Thomas Middelhoff, chief of German publishing giant Bertelsmann was the right man for the booming media market of the late 1990s. But those times are gone - and now Middelhoff is as well.
A bit too quick for the Board of Directors
The shocking ouster of Bertelsmann's chairman Thomas Middelhoff over the weekend was a ploy for calm in an otherwise turbulent media market, according to one expert.
The 49-year-old Middelhoff brought an innovative, aggressive Western-style of management to a tradition-rich German publishing house in which a foundation is the majority stake older and chief beneficiery of the group’s profits.
The two did not mix, apparently, and Bertelsmann decided to part ways because of “differences of opinion between the Chief Executive Officer and the Supervisory Board about the future strategy of Bertelsmann AG,” according to a statement released Sunday.
The company announced Gunter Thielen, who has until now headed the majority share-holding Bertelsmann Foundation, will take over.
“Continuity means a lot nowadays, and the foundation stands for continuity,” Helmut Thoma, media expert and former chair of broadcaster RTL, told DW-WORLD. “Two years ago, everything was different. Everyone wanted to modernize and grow.”
The right man for the time
Middelhoff appeared to be the right man for the job.
On the company’s the web site, his biography carries the headline “Man for the future.” That was what Bertelsmann had in mind when it moved him from the board of directors to the executive suite in 1998.
The Düsseldorf-native introduced a re-structuring plan in 2000 that divided the sprawling company into three divisions: content, media services and Direct-to-Customer Business. He sold off shares in money-losing German Pay TV Premier and AOL Europe, giving his company the financial cushion it would need for his vision.
He went on an acquisition jaunt highlighted by his successful attempt to secure a controlling interest in RTL in February 2001.
Europe’s largest broadcasting company, combined with Bertelsmann’s ownership of US publishing giant Random House, the record label BMG and German publisher Gruner + Jahr makes it the world’s fifth-largest media company.
”We are changing the organization. We are changing the corporate governance. We are changing the culture,” he once told the Financial Times.
Undated handout picture of the Bertelsmann headquarters in Guetersloh, Germany. Europe's biggest broadcaster, Bertelsmann AG, said Monday Feb. 5, 2001 it has taken a controlling stake in RTL Group Plc, a Luxembourg-based media company known for its racy programming, as a step toward eventually listing itself as a publicly traded firm. Bertelsmann increased its 37 percent stake in RTL group to 67 percent by buying a stake previously owned by Groupe Bruxelles Lambert S.A.
He worked tirelessly towards that goal, splitting his workweek between the US and Gütersloh, the tiny German town where Bertelsmann first began printing religious and theological books in 1835. In 2001, the company broke all previous profit records with 4.16 billion euro. In April, Middelhoff announced this year’s profits would most likely break that mark.
But no more a “man for the future”
The end goal was to be Middelhoff’s greatest achievement: Bertelsmann’s initial public offering slated, unofficially, for 2005. But his moves were a little too rapid for conservative members of the board, including the 17.3 percent stake-holding Mohn family insiders have told European papers.
Now, Middelhoff joins recently-ousted Vivendi chief Jean-Marie Massier and AOL Time Warner’s Bob Pittman in the line of unemployed CEOs of media companies.
Rumors that Middelhoff would take over the executive suite at Deutsche Telekom have been denied on all sides. The German telecommunications company is currently looking for a long-term leader following Ron Sommer’s ouster two weeks ago.
The speculation has already provided a little boost in Telekom stock in early trading on the Frankfurt Stock Exchange. Shares rose 4 percent to 12.42 euro.