Chairman and joint CEO of international TV station CLT-Ufa
When Bertelsmann announced it was plucking Rolf Schmidt-Holtz from his
role as the chief executive of its broadcasting arm CLT-Ufa and
appointing him as the group’s first chief creative officer, there were
many in the industry who took a sharp intake of breath. ’I can only say,
Jesus, what a challenge,’ noted the head of one media independent who
assumed Schmidt-Holtz would be laying down creative strategies across
the Bertelsmann empire.
It was the scale of the task rather than Schmidt-Holtz’s talent that was
the issue. For, if anyone is up to the task, it is this outspoken former
editor who has risen through the ranks of the German media giant and
gained enormous respect in the process.
It is rare for a journalist to reach such heights in any media
However, Schmidt-Holtz’s networking ability, his motivational skills as
an admired former editor-in-chief of Gruner & Jahr’s Stern magazine and
his acknowledged editorial judgment will be key attributes in his new
Everything, of course, depends on the job description. Some press
reports suggested he would be primarily concerned with running the
group’s internet strategy. Schmidt-Holtz himself sees it differently.
’The internet is important, and a big part of the future, but it is only
one channel,’ he says. A key part of his remit, he argues, will be
building bridges between the disparate parts of the company.
’We have a decentralised, entrepreneurial structure at Bertelsmann,’ he
explains. ’On the one hand, that is excellent. It creates initiative and
independence. It is one secret of the group’s success. On the other
hand, it is a disadvantage because there is little synergy. The editors
in the publishing houses are not interested in co-operating with the
magazines or TV stations. No-one knows anyone. We have to bring people
Another side to the job, he says, will be to collect ideas from the
outside world. Big publishing houses are anonymous organisations, but he
will be the face of Bertelsmann, the point of contact. Already, he
claims, he has received more than 100 letters from people suggesting
Schmidt-Holtz’s career progress has largely been shaped by the media
revolution where two factors are paramount: the interdependence of the
various channels and the demand for content. Material developed for
books, magazines or newspapers can be adapted for the internet. Digital
technology and the emergence of interactive TV are both creating a huge
appetite for moving images and fresh opportunities for recycling. And
Bertelsmann, as a major international media player, is well placed to
exploit this market.
While at Stern, Schmidt-Holtz succeeded in halting an eroding
circulation and re-established the magazine’s reputation for
investigative journalism and setting the political agenda. After six
years, however, he resigned - allegedly over a disagreement about G&J’s
plans for a new magazine which he felt would damage Stern - and
relocated to Bertelsmann’s music group.
When Bertelsmann merged its TV subsidiary Ufa with the Luxembourg-based
CLT to form Europe’s biggest commercial broadcasting network,
Schmidt-Holtz became joint chief executive, responsible for content.
Under his guidance the company, now making record profits, produces 90
per cent of its own primetime programming.
Schmidt-Holtz’s keen editorial eye and belief in high standards should
stand him in good stead as Bertelsmann’s creative supremo. ’Quality is
key,’ he says. ’But that doesn’t mean an intellectual, elite thing, it
means appropriate quality for your readers and viewers. The simple
philosophy is that you have to love working for people and you have to
love your target groups. Only if you internalise these beliefs will you
fulfil this target of quality.’
Schmidt-Holtz remains very much his own man, one who has had his rows
with the Bertelsmann group in the past and may well do so again in the
future. ’Maybe my reputation for being outspoken is right, and maybe the
reason is that I do not fear the consequences,’ he says. ’As a
journalist I had to decide very difficult, even dangerous issues and I
concluded that the only thing to do was to take the best decision you
could at the time and stick with it.’
