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Axel Springer has paid dividends of more than €750mn over the past four years, including a large award that came weeks after the German media group announced hundreds of job losses at its domestic news outlets.
Figures seen by the Financial Times show that shareholders in the owner of Politico, including chief executive Mathias Döpfner and US private equity group KKR, shared a total of €125mn in March last year.
The payout came a month after staff at the publishing house’s flagship tabloid Bild and its conservative broadsheet Welt were told they faced a €100mn budget squeeze and the closure of a string of regional offices as part of what the company billed as a digital overhaul.
Dividends have totalled €776mn since 2020, the year after KKR became Axel Springer’s biggest shareholder, according to a document seen by the FT. The firm holds a 36 per cent stake in the German media group, which also owns online jobs platform Stepstone and several online real estate sites.
The payouts compare with total group profit of about €770mn for the relevant period, while adjusted earnings before interest, tax, depreciation and amortisation were €2.9bn on revenues of more than €13bn.
Abi Watson, a senior research analyst at media consultancy Enders Analysis, said it appeared that all of the company’s earnings were being passed to shareholders. “The question is whether this is coming at the expense of investment in the business,” she said.
However, Axel Springer rejected that suggestion, arguing that dividend payments had declined since the company delisted in 2020.
“This reflects the long-term strategy of our shareholders, allowing for allocation of capital for our successful growth over the last years, and underscores the decision to delist,” the company said.
Dividend payments have been fixed at a flat level of €125mn a year in recent years, according to a person familiar with the situation who said that, against a backdrop of rising revenues, this had enabled the company to make investments such as its $1bn acquisition of Politico in 2021.
Nonetheless, a payout of roughly €400mn in 2021 linked to the sale of the company’s French car classified business means total dividends paid over the past four years were higher than the total of €751mn in the preceding four years.
KKR valued the company at €9.4bn at the end of 2022, according to the figures seen by the FT — up from a valuation of about €6.8bn when the private equity firm staged its 2019 buyout.
The payouts include a total of at least €140mn for the 60-year-old Döpfner, the long-serving chief executive who has sought to transform the company from a German-focused publishing house into a global media player.
Döpfner, who has spearheaded the company’s expansion into the profitable classified sector as he grasped the threat posed by the internet to traditional media, launched its failed bid to buy the Financial Times in 2015 followed by the successful effort to buy Politico.
The former music journalist became a billionaire overnight in 2020 when Friede Springer, widow of the media group’s eponymous founder, sold him 4 per cent of her shares and gifted him a further 15 per cent. Added to his previous shareholding, that gave him a 22 per cent stake that is now worth about €2bn.
Döpfner, who last year celebrated his 60th birthday at a party in Tuscany with guests including Elon Musk, has insisted he does not feel like a billionaire, arguing that he had to go into debt to buy Friede Springer’s shares. He has sought to play down his wealth, telling New York magazine in 2022: “I will own no boats and no planes. I’m not playing golf. I have no sports cars.”
Other Axel Springer shareholders include Canadian pension fund CPPIB, which owns a 13 per cent stake. The rest of the company is owned by Friede Springer and her charitable foundation, plus two of Axel Springer’s grandchildren from a previous marriage.
Axel Springer defended the paying of a dividend when deep cuts were taking place in its German media division.
“At Axel Springer, we operate under the principle that each business unit must be successful on its own merit and we will adjust the business strategy accordingly wherever needed to remain competitive in each of the segments and markets we operate in,” it told the FT.
KKR and CPPIB declined to comment.
Details of the dividend payments risk damaging relations between company management and its editorial divisions amid tension with journalists at the business news outlet Insider, which was bought by Axel Springer in 2015.
Staff at Insider are furious at their parent company’s decision to order a review of the publication of two stories alleging plagiarism by Neri Oxman, a designer and former MIT professor who is the wife of billionaire hedge fund manager Bill Ackman.
Oxman has apologised on X for omitting quotation marks in four paragraphs of her doctoral dissertation while noting that she had properly credited original sources both at the end of the paragraphs and in her bibliography. Ackman has also written lengthy posts on X rejecting the allegations and attacking Insider for publishing them.
Additional reporting by Olaf Storbeck
