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German media giant Bertelsmann closed out 2022 on a high, with overall revenue hitting $21.9 billion (20.2 billion euro), the highest in the company’s history. But the group, which controls European TV conglomerate RTL Group and production subsidiary Fremantle, music division BMG and leading publisher Penguin Random House, saw its profits more than cut in half to $1.14 billion (1.05 billion euro) compared to 2021 as Bertelsmann invests heavily to juice the creative and streaming sides of its businesses.
That M&A strategy is most evident at Fremantle, where revenue jumped 22 percent year-on-year to $2.49 billion (2.3 billion euro), helped by the acquisitions of a 70 percent stake in leading Italian TV producer Lux Vide (Devils, Medici) and 51 percent of the Irish group Element Pictures (Normal People, The Favourite). Bertelsmann chairman and CEO Thomas Rabe has set Fremantle a revenue target of $3.25 billion (3 billion euro) by 2025.
BMG, which acquired the German music label Telamo last year, continues to gobble up music rights, in 2022 picking up the back catalogs of Scottish rockers Simple Minds and French electronic music pioneer Jean-Michel Jarre, as well as re-upping contracts with such artists as Rita Ora, Elvis Costello and Julian Lennon.
Bertelsmann has been less successful in its efforts to bulk up its broadcast operations in France, where a proposed merger between RTL-controlled M6 and leading French commercial broadcaster TF1 was called out because of regulatory concerns, and the Netherlands, where anti-trust authorities told RTL earlier this year it would not approve its planned fusion of RTL Nederland with the Dutch Talpa Network.
Rabe, however, is sticking to his game plan, noting Thursday that the group invested $1.73 billion (1.6 billion euro) in its so-called Boost investment strategy and that Bertelsmann will plow a further “five to seven billion euros [$5.4 billion to $7.6 billion]” into strategic investments through 2026.
“The Group’s restructuring and the strategy of the past decade are clearly having an impact. We are growing and are highly profitable,” he said.
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