REPORT ON GERMANY: Times for change - The FT’s new venture will shake up the staid German newspaper market, Richard Cook writes

The Financial Times became the first European paper to publish from outside its national boundaries when it set up a printing press in Frankfurt in 1979.

The Financial Times became the first European paper to publish from

outside its national boundaries when it set up a printing press in

Frankfurt in 1979.

At the time, it seemed like the first bold step in a mission to

transform a sometimes stuffy and parochial City bible into the sort of

racy cosmopolitan read that a global business community, weaned on a

then fashionable monetarism, was starting to demand. Twenty years later,

the title has made considerable progress along this path to

globalisation, establishing a US edition and prospering in most of the

world’s most important business markets. Progress has - almost

everywhere - been as swift as could have been hoped. Except, that is, in


The fact is that the FT still manages to sell just 22,000 copies within

the entire 100-million-strong German-speaking market. But it’s not alone

in this plight. None of the other English-language business titles have

fared any better. Taken together, the FT, Wall Street Journal Europe and

the International Herald Tribune sell only 50,000 copies in Germany.

The country’s leading German-language business daily, Handelsblatt, on

the other hand, sells more than 160,000 while the business-oriented

pages of the Frankfurter Allgemeine Zeitung are devoured by more than

400,000 purchasers each day, with the Frankfurt-based daily closing in

on a readership approaching the one million mark.

Something, it seems, needs to be done if the FT is ever to be taken as

seriously as it wishes as a global provider of business information.

That something is a new DM170 million (pounds 59 million) joint venture

investment with Gruner + Jahr, the publishing arm of the Bertelsmann

media behemoth, in a separate German-language business daily, printed on

the FT’s familiar salmon-pink paper.

The new title - based in Hamburg but with offices in Frankfurt and

Berlin - will have a staff of more than a hundred and a sales target of

a hefty 150,000. The paper will be edited by a 41-year-old

German-speaking Londoner, Andrew Gowers. Gowers is more than a merely

experienced German hand, though - he took charge of the FT in London

while its editor, Richard Lambert, spent a year working on the US title.

And he isn’t wasting any time on this new project. Almost his first

action has been to retain the headhunters, Russell Reynolds, to assemble

a team able to get the new paper - the first new daily newspaper to

enter the German marketplace in 20 years - up and running as quickly as


The ’German FT’ is supposed to be on managers’ desks early in 2000.

Certainly, Russell Reynolds has not so far been backward about the

recruiting process, offering salary hikes of around 50 per cent to the

cream of Germany’s business journalists in an effort to lure them to the

new paper. Gowers, unsurprisingly, is keen to play down stories of

poaching or indeed of all-out war with Handelsblatt. He says the new

title will slip painlessly alongside the existing rivals because ’the

business market is growing faster than the newspaper circulations’.

His rivals are not so sure. For Gunther Nonnenmacher, co-publisher of

FAZ, it is simply a mystery how the German FT is going to reach its

planned paid-for circulation of 150,000. ’The decision-maker elite

already reads the English original and the Wall Street Journal Europe,’

he points out.

’Why would they need to read this?’

Dr Heinz-Werner Nienstedt, managing director of Handelsblatt, goes even

further. He believes the FT has erred by allying itself with G+J, a

massively successful magazine publisher that has not fared nearly so

well in Germany’s regionally diverse, extremely conservative, newspaper


He points out that the G+J board member for newspapers, Bernd Kundrun,

now also responsible for the German FT, has a patchy newspaper track


’The Hamburger Morgenpost is constantly fighting for survival and his

relaunch of the Berliner Zeitung has gone up in smoke,’ he says. ’Each

partner in this deal is relying on the respective qualifications of the

other - qualifications that are either non-existent or insufficient. The

FT has little idea about Germany and is to create the editorial product;

G+J has little experience of newspapers, and what experience it has is


Perhaps less predictable is the robust nature of the responses the

competition has already embarked on to head off the newcomer.

FAZ launched an extra finance section in January that includes a comment

and analysis column - not traditionally a part of German newspaper life

but something which co-incidentally constitutes the FT’s chief point of

difference. Its business and finance sections have also been bolstered

with the absorption of the staff and resources of its now-defunct sister

title, Blick Durch die Wirtschaft. Other serious general newspapers have

followed FAZ’s lead. Both Die Welt, which is preparing a major relaunch

of the entire paper later this year, and Suddeutsche Zeitung have

already increased business pagination.

The intentions of Handelsblatt are, as might be expected, even more


’We will increase our marketing expenditure drastically - initially by

30 per cent, but depending on competition, there’s no upper limit,’

Nienstedt says. ’Then we will strengthen our editorial staff and insert

an extra 12-page section in the Friday edition which will concentrate on

the needs of the private investor.’

But if that all sounds ominous for the new title, there is far better

news from the advertising world. While, according to Zenith Media, the

circulation of German dailies has fallen by more than 3 per cent over

the past five years, ad revenues continue to rise. In 1998 national

dailies’ ad revenues increased by 11.8 per cent, and Zenith is erring on

the side of caution with projections of a 3.8 per cent improvement for


Nienstedt remains to be convinced. ’The FT is a great business newspaper

for which we have a lot of respect,’ he admits, ’but the Anglo-Saxon

tradition of journalism - mixing news and opinion - is not popular with

German newspaper readers. The FT thrives in Germany on the aura of what

doesn’t get read - and that is precisely what will be exposed if this

project ever does get off the ground.’


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