s central message: his group will be “the leading digital media company” that also earns good money online with journalism. That was when this journey began, in the truest sense of the word.

Highly profitable with lobby newsletters

Since then, the German media company has been busy shopping, especially in the USA. In 2015 Springer completely took over the “Business Insider” portal. It also has branches in other countries. Also in Germany. Now comes “Politico”. Springer had already started an offshoot in Brussels with the insider service, which turns over a lot of money not least with expensive newsletters to lobby organizations and politics. Springer has now also taken over the parent editorial team in Washington, with around 700 employees in North America.

In the corporate film, Axel Caesar Springer can’t even pay for the taxi: he has no idea what a smartphone is, let alone an app. He doesn’t even know the euro. He can walk through the Brandenburg Gate in long-unified Germany. And when he arrives at the headquarters, his “world” is astonishingly thin. “Image” is still there, but mostly digital. But there is also new business: advertising portals for real estate and digital journalism, for example. Portals like “Insider” and “Politico”. In addition, the US financial investor KKR has a lot to say at Springer, and not just the remaining Springer family.

Growing interest in the German media group

Because Springer is now increasingly penetrating the US media market, the group has to adapt to local customs. The affair surrounding “Bild” editor-in-chief Julian Reichelt can then be explained as follows: In the USA, people are now curious about who or what Axel Springer is. First the “Wall Street Journal” reported in detail, shortly before the final takeover of “Politico”, the “New York Times” – which competes with “Politico” for hot information from US politics, for example.

At the same time, the Springer Group, which has long been a classic German and therefore male-run publisher, meets the culture of the USA. There the “Metoo” affair took its course. There, romantic relationships in companies are often not tolerated. And there it can sometimes be expensive for corporations and their managers if they tolerate the abuse of power. The “New York Times” was therefore particularly interested in the culture of “Bild”.

Springer had allegations against the previous “Bild” editor-in-chief Julian Reichelt examined in the spring. A well-known law firm was commissioned – standard in international corporations. But Reichelt got a second chance. Springer promised new structures, and Reichelt that from now on he would separate personal and professional life cleanly.

New York Times Revelations

The corporate film also wants to set an example here. The visitors from beyond meet a “diversity officer”. She changed the way she spoke and explained that with a “pro-active approach to diversity” there would be a “diversity dividend”, that is, profit – whereupon the old Springer was also very enthusiastic.

“Nowadays,” says the manager of the mock now-time, “the how to work together, i.e. the corporate culture, is just as important for success as the requirements”. In a lecture, the two are given their earlier “patriarchal leadership style” of the 1980s. The message: that time is long gone.

The “New York Times” and then researchers from the investigative team of the German Ippen Group have now drawn a completely different picture of “Bild” and thus also of Axel Springer. Julian Reichelt, who was still protecting CEO Mathias Döpfner in the spring, is no longer an editor-in-chief. And the “New York Times” reports on its front page: “German editor-in-chief kicked out with sex investigation”. No less crucial is the subline: “Publisher acts during US growth”.

Group wants to grow

Springer has swallowed the US service “Politico”. Even before that, it was said: The group’s 2,400 journalistic posts should become more than 3,000 in the next five years, in addition to “Politico”. Springer wants to grow and needs the USA as a market for this. This forces the company to change its culture. It is questionable whether it is enough if Reichelt goes. In the media scene there have long been calls that it should also hit CEO Mathias Döpfner, who is also president of the BDZV publishers’ association.

Axel Caesar Springer does not notice any of this in the fiction of the corporate film. He is sitting in two beach chairs with his competitor and fellow sufferer Rudolf Augstein, on the roof of the real Springer new building in Berlin. Both rave about the new era when anyone can get news anywhere. This film deserves another chapter. And Axel Springer will certainly continue to be observed – also in the USA.