Axel Springer’s smart acquisition strategy
The German media conglomerate is in talks to buy Politico.
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Axel Springer’s smart acquisition strategy
If the last few years have taught us anything, it’s that media acquisitions are difficult to execute well. Go back and look at the press releases announcing Disney’s acquisition of Fullscreen, Verizon’s acquisition of Oath, or AT&T’s acquisition of Warner Media, and you’ll find all sorts of touted synergies that never came to pass.
That’s why Axel Springer’s 2015 acquisition of Business Insider is so interesting, in that it actually produced real synergies. At the time, BI was evolving from a scrappy blog into a more mature media operation, and for $450 million it offered Axel Springer the perfect foothold into the American market.
Shortly after the acquisition closed, Axel Springer assigned Claudius Senst, its then SVP of business development, with building Business Insider’s reader revenue strategy. In late 2017, it launched a paywall that gated a small amount of its premium content while leaving the vast majority of articles free, and over the next few years it scaled up both its subscriptions and advertising enough that it actually was able to expand its newsroom during the pandemic while every other media outlet was announcing layoffs.
Why am I talking about this now? WSJ reports that Axel Springer is in talks to acquire Politico, though it’s unclear how advanced these talks are and what the asking price is.
That being said, it’s easy to understand why Politico is an attractive target. Its main website is free and sells advertisers on access to DC’s influencer class, both through its publication and live events. It also publishes Politico PRO, a high cost subscription product that reports on the policy minutiae that’s pertinent to the work of lobbying groups, special interests, and Wall Street hedge funds. While Business Insider offers entree into the power centers of tech and business, Politico offers the same for the federal government. It also doesn’t hurt that the two companies have had an ongoing partnership in the management of Politico Europe.
If the deal goes through, Axel Springer will suddenly find itself to be one of the most influential publishers in the U.S. — no easy feat considering that it had virtually no footprint here just a few years ago.
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