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Axel Springer goes to America

MAtheas Dupfner A polarizing figure in Germany. Leftists hate him for leading Axel Springer, the publishing giant, for the aggressive rock bottom journalism of Build, the major tabloid newspaper that helps set the tone for political debate. Conservatives resent his provocative remarks. Jealous types of all stripes envy his transformation from music critic to media mogul, who in 2020 received 1 billion euros ($1.1 billion) worth of Springer shares from Friede Springer, the widow of the company’s eponymous founder, as a gift.

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Across the Atlantic, Dubfner doesn’t evoke similar sentiments. That’s about to change, as his ambition is to turn his company into the largest digital publisher in America, up from number four today. “America has become the main chamber of the heart and the engine of growth for our publishing business,” says Döpfner. Springer already owns it Politicoan American website for political news addicts, from the insideAnd another news site and morning drink, which provides business news. It’s all part of Mr. Döpfner’s plan to go back to Springer’s origins as a news publisher, except it’s mostly American, not German — and it’s all digital.

He can boldly consider expansion because Springer has had a good 2022. Sales of the group, which owns 150 media brands in more than 40 countries, increased 13% to 3.9 billion euros, the second consecutive year of double-digit growth. Operating profit rose to 750 million euros. Digital activities accounted for 85% of revenue and more than 95% of profits. While many American competitors were shedding staff, the group hired 400 journalists in America in 15 months to support its newsrooms.

Mr. Döpfner was one of the first people to turn to the Internet business. He sold some Springer print newspapers and magazines. Use the proceeds from digital acquisitions, such as StepStone, one of the most visited sites in Germany for job seekers; Idealo, a price comparison service; Awin, a marketing platform; Tel Aviv, real estate portal.

The next step is to take StepStone public, possibly this year, followed by Aviv, Idealo and Awin. The money from the sales can then be used to buy kkrthe US private equity giant that took Springer private in 2019 and became its largest shareholder, with a 35.6% stake. This would make Mr. Dubfner, who owns 21.9% and exercises voting rights in Mrs. Springer’s remaining 22.5% interest, the indisputable owner of the company. This, in turn, would give him free rein to realize his digital American dream.

“It’s a big bet,” says Douglas McCabe of Enders Analysis, a research firm. Digital news publishing is not yet a robust and sustainable business. Mr. Dubfner paid out more than $1 billion PoliticoSpringer’s largest acquisition ever, and the highest dollar of the INsider, also. Although both have been profitable in the past year, it may be a while before Springer sees a return on those investments.

As for partisan neutrality, Mr. Dopfner’s strategy is a response to the perception, shared by many readers, that American publishers have in recent years nailed their colors to the mast not only in their outlets’ opinion pages, which is nothing new, but in their reporting as well. There is certainly room in America for nonpartisan news. However, it is unclear if Dubfner can pull this off. His German journalists agree to abide by the five “fundamentals” of the Axel Springer Constitution, which include support for the transatlantic alliance and Israel’s right to exist. He is well known in Germany for his anti-waking, sometimes libertarian views, which in the eyes of Americans are associated with the Republican Party. Mr. Döpfner insists that he does not interfere with the editing process and encourages disagreement with his views. But his worldview prevails in both Build And Alertand the large cut.

Nor would Springer’s American opponents give up territory willingly. Their journalists are already making him feel unwelcome. After two months Politico acquisition The New York Times Published a story, “On Axel Springer, New Owner of Politico, Sex Allegations, Lies, and Secret Payments,” about trysts with the staff of Julian Richelt, Editor-in-Chief Build. Mr. Döpfner fired Mr. Reichelt the day after the story was published. But the saga hurt Mr. Dubfner more than previous controversies. In spite of the evidence of Mr. Reichelt’s misdeeds discovered by the compliance inquiry, he clung to the editor for months, defending him privately as a gallant journalist who had the courage to rebel against the wake.

After months of intense criticism over his handling of the issue, last November Mr. Dupfner resigned as president of the German Publishers Association. He attributed this to the need to focus his “contradictory bet” on non-partisan journalism in democracies around the world, primarily America, in a time of polarization and populism. Considering the size of the task he’s set himself, the media baron definitely needs all the time he can get.

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