THE SCHMIDT-HOLTZ FILE
1997-date Chairman and joint CEO of international broadcaster CLT-Ufa,
responsible for the German speaking regions and the station’s
New appointment: First chief creative officer, Bertelsmann group
1994-1997 President of the executive board of Bertelsmann’s
1988-1994 Appointed to board of Gruner & Jahr, initially as publisher,
then editor-in-chief, Stern
1986-1988 Editor-in-chief for TV, WDR
1985-1986 Head of executive office of information and journalism,
1980-1985 Journalist with public broadcasting corporation WDR
1977-1980 Federal press office
Chairman Designate, Gruner & Jahr
In October, Bernd Kundrun will succeed the legendary Gerd Schulte-Hillen
as chairman of the pounds 1.7 billion publishing house Gruner & Jahr.
For now, though, he has his mind on other things. February saw the
launch of FT Deutschland, a joint venture between Pearson and G&J, and
he’s in charge.
This is a major challenge. It’s the first national daily newspaper to be
launched in Germany for decades. On the positive side, the timing could
hardly be better. There has been a huge, if belated, rise in interest in
everything to do with the stock market in Germany. Needless to say,
however, others have also seen the opportunity. Business coverage is
increasing in all media and there have been a number of magazine
launches, headed by the successful Borse Online from G&J itself, which
already has a paid circulation of more than 216,000.
’This is a very, very tough project,’ a well-placed observer notes. ’One
thing is clear. If Kundrun fails, it will not be favourable for his
career at G&J because to lose will be expensive.’
The engine that provided the resources to enable G&J’s parent,
Bertelsmann, to expand in the post-war years was its book club division,
which is where Kundrun first made his mark in the 80s, rising from
management assistant to marketing director and, finally, chairman.
Kundrun was instrumental in driving the adoption of direct marketing
techniques to replace door-to-door representatives just before the
Berlin Wall came down. The result was a surge in subscribers which
rejuvenated an ailing and traditional business. His reward was the
tricky job of chief executive of the Hamburg-based pay-TV company
Premiere. There he successfully doubled the subscription base to 1.5
million by focusing on new films and top sporting events.
What was tough about the assignment was the ownership of the
Under recently abolished rules, individuals could not own the majority
of shares in more than one TV station, a situation that led to
competitors taking minority stakes in the same operation. In Premiere’s
case, ownership was split between the Kirch Group (approximately 25 per
cent), Bertelsmann and Canal Plus.
With 30 free channels available in Germany, Kundrun believed that one
pay-TV channel from Premiere was enough and that it had to concentrate
on programmes consumers would be happy to pay for. The Kirch Group
disagreed, arguing for a package of channels in the style of BSkyB. ’I
said, ’where is the pay value if we offer viewers another 30
channels?’,’ he now recalls. ’But I understood the Kirch logic because
it has a lot of film rights and distribution contracts and it wanted
broader distribution for them. A clash was inevitable.’
And so it proved. In the end, the Kirch Group increased its stake in
Premiere while Bertelsmann reduced its holding to just 5 per cent. For
Kundrun, the outcome was a move, in August 1997, to G&J as head of the
newspaper division where fresh challenges awaited - including the launch
of the German-language Financial Times.
Kundrun says critics put all kinds of hurdles in his path to the launch
of the business daily. He, however, in typical style has brushed
doubters aside. People claimed the target publication date - first
quarter of 2000 - could not be met. They doubted it would be possible to
recruit 100 journalists, weld them into a team and persuade them to
agree to write for both the printed paper and the online version. Nor
would it be possible to find enough printing sites or achieve national
distribution when going to press as late as 10.30pm.
’One of our main competitors went so far as to say that if we succeeded
in closing so late while still reaching all our sales points, the
distribution managers of all the big newspapers should resign,’ Kundrun
says. ’I am still waiting for that to happen.’
Kundrun won’t spend too much time waiting as he has bigger fish to
Within the next six months the company’s chairmanship will be his and he
can look forward to another set of challenges to tackle and - no doubt -
critics to silence.
