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Bertelsmann’s Rabe raises possibility of RTL-ProSiebenSat.1 merger

Bertelsmann and RTL boss Thomas Rabe has called for looser regulation that would permit a merger of Germany’s leading commercial broadcasters – RTL Group and ProSiebenSat.1 – in the face of competition from global media and tech giants.

Thomas Rabe

Interviewed by German newspaper Frankfurter Allgemeine Sonntagszeitung on Sunday, Rabe said that it was “extremely important” that local media groups are allowed “to create national champions” to take on the might of the US studios, streamers and tech giants. He specifically raised the possibility of a merger of RTL and ProSiebenSat.1

Rabe also told the paper that Bertelsmann had been increasing its stake in RTL, in which it is the majority shareholder, over the last few months. However, he said that Bertelsmann did not plan to consolidate the broadcaster and delist it.

It is questionable whether a merger of Germany’s two leading commercial broadcasters would meet with the favour of Germany’s cautious competition watchdog, although there have been signs of a more flexible attitude from regulators over the last year or so. RTL and ProSiebenSat.1 are currently cooperating in advertising technology, for example.

ProSiebenSat.1 for its part has sought to bring RTL on board its Joyn streaming venture with Discovery, but the Bertelsmann-backed group has resisted thus far, preferring to focus on its own on-demand offerings.

Both RTL and ProSiebenSat.1 have undergone significant internal restructuring over the last year as their core business has come under increasing pressure.

RTLunveiled a new management structurein August with a new group management committee made up of the RTL executive leadership and the CEOs of RTL Deutschland, M6 Group and Fremantle. It passed control of its pan-European advanced advertising units to RTL Deutschland, while French broadcaster M6 took responsibility for streaming.

ProSiebenSat.1 restructured into three arms last year encompassing, e-commerce, production and entertainment. The e-commerce unit was branded as Nuuday and ProSiebenSat.1 recently became SevenOne Entertainment. Production unit Red Arrow was meanwhile put up for sale.

In terms of consolidation, ProSiebenSat.1 already has a suitor in the shape of Italy’s Mediaset, which recently increased its stake in the German broadcaster to 15.1%. ProSiebenSat.1 has however made it clear that it is not in favour of a merger with the Italian media group.

RTL named Rabe, who is also the broadcaster’s chairman as well as  the CEO of Bertelsmann, as CEO in April last year following the resignation of Bert Habets.