Germany shocked by Kogel, le Claire exits

Both highly respected in the German industry

BERLIN -- "It's a complete shock," was the comment from one local exec to the surprise news that the heads of not just one but two of Germany's leading distributor/producers -- Bertil le Claire of Kinowelt and Fred Kogel of Constantin -- were stepping down.

"There weren't even rumors beforehand," said the exec, a veteran of the German film scene. "Both of them are highly respected in the industry and have been great for their individual companies."

The numbers tell the story here. Le Claire, with Kinowelt founders Michael and Rainer Kolmel pulling strings in the background, helped rebuild the film group after it emerged from insolvency in 2003, nearly doubling revenue and putting the company solidly in the black. Kogel diversified Constantin's film-dependency by expanding into television production and shored up its licensing business, ensuring a steady rate of solid returns (see chart).

Indeed, the one-two exit of Kogel and le Claire -- they announced their resignations Thursday within hours of one another -- says less about the pair's management skills and more about the ongoing consolidation in the German industry.

French giant StudioCanal acquired Kinowelt for 70 million euros ($110 million) in January in a move to establish a distribution beachhead in the German market.

Constantin is playing a supporting role in the planned merger of its majority shareholder -- Swiss group Highlight Communications -- with Munich-based sports rights group EM.Sport Media.

While the Kinowelt takeover is a foreign invasion, the Highlight-EM merger is very home grown. It has been carefully orchestrated by Leo Kirch -- the back-with-a-bullet octogenarian mogul who is slowly moving to rebuild the media empire he lost when KirchMedia went up in flames in 2002.

The German cartel office has given Kirch the green light to begin the process of merging Highlight with EM.Sport Media. Currently, Kirch controls 17.1% of EM, which in turns holds a 37.6% stake in Highlight. The state financing authority will soon rule on whether EM can now make a buyout offer to Constantin minority shareholders.

But don't expect any sudden changes at Constantin. Kogel is staying on as CEO until the end of the year, when he step aside for Highlight exec Bernhard Burgener. A longtime "friend of Leo" Kogel will continue to hang around after the handover as a consultant for Constantin. It would surprise no one if the shaggy-haired Kogel turns up again in a key position in the new Kirch empire.

The big moves may come at Kinowelt. Le Claire is out at the end of the month. StudioCanal director general Romain Bessi will take over the reigns at his German subsidiary in the interim, but Kinowelt will have to find a replacement. And fast. The choice of the new boss will speak volumes about StudioCanal's plans for Kinowelt. Will it be a local yes-man taking all his orders from Paris or an independently minded veteran looking to take Kinowelt to the next level? Watch this space.