THE KUNDRUN FILE
1997-date Head of G&J’s newspaper division
New appointment: Chairman designate, G&J
1994-1997 Chief executive, Premiere TV
1993 Chairman, Bertelsmann Club
1989-1993 Marketing manager, Bertelsmann Club, responsible for
recruitment, direct marketing and the catalogue division
1987-1989 Sales director, Bertelsmann Club retail chain
1984-1987 Executive assistant, Bertelsmann Club, the book club division
Member of KirchMedia GmbH
The legendary Kirch Group founder Leo Kirch is now in his 70s and
nearing the end of his career. His son, and assumed heir, Thomas has
made his own fortune in the media world and is now starting to emerge
from his father’s shadow.
But one could be talking about two black cats on a moonless night. The
most-quoted fact about Leo Kirch is that he shuns publicity, a trait
that appears to be in the genes.
Of the three rising stars profiled for this article, only Thomas Kirch
declined to be interviewed. Neither the Kirch Group head office nor the
TV station Pro Sieben, with which he is closely associated, could
provide a current photograph of him. And a request for an official
biography was met with a curt 40-word statement, revealing that he is a
member of the supervisory board of KirchMedia GmbH and holds 7.31 per
cent of the shares.
He also holds 33 per cent of the shopping channel HOT, 40 per cent of TV
Munchen and 100 per cent of Radio Hundert.6 in Berlin.
All of which would sound very entrepreneurial if Thomas Kirch’s media
shareholdings had not already been a matter for controversy in Germany.
As the head of one media independent puts it, the law that prevented
companies or individuals from owning the majority of shares in more than
one broadcasting station ’led to some amusing alliances between bitter
rivals’. ’It was quite ridiculous,’ he says. ’You can’t keep the media
tycoons from the TV table like that. They will always find a way.’
It was against this background that Thomas Kirch, then aged 37, set up
his own media company in 1995. Initially its holdings included a near-50
per cent stake in the Pro-Sieben TV station but within months this was
reduced to less than a quarter in the face of what the Wall Street
Journal termed ’German media officials’ anti-trust suspicions’.
The Kirch family maintained that the business interests of father and
son were quite separate. Since then, the law regarding shareholdings has
been relaxed. ’Surprise. The shares have now been sold to the Kirch
Group. And what is the son doing now? I have no idea,’ a media agency
The same restrictions on shareholding resulted in the situation at the
pay-TV station Premiere where the interests of the Kirch Group
conflicted with those of the other shareholders, Bertelsmann and Canal
Plus. Kirch wanted Premiere to launch more channels, thus providing
outlets for films and programmes for which it had distribution rights.
The other two companies backed the station chief Bernd Kundrun (see
separate profile) who believed that, in a country with a multitude of
free stations, it was better to concentrate on a tightly defined
offering that people would be prepared to pay for.
Despite spending time in negotiations with Kirch junior, even Kundrun
cannot shed much light on the make-up of the man. ’I saw Thomas Kirch at
some of the meetings I had with Leo Kirch, but he was very quiet in his
father’s presence,’ Kundrun says. ’The management around Kirch were
fairly aggressive people and very professional. I understood their
strategy and why they held a completely different view to mine and that
of the other shareholding companies. At the end, I believe both sides
had a high respect for each other.’
The secrecy surrounding Leo and Thomas Kirch appears both old-fashioned
and eccentric in an industry such as media, devoted as it is to the
distribution of information and the maintenance of press freedom. They
are not unique, however - the UK’s Barclay brothers take a similar
The first sign of a softening in the group’s attitude came three years
ago when, for the first time, the managing directors of the Kirch
Group’s seven divisions held two press evenings that ran on long into
This development was so unexpected that it made headlines at the time
and hinted at a more open approach when chairman Leo finally stands
down. Pointedly, however, father and son did not attend.
THE KIRCH FILE
Member of the supervisory board of KirchMedia GmbH, and a minority
shareholder (7.31 per cent)
1995 Established holding company Thomas Kirch Communication for his
media interests, of which the most controversial was a 47.5 per cent
stake in Pro Sieben TV. He subsequently reduced this stake, and then
sold the remaining shares to Kirch Group.
Retains holdings in shopping channel HOT, TV Munchen and Radio