Quo vadis, Urs Rohner?

Since Heinrich Bauer's arrival, the ProSiebenSat 1 CEO's chair has been shaking even more threateninglyBy Peter Ehm Urs Rohner's aura of a private TV sunshine boy has visibly lost its radiance since it became clear that the Hamburg-based Bauer Verlag will take over the ProSiebenSat 1 Media family of stations. Although the Swiss lawyer has achieved a lot, he has also torn a few holes in the war chest.
Urs Rohner and Günter Netzer - two ex-athletes, one chance: the lure of the top rung of the TV world, the control and mastery of images and rights. And the chance of big money. For Günter Netzer, ex-football star, the dream came true; with the help of a consortium, he took over KirchSport AG from the empire of the insolvent Leo Kirch.
For Urs Rohner, the former Swiss 110-metre hurdles champion, this vision did not come true: the takeover of ProSiebenSat 1 Media AG via a management buyout under his leadership failed. The acting CEO of Kirch's broadcasting family allegedly already had a strong consortium behind him: the US investor Kohlberg Kravis Roberts (KKR), Citibank and the US investment bank Hicks Muse Tate & First, which specializes in media.
A "clash of cultures" seems pre-programmed
Someone else has won the race to take over the insolvent KirchMedia. The German publishing group Bauer, together with Hypo-Vereinsbank, will take over ProSieben Sat 1 Media AG. With a price tag of around two billion euros, the biggest deal in German television history will be completed by mid-December. Two corporate cultures will collide in a way that could hardly be more different.
On the one hand, there is the Hamburg publishing house. It is managed according to strict guidelines by publisher Heinz Bauer. Bauer is regarded as a frugal, publicity-shy family group. The company produces 116 magazines in twelve countries. In Germany, Bauer is the market leader in the TV program guide (TV Movie, TV 14), youth press (Bravo) and entertaining women's magazines (Tina, Bella) segments. The boss prefers to keep concrete figures within the internal management circle. Nevertheless, it was leaked that turnover in 2001 amounted to 1.7 billion euros and "will continue to rise in 2002". A company spokesperson confirmed that the return on investment remained stable in the double-digit range in the crisis year 2002. And that's the end of the announcement.
ProSiebenSat 1 Media AG, on the other hand. It provides detailed information about its business quarter by quarter. It explains, it justifies, it gives shareholders hope. After all, the crisis in the advertising market is affecting Germany's largest TV group. And its CEO Urs Rohner is increasingly becoming a perpetual crier when it comes to recognizing "light at the end of the tunnel".
When presenting the half-year figures for 2002, the trained lawyer had to revise the profit forecast from 200 to "140 to 160 million euros". One quarter later, Rohner is now only talking about profits in the double-digit million range. Specifically, his family of channels reported a pre-tax loss of 53.6 million euros in the third quarter. The flagship Pro Sieben is still doing well and achieved "a slight plus". Sat 1, on the other hand, is becoming more and more difficult. From the beginning of the year to September, the pre-tax loss grew from EUR 48 million to over EUR 115 million.
However, the merger and acquisition specialist from Zurich already faced a mountain of tasks as high as the Matterhorn when he was appointed to merge Sat 1 and the ProSieben Group in October 2000. The once competing marketers Media 1 (Sat 1) and Media-Gruppe München (ProSieben Group) had to be merged to form Seven One Media. The news channel N24 had to be positioned and brought into the profit zone. Sat 1 was to achieve more image and sales with sensational in-house productions. And the wickedly expensive Bundesliga football was no longer to be in the red.
Urs Rohner went about his work undaunted. But the "wedding of the TV marketers" brought more lamentation than jubilation. The German agency scene criticized an internal overvaluation of the feature film channel ProSieben and a "downgrading" at Sat 1. "The channel is simply no longer being pushed in the same way," Wolfgang Schuldlos, Managing Director of More-Media, said last year. One thing is certain: Seven months after the merger, Sat 1 was broadcasting thirteen percent less advertising. According to an estimate by MindShare, Frankfurt, the utilization rate was 84 to 90 percent.

Then the "football scandal" broke, exclusively on Sat 1. Rohner had decided to move the Bundesliga show "ran" from the evening before to 8.15 pm. This should bring Sat 1 more advertising revenue - and new subscribers to the pay-TV channel Premiere. "I don't believe that the downfall of the West is imminent just because the football reports don't start until after eight," joked the CEO in July 2001. But the man from Munich had underestimated the importance of the "sacred German family Saturday evening". Advertisers waved goodbye, the people went on the barricades, and football rolled back into the early evening program.
But of course there were also successes. "Kommissar Rex" and "Schwester Stefanie" became long sellers. And with "Richterin Barbara Salesch", Sat 1 has permanently established a successful format. Breakfast television also works well, and Harald Schmidt continues to provide an ideal environment for upscale, young target groups. However, the major in-house productions for the evening program were disappointing: "Wambo", "Vera Brühne" & Co. tore huge holes in the station's budget last year.
For 2002, Rohner therefore had to cut back considerably. All too often, the Sat-1 evening program featured the tried and tested - endless reruns. That also came at a cost. Market shares, image and sales fell. "Things have gone badly for us this year," conceded Rohner at the Munich Media Days in October. The reality is worse: From January to September, Sat 1 lost six percent in advertising sales.
Now Ludwig Bauer, Rohner's first officer, is to personally initiate the turnaround at Sat 1 in Berlin. Productions, formats, personnel - everything is being put to the test. Reorganize, hire or let go is the motto. Insiders suspect that Rohner has sent the clean-up man from the Management Board, who is not from the new owner family, to the German capital in anticipatory obedience. As the new majority owner, Bauer-Verlag is to take over a tidy company.
Experts doubt that this lightning action will provide the decisive boost. Therefore: three years before the end of his 5-year contract, Rohner's chair is shaking badly. The first candidates for his successor are already in the picture. RTL editor-in-chief Hans Mahr and Marc Conrad, former program director of RTL and managing director of the production company Typhoon Networks, are being discussed. Also present: Josef Andorfer, RTL-2 managing director and therefore well known to the Bauer publishing group (the publishing group owns 31.5 percent of the channel). In addition, Rohner's fellow board member Fred Kogel is rumored to have ambitions. "All speculation", the company spokesperson hastily denies. And those involved (still) refuse to comment.
What does the future hold for Rohner AG? Following the entry of Bauer Verlag, the German anti-trust watchdogs are likely to become active. The Commission for the Determination of Concentration in the Media Sector will examine whether the new owners achieve an annual average audience share of more than 30 percent. This will not happen, the Hamburg publishing house is already waving this off. At best, it would be just under 25 percent.
It is already clear that the crisis in the German advertising market will continue over the next six months. Accordingly, the German agency scene is cautious about the future of ProSiebenSat 1 AG under the new majority shareholder. They will wait and see. After a consolidation phase, things could certainly get exciting, says Klaus-Peter Schulz, head of Hamburg-based Optimum Media Direction. A colleague at the agency warns the new owner against the biggest cutbacks in German television history. Instead, Bauer must continue to invest in the program. "The new owner would do well," says Uwe Becker from Unilever, "to carefully familiarize himself with the business and not tear down any walls."
Whether Urs Rohner will play a role remains uncertain. One thing is certain: he was chief strategist for the mega merger of Sat 1 and the ProSieben Group. In other words, the Zurich native built the largest TV group in Germany. At least this historic success can no longer be taken away from him.