How transparent is the German media industry really?

For the Media Ownership Monitor (MOM), which is already published in more than 27 countries, Germany would have been an easy undertaking. After all, owners and managing directors are listed in the commercial register, which has been freely accessible for some time now. In addition, journalists have access to the transparency register. This not only lists the shareholders, but also the beneficial owners, i.e. the people who are actually behind the company. The mission of MOM is to present this transparently.

The database of the KEK, the Commission on Concentration in the Media, is particularly helpful for media companies. Here, too, the owners of media brands can be researched across several levels.

So why is the Media Ownership Monitor needed as well?

People behind the media

First and foremost, to ensure that the people actually behind the media brands are visibly presented. This is because they can often only be found in the commercial register or in the KEK database via several levels of holding companies.

On the other hand, because the transparency of German companies, especially media companies, is not that easy to come by – or because there is a different understanding of transparency.

One example is the two largest media groups in Germany. Axel Springer SE presents its beneficial owners in a diagram on its website. This diagram omits associated companies and shows the individuals behind the shares directly.

Bertelsmann also provides a similar diagram on its website. However, it is difficult to deduce who is in charge of the realm of RTL & Co. from the shareholder structure.

This is mainly due to the legal form of the SE & Co. KGaA, a partnership limited by shares with a European company as the personally liable partner, which is managed by an executive board. However, Bertelsmann Management SE is responsible for managing the group. And who manages the executive board? The Mohn family and the Bertelsmann Foundation? And what does 100% voting control by the Bertelsmann Management Company (BVG) mean?

A glance at the detailed MOM profiles shows that the Mohn family has the final say here, with matriarch Elisabeth ‘Liz’ Mohn at the helm. The graphic on the Bertelsmann page does not show this – quite the opposite.

Law and legal form

During our research for the Media Ownership Monitor, we also noticed that many media companies make use of unusual legal forms.

Often, hybrid forms are formed from partnerships such as limited partnerships (KG) and corporations (GmbH, AG, SE).

Why is that?

This structure enables limited liability, since the GmbH has unlimited liability as a general partner, while the limited partners are only liable up to the amount of their contribution. In terms of taxation, companies benefit from potential trade tax savings and the flexible taxation of profits at the shareholder level. In addition, this hybrid form offers flexibility in corporate governance, since the GmbH can take over the management, while family members, for example, can participate as limited partners without having any influence on day-to-day business. Profit distribution and taxation can also be better organised.

Purely capital-based companies are also subject to strict accounting requirements, which vary depending on the size of the company and require a detailed disclosure of the annual financial statements. For limited partnerships, only certain information, such as the limited partners' liability amount, must be entered in the commercial register. The exact amount of the contributions or the economic entitlement of the partners is not visible in the commercial register, as these details are regulated in the articles of association, which are not publicly accessible.

The choice of these hybrid legal forms is completely legal, but it makes it more difficult to research the ultimate owners of media companies.

At the beginning of the project, the MOM team asked all media companies to provide information on their voting shares in the group of shareholders, among other things.

One publisher replied:

‘I don't understand how you can be more transparent than with public documents.’

The letter was written by Jan Ippen, son of publisher Dirk Ippen. Ironically, the media companies in which the Ippen family has a stake are so complex that they are difficult to grasp even through ‘public records’.

For example, the family holds 80 per cent of Carl Hinnerwisch Verlag GmbH & Co. KG directly, but another 6.72 per cent indirectly through its indirect stake in F. Wolff & Sohn KG.

In addition, the father, son and nephew each have personal stakes in the network's publishing houses.

Media, power, matriarchs

While researching the actual people behind the media brands, the so-called beneficial owners or ultimate beneficial owners (UBO), we noticed something.

Behind most of the major German media groups is a woman.

Friede Springer owns 23.5 per cent of Axel Springer SE.
Liz Mohn is apparently in charge of the Mohn family, which owns 96.7 per cent of the Bertelsmann Group.
Elisabeth Burda-Furtwängler already owns 37.5 per cent of the shares in Hubert Burda Media. She will later inherit further shares from her father Hubert Burda.
Sylvia Madsack owns 19.9% of the Madsack Media Group.
Yvonne Bauer owns 85 per cent of the shares in Bauer Verlag.
Julia Becker is not only chairwoman of the supervisory board of Funke Mediengruppe, but also owns it together with her mother Petra Grotkamp and her siblings Nora Marx and Niklas Wilcke.

In all these cases, the shares in the media companies were inherited.

Interesting individual interests

In journalism, it is common practice to keep the editorial department separate from the company behind it. This means that the management and the owners do not interfere in the daily decisions of the editorial department. This ensures the independence of the medium from the interests of the publishing house, for example in the presentation of advertising customers. However, it also helps the management to appear more self-confident to advertising customers, because they can more easily reject their editorial wishes by referring to the requirement for separation.

Nevertheless, media are of course commercial enterprises and generally serve their owners. Publishers deal with their theoretical influence in different ways. Some specify editorial policies, others express wishes, but many simply stay out of it.

To assess possible conflicts of interest, it is not only important to know who owns the media, but also what interests could play a role here. These could be party and association memberships, other corporate holdings or even just simple personal acquaintanceships.

The MOM database shows that Sylvia Madsack owns hotels in the distribution area of a daily newspaper from the Madsack publishing house. Or that large parts of ProSieben belong to the Italian Berlusconi family, which used to be active in politics. It is also unusual that the SPD party holds various media interests, especially in the Madsack publishing house and, indirectly, in the radio station Antenne Bayern.

For various reasons, it is not so easy to find out the real people behind the media brands in Germany. Although the starting point is good compared to other countries, with free commercial registers and many disclosure requirements, there are still enough possibilities to obscure ownership or at least make it difficult to trace.

The MOM database is good for this. The actual people behind media brands do not, however, mean that they have unlimited influence over journalistic content. But knowing about it helps media consumers to be able to classify certain information.