Bertelsmann created shockwaves this weekend with the announcement that its nigh-omnipotent chief executive Thomas Middelhoff has quit following a boardroom fracas over strategic direction of the globe’s fifth largest media group.
Among the assets owned by German-based Bertelsmann are the world’s biggest book publisher Random House, the BMG music group and pan-European broadcaster RTL.
According to battlefield witnesses, Middelhoff’s dethroning came during an eyeball-to-eyeball with the group’s supervisory board, reportedly over his plan to launch an IPO to raise new funding. Bertelsmann is controlled by a shadowy foundation holding 57.6% of its equity as well as the Mohn publishing family (17.3%) – both of which reportedly have serious concerns about the IPO and Middelhoff's strategy.
His departure consigns the plan to the back-boiler, possibly even interment. It has also set the rumour mill spinning at the speed of sound, the most-touted theory being that Middelhoff is set to take the helm at troubled Deutsche Telekom, following the ousting earlier this month of chief executive Ron Sommer.
The theory is further fuelled by the fact that German chancellor Gerhard Schröder, the eminence gris behind Sommer’s firing, is a bosom pal of Middelhoff – and the government is DT’s largest shareholder with a 43% stake. Although Middelhoff has no experience within the telecoms sector, his abrasive manner of management is said to be much to the taste of Schröder and other disgruntled DT shareholders.
Gunter Thielen, head of Bertelsmann's media services division, has been appointed as the group’s new chairman and chief executive, although insiders imply this is merely an interim appointment. Bertelsmann declined to comment other than to confirm the management changes.
Data sourced from: Financial Times; additional content by WARC staff