Frankfurter Rundschau: Imminent end of 70-year tradition

by Melanie Loos

It’s a dark day for the employees and a dark day for media diversity in Germany”: this is how the trade unions responded to the possible failure of the Frankfurt-based daily newspaper in November 2012. Some 400 redundancies later, the Fankfurter Rundschau is now producing under the same roof with the Frankfurter Allgemeine Zeitung.

After more than a decade of financial woes, one of Germany’s largest daily newspapers, the Frankfurter Rundschau (FR), filed for insolvency in November 2012. Founded in 1945, it has one of the longest traditions in the German newspaper landscape and ranks 6th among national papers in terms of circulation.

The decision to file for insolvency was due to falling circulation and massive losses over the past ten years. In 2012 alone, the newspaper has made losses worth 16 million euros. Its 487 employees – half of them working in the printing plant – were at risk of losing their jobs. Within a decade FR‘s circulation shrunk by a third from 183,000 to 118,000. Losses of revenue are mainly due to the declining advertising business and print contracts. In 2012 revenues from advertising fell by 15 per cent compared to the previous year.

The paper’s financial problems began in 2001 – when it was still employing 1,500 people – due to the sharp decline in the advertising market and its shrinking circulation. In 2004 it was bailed out by the regional government of Hesse, before being bought by the Social Democratic Party’s media holding, DDVG, in 2004. The latter held 90 per cent of the company until 2006, when publishing house DuMont Schauberg purchased the majority stake of 50 per cent, while DDVG kept 40 per cent. A ten per cent stake has always remained with the Karl Gerold Foundation named after the former publisher and editor-in-chief. But the troubles continued. In 2007 the paper reduced its size to tabloid format aiming to attract new readers. From 2011 its main articles were jointly produced in Berlin with the news desk of another paper, the Berliner Zeitung. The editors in Frankfurt produced mainly regional content and supplementary content for the sports and education sections. A digital edition was launched in 2010.

The newspaper’s announcement in November 2012 was followed by harsh criticism from the trade unions, asking the company to avoid redundancies. The chairman of the German Federation of Journalists (DJV), Michael Konken, said: “The insolvency of the Rundschau is the result of decades of mismanagement”.

After filing for insolvency an administrator, Frank Schmitt from the Frankfurt-based firm Schultze & Braun, was appointed. During the three month preliminary insolvency proceedings – which meant total uncertainty for the daily’s employees, but also for its 120,000 paying readers – some investors showed interest in buying the ailing business. If no buyer was found within this period, it would stop publishing by the end of January 2013. One of the potential investors, Frankfurt’s other major national newspaper, the conservative Frankfurter Allgemeine Zeitung (FAZ), made the best and most feasible bid.

The German antitrust authority approved the acquisition by Frankfurter Allgemeine Zeitung and its publisher Frankfurter Societät, who own 35 and 55 per cent respectively of the newspaper since 1st March 2013. Ten per cent remain with the Karl Gerold Foundation, which will guarantee the FR‘s independent status and left-wing stance.

The acquisition has ensured the newspaper’s survival, but it has gone hand in hand with massive downsizing. The majority of the 487 employees were sacked. Only 28 editors are staying on. 250 employees worked in the printing plant that was closed down in May. Like the other redundant employees most of them will be employed in a transfer company for six months.

Since June 2013 the paper is entirely produced in Frankfurt again – both print and digital editions. In a message published in late June, the editor-in-chief, Arnd Festerling, informs the readers that about 90 staff based in Frankfurt are producing the print and digital content as well as about the new structures and some other changes. Among them are the 28 remaining editors, the rest are freelance writers. Most of the freelancers are employed by the temporary employment agency, Pressedienst Frankfurt,and are getting paid below tariff.

The crisis of the FR is one very prominent example of the struggling newspaper and publishing industry. Newspapers face multiple problems as their print readership is growing older, younger generations prefer to read the news on smartphones or tablets; circulation has been falling for years, the advertising market fades away into the internet and as the economy is gloomy companies spend less on advertising. Despite declining income publishers have to invest into new business models, for instance mobile versions of their contents, to avoid being left behind in the digital shift. Around the same time the FR filed for insolvency, another newspaper, the economic daily Financial Times Deutschland went bust and stopped publishing in early December 2012.

Media researcher, Horst Röper, says about the newspaper crisis: “… newspapers have already started to die some years ago. It’s not always entire newspaper publishers going bust, but many papers, especially regional papers, close down their local editions. And the number is increasing. Newspapers’ old funding models, that is advertising and sales revenues are outdated.” Instead he suggests “a third source of revenues of public or private funding”.

The Frankfurter Rundschau lives on, supposedly with its traditional liberal, left-wing stance. But another German newspaper Der Tagesspiegel is concerned about its credibility: “what happens in the background is challenging the newspaper’s identity. Can a left-wing newspaper, which hires staff under those conditions, still denounce age discrimination in its commentaries?” The remaining employees say the most important for the time being is to keep the FR alive. At the end of the day readers will decide – circulation is 75,000 at the moment.