Revenue: $17.83 billion
Profits: $2.8 billion
Once seen as Germany’s unsinkable cruiser, Bertelsmann appears to have been rattled by the turbulent waters that capsized many of Germany’s leading media companies.
The group shocked the media sector when it tossed former CEO Thomas Middelhoff overboard July 29.
While Middelhoff promised a revolution when he took the reins of the former hymn-book publisher in 1998, the high-flying media chief apparently proved too adventurous for the German giant’s conservative old guard.
Bertelsmann said Middelhoff left due to differences with the powerful supervisory board over the strategic direction of the privately held company. Indeed, the group’s supervisory board chief, Gerd Schulte-Hillen, was instrumental in Middelhoff’s exit; Middelhoff’s plans to globalize the company increasingly clashed with Schulte-Hillen’s as well as longtime shareholders the Mohn family. A power struggle triggered by Middelhoff’s plans to float part of the Mohns’ 75% stake proved too much for the owners.
Gunter Thielen, fellow exec board member and head of Bertelsmann’s media services division, Arvato is new topper.
Although the Mohns originally encouraged Middelhoff’s entrepreneurial spirit, Bertelsmann’s profits have tumbled in the increasingly tumultuous climate, and some of the former CEO’s pet projects rankled many of the old-timers, namely his deal to fund online song-swap company Napster at a time when the music industry was suing the renegade site.
Bertelsmann is expected to strengthen its focus on its core print business. Christoph Mohn, son of family patriarch Reinhard Mohn and member of the Bertelsmann Verwaltungsgesellschaft, which controls the Mohns’ 75% stake, says he does not expect its electronic media assets to suffer as a result of those changes.