Frankfurter Allgemeine Zeitung GmbH

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Frankfurter Allgemeine Zeitung GmbH

Hellerhofstrasse 2-4
D-60327 Frankfurt am Main
Germany
Telephone: ( +49) (69) 7591-0
Fax: ( +49) (69) 7591-1743
Web site: http://www.faz-verlag.de

Private Company
Incorporated: 1949 as Frankfurter Allgemeine Zeitung GmbH
Employees: 1,137 (est.)
Sales: EUR 458 million ($575 million) (2003)
NAIC: 511110 Newspaper Publishers; 511130 Book Publishers; 511140 Database and Directory Publishers; 323110 Commercial Lithographic Printing

Frankfurter Allgemeine Zeitung GmbH publishes the German daily newspaper Frankfurter Allgemeine Zeitung —FAZ for short. Created by about 300 editors and a tightly knit network of correspondents worldwide, Frankfurter Allgemeine is published Mondays through Saturdays, read by roughly one million readers daily, and distributed to 148 countries. In addition to putting out Frankfurter Allgemeine, Frankfurter Allgemeine Zeitung GmbH publishes the weekly newspaper Frankfurter Allgemeine Sonntagszeitung and the regional daily newspaper Rhein-Main-Zeitung in the Frankfurt region. The company also owns the regional daily newspaper Märkische Allgemeine, which is distributed in the Potsdam region, as well as a number of commercial printing businesses and book publishers. Other activities include information broker services, electronic databases, and logistics services to other newspaper publishers. Frankfurter Allgemeine Zeitung GmbH is majority-owned by the FAZIT-Stiftung Gemeinnützige Verlagsgesellschaft mbH, a non-profit foundation.

Postwar Origins

Frankfurter Allgemeine Zeitung (FAZ) was the brainchild of a group of dedicated democratic minds whose goal it was to establish a politically independent daily newspaper with national reach in Germany after World War II. Its initiation and early days were mainly determined by the newspaper's first business manager, Otto Klepper. Klepper, a lawyer and social democrat, became Prussia's minister of finance during the Great Depression. After Hitler's National Socialists came into power in 1933, Klepper left the country to escape from their terror campaign against social democrats. During his exile, he connected with other German emigrants and developed a political vision for a post-Hitler Germany. Determined to help establish a democratic society after the war, Klepper returned to Germany and helped found Wirtschaftspolitische Gesellschaft (Wipog), a nonprofit organization to promote democracy based on a social market economy, in 1947. Convinced that the success of a democratic postwar order heavily depended on politically independent media, he came up with the idea to publish an independent daily newspaper. With a meager DEM 100,000 in funding from Wipog, Frankfurter Allgemeine Zeitung GmbH (FAZ-Verlag) was founded in 1949, and Klepper became the first business manager of the publishing venture.

The company's corporate charter stipulated that the editorial direction of the newspaper be collectively determined by an editorial management team consisting of the five founding editors. One of them, Erich Welter, a journalist, editor, and lecturer with a background in politics and economics was a consultant to the Mainz-based regional daily newspaper Allgemeine Zeitung after World War II. Before the war, he had worked for the Frankfurter Zeitung, another daily newspaper in the Frankfurt am Main region, which was banned by the Nazis in 1943. Many of the newspaper's former editorial staff ended up working for Allgemeine Zeitung after the war. From this group of former colleagues, Welter recruited the first editorial team of the Frankfurter Allgemeine Zeitung.

On November 1, 1949, the first issue of FAZ was published. As stated by the leading editorial team on page one, Frankfurter Allgemeine was to be "a voice of Germany in the world." However, in its 16 pages there was no mention of the country's past under Hitler. In 1950, after less than a year, Otto Klepper, disgruntled with FAZ' editorial direction, resigned as FAZ-Verlag's business manager and later as Wipog's chairman. While it was his vision to create a politically independent newspaper with a critical view of postwar Germany, FAZ soon drifted into the mainstream of the dominant public opinion, which was strongly influenced by the new political powers and by the veil of silence that covered the country's shameful Nazi past. However, the second part of Klepper's vision—to create a newspaper for the whole German nation—was soon to become true.

