In 2022, the group’s revenues rose to a record 7.2 billion euros, but more slowly than initially hoped.
(Photo: IMAGO/Jochen Tack)
Dusseldorf After the job cuts at the publishing house Gruner + Jahr (G+J), a drop in profits at the most important Bertelsmann subsidiary is causing concern. Before interest, taxes and amortization of intangible assets (Ebita), RTL Germany only achieved a surplus of 459 million euros – a decline of 15.2 percent. The former publishing business of G+J is accounted for at one million euros, as internal documents available to the Handelsblatt show.
At the beginning of February, the group announced that it would cut 700 of the 1,900 jobs at the traditional Hamburg publisher. 45 out of 58 brands and magazines are to be sold or discontinued. Only core brands such as “Stern”, “Geo” or “Capital” should remain.
After the merger, G+J has belonged to RTL Germany since the beginning of 2020, which is the most important revenue generator of the Luxembourg RTL Group with a good 38 percent. In turn, the media group Bertelsmann holds more than 75 percent of the shares in the group.
The RTL Group, which includes the French TV group M6 and RTL Nederland, also achieved a six percent lower profit of 1.08 billion euros. RTL boss Thomas Rabe had already warned in the summer that the surplus would be lower. “Sales reached 7.2 billion euros and thus the highest value in the history of the company,” said Rabe.
The private broadcasting group, which is listed in the MDax, is suffering in particular from weak advertising business. RTL generates a good 43 percent of its revenues from TV and radio advertising. However, in view of the uncertain and crisis-ridden situation, many companies often save on their advertising expenditure first.
Year of failed mergers
RTL looks back on a year with many failed merger projects. Rabe is pursuing the strategy of forming strong companies through cooperation and mergers in order to be able to counter streaming giants such as Netflix, Disney or Amazon locally.
But the plan to merge the Bertelsmann holding M6 with the TV broadcaster TF1 failed in September due to the competition authorities. The merged companies would have controlled more than 70 percent of advertising television. Plan B to sell the M6 elsewhere also didn’t work out.
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In the Netherlands, there was also a setback in the plan to merge RTL Nederland with the media company Talpa – here, too, the cartel watchdogs had expressed concerns. Rabe’s third plan, to create a strong media provider in Germany with the merger of RTL and G+J, was also not implemented as planned after the Hamburg publishing house was partially broken up.
Rabe struggles with the implementation of RTL + (formerly TV Now). Originally, the group wanted to create a super app in which films and series from RTL, audio books and music, but also articles from “Stern” or “Geo” could be read. The project appears to have failed.
Overall, RTL+ in Germany has seen significant user growth of 48.1 percent to over four million paying subscribers over the past twelve months. However, with a market share of around two percent, it is still a long way from competitors such as Netflix, which is estimated to have a share of around 30 percent.
RTL has not yet made any money with its streaming service, despite increasing sales. The service is not expected to be profitable until 2026. Last year, the start-up losses amounted to 233 million euros. With a 40 percent share, the RTL Group is Bertelsmann’s most important profit generator. The Gütersloh-based parent company will present its annual balance sheet in two weeks.
More: Breaking up of Gruner + Jahr: Why are there no profits of 134 million euros after just one year?