Our take...
Springer's involvement with ProSiebenSat.1 has been an all-or-nothing affair. Springer's investment in ProSiebenSat.1 was aimed at opening a new revenue stream at a time when the print sector faces declining advertising revenues. The acquisition of ProSiebenSat.1 would have been a major step in transforming a 21st century publishing company into a (multi)media group able to compensate market fluctuations through diversified revenue streams. However, a 12 per cent stake would not have allowed Springer to harmonise strategies between its TV and its core business and to establish one integrated cross-media platform. Thus, the media watchdog's veto urged Springer to embark on a different strategy.
Apart from internationalising their print business through major acquisitions in the European print market, Springer bought the postal service company PIN. However, due to the introduction of a fixed minimum wage in Germany's postal sector, Springer threatened to declare PIN's insolvency. This would cost Springer about 600€m, the same sum as their income through the ProSiebenSat.1 deal. While Springer denies a connection, this would explain the sudden move to sell its share in ProSiebenSat.1 far below the January offer.
Online seems to be Springer's new TV: The retreat from ProSiebenSat.1 comes only six days after Springer bought back bild.de, the online portal belonging to its trademark newspaper which it operated as a joint-venture with Deutsche Telekom. With 558 million page impressions per month and more than 10 clicks per visit, bild.de is the most successful editorial online portal in Germany in terms of revenue generated – but so far it makes only a small profit. Springer plans a major relaunch in mid-December. As companies' investments in advertising migrate not only from print to TV but increasingly to online, the relaunch can be regarded as an alternative diversification strategy.
It seems, however, that Springer does not want to fully abandon TV: The publisher claims the new bild.de will put an increasing emphasis on video content and web TV. However, while Springer told Screen Digest that its video strategy would not demand an investment in traditional TV, the company admitted that its current efforts could not compete with a broadcast TV strategy yet. In this vein, Springer's efforts rather seem to be a testing ground for new revenue streams than a sound alternative to their ProSiebenSat.1 ambitions. While Springer denied rumours about a content cooperation with news channel N24 and getting involved with pay-TV provider Premiere, it therefore seems likely that Springer's retreat from TV is not permanent.
On the other hand, for ProSiebenSat.1, the departure of Springer as a stakeholder might further strengthen the group. KKR and Permira specialise in the takeover, reselling and restructuring of companies. By acquiring the Springer shares, they further extended their influence and flexibility to shape the ProSiebenSat1 business. This is a major bonus in the plan of setting up a European broadcast group capable of competing with RTL Group.