Modest Existence in the 1950s

While Frankfurter Allgemeine quickly gained a considerable distribution during the second half of the 1950s, the early years were difficult and quite modest. The paper's editorial staff worked out of two apartments in Frankfurt am Main, together with the administrative and advertising department. The offices of the latter turned into bedrooms every night for the tenants who lived there. Another group of editors was located in Mainz, where the paper was printed. Manuscripts and correspondence were transported back and forth by messengers, first by train and later by motorcycle. Frequently, editorial staff and publishers switched offices back and forth between Frankfurt and Mainz. In October 1950, FAZ moved to new offices in Frankfurt's Börsenstrasse, where the whole staff worked under one roof for the first time. Printing of the newspaper was also moved to Frankfurt, a few blocks down from its new offices, where Frankfurter Rundschau, another Frankfurt-based daily newspaper, was printed. On the floor that FAZ-Verlag had initially rented, editors and secretaries sat at their desks on garden chairs from local apple wine bars. When it was raining, many of them had to bring an umbrella into the office to stay dry. If an editor wanted to go on a business trip, it was expected that he traveled after his daily work at the office was done and showed up on time the very next morning. However, the staff was highly motivated to make the "newspaper for all of Germany."

The subscribers of Allgemeine Zeitung's national edition became FAZ 's initial reader base. Until the mid-1950s, FAZ sold fewer than 100,000 copies daily on average. Parts of Germany's population struggled to make ends meet, unemployment was high, and money was tight. However, when the German economy began to pick up speed again in the mid-1950s, Frankfurter Allgemeine 's revenues rose steadily. In 1959, an average of more than 200,000 copies daily were sold for the first time. In the same year, the newly founded nonprofit foundation FAZIT-Stiftung Gemeinnützige Verlagsgesellschaft mbH became the majority shareholder of Frankfurter Allgemeine to ensure its independence.

Growth and Diversification until 1989

FAZ 's evolution into a national German newspaper was closely connected with the postwar economic boom under the political leadership of Christian Democrat Konrad Adenauer. His chief economist Ludwig Erhard, who had studied with the same liberal socialist—Franz Oppenheimer—as Welter and promoted the idea of a socially "softened" model of capitalism called Soziale Marktwirtschaft —social market economy. A co-founder of Wipog after the war, Erhard used FAZ as a medium to propagate this idea. Soon FAZ became the voice of Germany's politically conservative entrepreneurial elite and remained so for many decades to come.

In 1961, FAZ-Verlag moved its headquarters to Frankfurt's Hellerhofstrasse. Around the same, time FAZ-Verlag's management decided to change printers. From then on, FAZ was printed by Frankfurter Societäts-Druckerei. During the "economic miracle" years and in the decades after, the company greatly expanded its readership and distribution—nationally as well as internationally. Nationally, the number of FAZ readers grew by roughly 50,000 each decade. Internationally, the Frankfurter Allgemeine became a highly respected publication which was soon distributed in most countries around the world. In 1988, a brand-new office building was added to the newspaper's headquarters to contain the growing editorial and administrative staff. FAZ-Verlag had succeeded in creating a highly regarded national print medium that was very attractive to advertisers. Roughly 70 percent of the newspaper's revenue was generated from advertising, in particular from national and international classified ads for jobs and business advertising. As FAZ grew considerably in size through advertising, its content expanded accordingly. For example, a full-color supplement, the Frankfurter Allgemeine Magazin, was added to the paper's weekend edition. In addition to the Frankfurter Allgemeine, FAZ-Verlag launched the business newspaper Blick durch die Wirtschaft, the daily newspaper Rhein-Main-Zeitung, and a Sunday edition of the FAZ in the Frankfurt/Main region. Over the years, FAZ-Verlag also established a tightly knit logistics arm that distributed its newspapers.

Although the newspaper business was thriving, FAZ-Verlag's management realized that it was economically unsound to depend on one main source of income that was extremely vulnerable to economic downturns. Consequently, the company began to branch out into new business activities in the 1980s and 1990s. FAZ-Verlag offered information broker services from its electronic databases, published business books, and even launched its own business radio program. The company acquired minority or majority shares in a number of book publishers, commercial printers, a book retail chain, and in the business news wire service Vereinigte Wirtschaftsdienste as well as in the radio and TV channels Radio/Tele FFH and RTL plus.

Company Perspectives:

Editorial Peak Performance. Frankfurter Allgemeine Zeitung has time and time again been regarded as one of the world's best newspapers. Frankfurter Allgemeine Zeitung owes this reputation to its detailed, exclusive background reporting and solid analysis. The clear distinction between news and commentary is one of its basic editorial principles. The results are competence and trustworthiness, from which its advertisement business benefits.

