BaZ steps on PubliGroupe's toes
Press Relations with BaZ tenant Publicitas are clouded on many fronts: Basler Zeitung Medien's annual report is a source of controversy.
The Basler Zeitung Medien (BZM) group of companies, which closes its financial year at the end of June, reported a net profit of CHF 4.3 million for 2005/2006 (plus CHF 62.9%). At the same time, however, Group turnover fell from CHF 276.2 million to CHF 272.0 million. The increase in earnings was primarily due to savings of CHF 12.7 million and the sale of unprofitable areas. For example, BZM disposed of the TV production company Allcomm in the 2005/2006 financial year, while sales also fell in most of the eight traditional divisions. "Mainly due to the decline in advertising and the unfavorable margin development in the printing sector," explains publisher Matthias Hagemann. The parent company Basler Zeitung (BaZ) generated two million francs less than in the previous year, the Baslerstab's turnover fell from 27.7 to 25.7 million francs and at Birkhäuser + GBC (commercial printing), revenue even fell by 6.7 million to 68.6 million francs.
The Prepress division, local newspapers and the distribution company Prevag suffered only slight losses. In contrast, the company Birkhäuser + GBC Spezialprodukte (+ 1.3 million francs) and Radio Basel 1 (+ 10 percent) generated higher sales.
The profits that the Group has reported since the turnaround three years ago are primarily based on savings. Publisher Hagemann also knows that this is not sustainable. "The savings are sustainable in themselves; we have aligned our structures to the current level of income. But of course we are aiming for sales growth. That's why we've done a lot to generate profitable additional revenue," he says. Radio Basel 1 has already achieved this. The station has been in the black since the beginning of the current financial year, says Hagemann.
BZM has also initiated sales-boosting measures at BaZ: a large print run for the Basel region has recently been published and the editorial team has been significantly expanded. According to Hagemann, BZM is investing a single-digit million amount for both. These measures are apparently beginning to bear fruit: advertising revenues are already above budget. If the economy continues, the investments may be covered in the first year, says the BaZ publisher.
Key Media forges aheadThe BZM subsidiary Key Media, which is only one and a half years old, is also boosting revenue: In its first full financial year, it already contributed 13.5 million and even generated a profit of an undisclosed amount.
Key Media is an interesting entity. According to the official BZM version, it is primarily intended to boost the cross-media business among the BZM media. In reality, however, it also brokers BaZ on its own, i.e. in competition with its tenant Publicitas. It also brokers other domestic and foreign titles. Above all, however, it has a number of exclusive clients.
BZM founded Key Media because of the customer base of the current BaZ publishing director Roland Steffen: He came from the Publicitas branch in Aarau and brought several major clients with him. This is probably a thorn in the side of BaZ tenant PubliGroupe, which holds a 37 percent stake in BZM. "With Key Media, we have created a legal vehicle for Mr. Steffen's clientele, which came in handy in that we can use it to motivate Publicitas Basel to provide greater services," admits Matthias Hagemann.
The publisher cannot say how much turnover Key Media generated for BaZ. But one thing is certain: The turnover of 134.1 million francs reported by the BaZ parent company only includes the lower P turnover and the likewise declining turnover from newspaper printing, but not the share from the Key Media acquisitions. It is therefore possible that BaZ advertising revenue has not suffered as much as it appears at first glance. Hagemann confirms: "Thanks to the efforts of Key Media for BaZ, we have managed to offset part of the decline in advertising sales at the parent company."
P on many frontsBZM is also at loggerheads with P over the Mittelland Zeitung, which has gained a foothold in the Basel region thanks to its cooperation with the Basellandschaftliche Zeitung (bz). After all, P has a stake in two of the five MZ publishers and is also a tenant of the association. It is also the director of the bz. "This put the P in a conflict of interest: how should it manage the MZ, the bz and our large circulation in Liestal at the same time?" asks Hagemann.
In addition, the Basel, Aarau, Olten and Solothurn branches are all managed internally at P by Moreno Cavaliere, the director of P Basel. "We are in constructive talks with P to find a solution to this problem," says Hagemann. He does not want to say what the solution should look like.
Essentially, two approaches are conceivable: Either P changes its structures in the Northwestern Switzerland-Mittelland region or BaZ withdraws from the lease. Or both. Publisher Hagemann refrains from commenting on this. But Werbewoche knows from an internal source at P: changes to the structures have been initiated. These are to be communicated soon. However, BZM did not want to wait that long in view of the new situation in Liestal. "We market our large circulation in Liestal ourselves," says Hagemann.
In fact, BZM has opened an office there - interestingly, not a branch of Key Media, but of BaZ-Verlag. This means that BaZ is marketed by three players at once.
TelevisionAs soon as the BZM
sold the TV production company Allcomm, she was already flirting with the now defunct Basel TV station NW1. How does this fit together? Allcomm was not part of BZM's defined core business and was also not profitable, which is why it was sold, says Matthias Hagemann. A local TV station, on the other hand, would definitely be part of the core business. If BZM had been able to retain the previous concession for NW1, which provided for a program that was renewed every week, the Group would have been able to operate the station. "We would have simply based our program expansion on revenue," says Hagemann. However, the impression was gained that Bakom expected a major publisher to broadcast daily news programs - which is why BZM ultimately decided against it.
Sunday editionThe Mittelland Zeitung
is known to be considering a Sunday edition along the lines of Südostschweiz. This would also have consequences for BaZ, as this edition would hardly leave the Basel region and Basel in particular behind. "If MZ actually launches a seventh edition, BZM will react appropriately," says Matthias Hagemann. He does not believe in launching his own paid Sunday edition - at least not on his own. However, he does not see any potential partners, "since we are in direct competition with MZ". However, he is thinking aloud about launching a free Sunday newspaper, as the Badische Zeitung has been doing for some time. "If you want to hurt someone brutally on Sunday, then it's a free newspaper," says the publisher.
Markus Knöpfli
