Since taking the helm as co-managing director of Bavaria Film group in 2006, Matthias Esche has sought to usher in an era of transparency while also seeking to expand the production/distribution conglom’s vast operations.
For a company owned by four of Germany’s biggest pubcasters, that can be a challenging endeavor.
Esche took control of Bavaria in one of its darkest hours, replacing a popular predecessor who was forced out following a product-placement scandal in 2005.
Under former topper Thilo Kleine, Bavaria had engaged in the illicit practice for years on series produced for leading pubcaster ARD, including the daily soap “Marienhof.”
That same year, Bavaria was forced to sell its majority stake in the TV production company Odeon Film. A subsidiary of ARD by way of its affiliated shareholders, Bavaria had been under pressure to offload its stake after Odeon sought to launch its own commercial TV channel — a move that was quickly blocked by German media watchdogs who balked at the notion of ARD landing a foothold in the country’s commercial TV market.
At the time, ARD was also feeling the heat from an inquiry by the EU Commission into German pubcasters’ use of license-fee money to fund commercial operations.
“It was a difficult time, and Bavaria was hit quite hard,” Esche recalls. “It was almost a time of inquisition. But we have recovered and are now stronger for it. We now operate transparently, and as long as we remain transparent and encourage competition, we can grow and expand.”
Esche says the company is in talks with international partners that will likely result in greater feature-film production, long-term alliances and new opportunities in Eastern Europe.
Bavaria’s current foreign operations include production subsidiaries in Vienna and Rome. The group’s main business areas are in production, licensing, production services and home entertainment. For Esche, the keys to growth in all those areas are cooperation, strategic partnerships and, most important, remaining competitive.
Bavaria has been criticized in the past for its close relationship with ARD and its affiliates, accused of being part of a monopolistic conglomerate that is internally fed by its shareholders.
It’s an image Esche would like to shake. “The success that we achieve cannot be dependent on our shareholders. We have to be competitive not just for the sake of EU guidelines but also because it makes us a stronger company.”
In 2007, pubcaster ZDF took a 50% stake in Bavaria Fernsehproduktion, one of Bavaria’s main TV production divisions. The controversial move was met with criticism from the country’s independent producers, who expressed worry that Bavaria would gain an unfair advantage when it came to producing for the country’s two main pubcasters.
Esche, who oversees production and licensing at the group, says such worries are unfounded. “Ownership does not mean automatic production commissions.”
Bavaria’s co-managing director, Achim Rohnke, who watches over production services and home entertainment, is similarly eager to attract and partner on film projects from both German and international players, but he stresses that such enterprises have to make financial sense.
Bavaria acquires primarily German product and has worked on nearly all major German film productions in recent years through its production services division.
Pointing out that film financing has become increasingly difficult, Rohnke says Bavaria is open to international film productions, but only if certain conditions are met.
“International activities are interesting for us, but not at any price,” he adds. “Every project must make financial sense, and the risk must remain clear. At the moment, there are negotiations with a number of producers from various countries. What’s important for us is that we do not become dependent on this type of business, since it carries the most risk.”