Media Matters

Playing for Profit

Still from fack Ju Goethe Constantin Film Verleih
A still from "Fack ju Göhte," a box office hit for Constantin.
  • Why it matters

    Why it matters

    • As Constantin Media celebrates its recent box-office movie hits, its future really depends on the group’s ties to the Bundesliga soccer federation, which will announce its packages of broadcast rights in the coming months.
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  • Facts

    Facts

    • Constantin is the majority owner of Highlight Communications, but efforts to meld the two publicly traded companies have been unsuccessful.
    • The film division appears to have another hit film with the recent release, “Look Who’s Back,” a satire about Hitler returning to modern-day Germany.
    • After an unsuccessful effort to sell off a segment of the company last year, Constantin executives say they have no plans for acquisitions or sales for the moment.
  • Audio

    Audio

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Constantin Medien is a media group based in Ismaning near Munich, focusing on sports, movies and special events. The company operates the sports licensing agency TEAM and the free TV channel Sport 1, while the film division’s latest release, “Fack ju Göhte”, a comedy about an ex-con turned teacher, has been a smash hit in theaters across Germany.

The disparity between divisions doesn’t concern company CEO Bernhard Burgener, a Swiss national who’s a film buff and an FC Chelsea fan. “An artist would call it an unfinished, never-ending work,” he said, assessing the rapid growth of Constantin Medien.

The firm has several subsidiaries including Highlight Communications, which has since morphed into a multifaceted network. Constantin Medien holds a 52.3 percent stake in Highlight Communications, another publicly traded company owned by Constantin Film and TEAM.

Operating two listed companies is both costly and time-consuming, but efforts to integrate them have been difficult because of financial disparities.

Highlight Communications is very profitable while Constantin Medium only recently emerged from the red with an annual turnover of €488 million ($554.3 million).

Mr. Burgener raised profit projection ranges for the year from his initial estimate of zero to €2 million, to €2 million to €4 million, based on strong performances from Sport 1, two pay-TV channels, sports radio Sport 1 FM and an Internet portal.

“We are not planning changes at present.”

Bernhard Burgener, CEO, Constantin Medien

Constantin Film continues to perform well and has another potential mega-hit with the film “Look Who’s Back,” which portrays Adolf Hitler waking up in the 21st century and deciding to become a stand-up comedian. The film was released in German movie theaters last week.

Still, there are no plans to merge Constantin Medien and Highlight Communications, though Dieter Hahn, the primary shareholder and board chairman at Constantin Medien, gave a very different impression last year.

bernhard Burgener Constantin CEO by Thorsten Jochim
Constantin CEO Bernhard Burgener knows the importance of soccer league broadcast rights. Source: Thorsten Jochim

 

At the time, Mr. Hahn referred to Fred Kogel, who was appointed manager of TV, as ‘Chief Integration Officer.’ Plans to consolidate operations that are currently spread all over Munich into a single entity are on hold. While not ruling out future moves, Mr. Burgener said, “We are not planning changes at present.” No acquisitions or sales are in works, he added.

That hasn’t always been the case. Last year, Mr. Burgener sought to sell Plazamedia’s TV sports broadcasting rights to its top client Sky, which in return would have received a quarter of shares in Sport1. But the deal collapsed when the two sides failed to reach a workable agreement.

Sky declined to make an official comment, but managers requesting anonymity say a purchase agreement for Plazamedia has been inked. Since the pay-TV provider insists on producing its own soccer programs, Sky could sue Constantin for breach of contract.

Another option would be to launch its own production department before 2017, when the Plazamedia contract expires. This would leave the Constantin subsidiary, which employs 280 out of the company’s total workforce of 1,400, without its main customer.

 

Constantin-01

 

Mr. Burgener doesn’t share such a dire view of the future. Plazamedia will still be in operation, even if Sky is no longer a customer, and may commit to more productions for its parent company as it gears up for a Bundesliga announcement on the various rights packages for the championship in coming months.

While Mr. Hahn, as recently as 2014, said the company is eyeing a package including live games for broadcast on all pay-TV channels, Mr. Burgener won’t speculate. Still, he acknowledges the pivotal role played by the Bundesliga Championship. “We want to at least keep the status quo,” he said. “We are open to broader, financially viable possibilities should they arise.”

 

Handelsblatt correspondents Kai-H Renner and Joachim Hofer reported from Ismaning. To contact the authors: renner@handelsblatt.com, hofer@handelsblatt.com

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