the sex scandal rocking germany's biggest tabloid
© Provided by The Telegraph Newspaper

Mathias Dopfner was not holding back in his effort to transform German publishing house Axel Springer into one of the world’s biggest online media companies.

Since a failed bid for the Financial Times six years ago, the chief executive has unleashed a transatlantic takeover blitz to establish an era of domination in online news – creating an empire spanning tabloids to traditional broadsheets. 

In 2015 it bought Business Insider for $343m, in 2017 it pumped $10m more into Ozy Media and three years later snapped up newsletter company Morning Brew.

But just as Springer was getting into its stride with a $1bn (£720m) swoop for US political news site Politico, which completed on Tuesday, Dopfner was pegged back on home soil. On Monday he fired Julian Reichelt, the editor of German tabloid Bild, made famous by its opposition to Brexit, after being accused of having an affair with a subordinate.

The scandal has surfaced concerns over whether Springer can keep its companies in check and succeed in its fight to become a global media player.

the sex scandal rocking germany's biggest tabloid
© Provided by The Telegraph Mathias Dopfner – Malte Ossowski/SVEN SIMON/DPA

A New York Times report unveiled claims of sexual misconduct levelled at Reichelt, who stayed in his post despite concerns raised in March. The newspaper claimed Reichelt had promoted a junior member of staff to a more powerful newsroom position while the pair were having an affair. Bild has been contacted for comment.

In November 2016, the now-former editor allegedly claimed he would lose his job “if they find out that I’m having an affair with a trainee”, according to testimony by the woman to investigators.

Despite efforts to hang onto a key lieutenant who maintained Bild’s position as Europe’s biggest selling daily newspaper, Springer was forced to act.

In a statement announcing Reichelt’s departure, the parent company said: “The board has learned that even after the end of the compliance procedure in spring 2021, Julian Reichelt continued not to clearly separate private and professional affairs and had told the board untruths about this.”

So in lies the challenge now facing Dopfner: just as he was transforming Springer into a pre-eminent modern media business, his vision has come under threat by claims reminiscent of the newsrooms of yesteryear.

the sex scandal rocking germany's biggest tabloid
© Provided by The Telegraph Julian Reichelt – Bernd von Jutrczenka/DPA

Dopfner risks being accused of losing sight of the problems consuming his existing businesses by focusing too much on the companies of tomorrow.

His focus on expansion has certainly been a long-time in the making. The 58-year-old media executive – and former editor-in-chief of Springer’s daily broadsheet Die Welt – has been consolidating the publisher’s, and his own power since taking the helm in 2002. 

Last September Dopfner was handed 15pc of the publisher by Friede Springer – the business’ heiress. Dopfner then bought another 4.1pc of her shares, handing them each 22pc of the company. 

It was part of a wider transaction that saw Springer delist from the Frankfurt Stock Exchange and become majority owned by American buy-out fund KKR, which holds a 43.5pc stake. 

Such re-shaping has been paired with big bets on online journalism – for Dopfner, the vision stretches beyond the need to protect his print and TV business from the digital revolution. 

“Axel Springer aims to create the leading digital media publisher in the democratic world,” the company told the Financial Times in August. 

Bets on a string of US online news ventures have followed the failed tussle for the FT and the buyout of Business Insider, but success has been mixed.

Springer has a minority stake in Thrillist, the online entertainment and travel website with a dedicated section on cannabis culture. 

The German group also holds a small slice of NowThis, the left-leaning site that was forced to remove part of a video in January last year after it falsely claimed Anne Frank did not die in a concentration camp. NowThis has also become ensnared in a sexual misconduct scandal of its own in June 2020, which led to the departure of associate producer Jackson Davis.

More recently, Dopfner has been forced to contemplate his bet on Ozy Media, the left-wing digital start up brought low by an impersonation scandal. 

While Ozy had planned to wind down after a New York Times column revealed its chief operating officer pretended to be a YouTube executive during talks over a $40m (£30m) investment, chief executive Carlos Watson vowed to fight on following talks with investors and advertisers early this month. 

the sex scandal rocking germany's biggest tabloid
© Provided by The Telegraph Carlos Watson – Kimberly White/Getty Images

Springer is, however, willing to embrace a range of growth models in order to reach its end goal, demonstrated by the decision to buy Morning Brew, the American newsletter business with more than 2.5m subscribers.

Francois Godard, of Enders Analysis, says Dopfner hopes to learn from the businesses he buys in order to build a stronger group, but whether it is working remains to be seen. 

“So far I am on the wait and see side,” he says. 

“I have not been impressed by Business Insider. I don’t understand where they want to take them – populist or investigative?

“Can they do better at international expansion than following the failed model of Huffington Post?

“Certainly Politico will give them insights on what they could do with Insider, if the brand has not been too much damaged already.”

Meanwhile, Dopfner’s deal-making style has raised eyebrows. Jim Vandehei, the founder of US news website Axios, reportedly pulled out of a deal with Springer earlier this year because he found Dopfner’s approach “sneaky”. 

The chief executive had conducted parallel conversations with both Politico and Axios and hoped to merge the two organisations, but Vandehei, who used to work at Politico, did not feel comfortable keeping the deal a secret. 

Despite scandals at home and teething problems stateside, Dopfner is still believed to have plenty of appetite to gobble more online news sites. The question is, where will the cross hair fall?

Questions have been raised over whether Dopfner could feel emboldened to buy The Athletic, the US subscription sports website, after it hired bankers from LionTree to help find a buyer.

Either way, Dopfner faces the imposing challenge to keep his rapidly-expanding media empire in check. In the world of fast-rising online media companies, controversy and chaos comes with the territory.

But if scandals manifest in Springer’s existing businesses, questions may mount over whether the German publisher has what it takes to turn unpolished, promising, start-ups into the media juggernauts of tomorrow.

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