After the Berlin Wall fell in 1989, FAZ-Verlag acquired Märkische Verlags-und Druck-GmbH, the publisher of the eastern German regional daily newspaper Märkische Allgemeine Zeitung in Potsdam, including its large printing department. Beginning in 1994, a part of the daily FAZ edition was printed in Potsdam. Another acquisition in eastern Germany was Berlin-based Deutsche Zeitungsverlag GmbH, the publisher of the East German daily newspaper Neue Zeit. While Märkische Allgemeine successfully established itself as the leading subscriber-based newspaper in the state of Brandenburg surrounding Berlin, Neue Zeit ceased publication in 1994.

New Highs and New Lows after 1995

After the reunification of Germany in 1990, the growth of FAZ circulation slowed while the newspaper's advertising business declined significantly. With job classifieds down almost 30 percent and paper prices up more than 20 percent, FAZ-Verlag slipped deeply into the red. At the same time, competition intensified among both newspaper publishers and print and electronic media for pieces of the shrinking advertising pie. To make up for its losses, FAZ-Verlag streamlined its various shareholdings and sold off its lucrative stake in private TV-station RTL plus. In 1995, the company launched a highly acclaimed image campaign in major news and business magazines with the heads of well-known individuals from Germany's intellectual, political, and cultural scene buried in the FAZ, accompanied by the newspaper's traditional slogan: "There's always a smart head hidden behind it." Beginning in 1996, the number of FAZ copies sold on average started climbing again, by about 4,000 copies a year. In the business year 1996, FAZ-Verlag passed the DEM 1 billion mark in total sales for the first time. Two years later, the number of FAZ copies sold daily on average exceeded 400,000—another first.

By 1999, FAZ-Verlag's 50th anniversary year, the company seemed to be back in good financial standing. Over 1.1 million people read the Frankfurter Allgemeine. The average number of FAZ copies sold daily peaked at 408,411. Advertising revenues had jumped a healthy 28 percent within two years. There were 500 editors working for the newspaper—a record number—supported by a worldwide network of 40 correspondents. The goal of the founders had been reached: Frankfurter Allgemeine had become a newspaper for the whole of Germany—roughly four-fifths of the daily copies were sold outside of the Frankfurt am Main region—and a voice of Germany in the world. In the summer of 1999, a thousand opinion makers on the international scene were asked which newspaper was the best in the world, and Frankfurter Allgemeine Zeitung ranked third after the British Financial Times and the American New York Times. The newspaper's design had not changed much in 50 years: Its title as well as feature article headlines were printed in an old-fashioned German typeface; there was no picture on the front page; and, although technically possible and used by other competitors, the whole paper was still printed in black and white. Frankfurter Allgemeine even decided to disregard the new spelling rules introduced in Germany because the paper's managing editors thought they were not clear enough.

However, while Frankfurter Allgemeine tried to preserve the paper's traditions, formidable challenges were looming. On one hand, the late 1990s brought a new generation to the paper's editorial management team after the managing editors who had shaped FAZ through the years of the Cold War retired. The younger journalists did not have the black-and-white worldview held by their predecessors. The world had grown more complex and so had the ideological battles. In addition, the loyal readers of Frankfurter Allgemeine had come of age along with the paper: Three-fourths of its readers were at least forty years old. On top of that, a major market force had emerged in the mid-1990s that threatened FAZ-Verlag's core business—the Internet. Not only was more and more high-quality content available online, often for free, but the new medium almost instantly developed into a thriving job marketplace, eroding Frankfurter Allgemeine 's main source of advertising revenues.

To counteract this threat, the company initiated a number of new ventures. In 1999, FAZ-Verlag launched the "Berlin Pages," a daily supplement for the German capital, while the unprofitable FAZ-Magazin ceased publication. Another publishing venture took the form of the free advertising weeklies Sunday and Sunny. One year later, the company introduced an English edition of FAZ in cooperation with the International Herald Tribune. Another major step followed in 2000 when FAZ put out an online version of the paper and strengthened its Internet arm to include an information broker and other online services. Finally, in September 2001, the company tackled the German market for Sunday newspapers with the national launch of Frankfurter Allgemeine Sonntagszeitung (FAS). Also among FAZ-Verlag's new ventures was the creation of a logistics firm that offered distribution services to other publishers, an idea that proved immediately successful.

After three record years, the company's expansion came to a sudden halt in 2001. In the aftermath of the bursting of the so-called "Internet Bubble," FAZ-Verlag's advertising business plunged, and the company slipped deeply into the red again. By 2002, FAZ-Verlag had lost more than half of its advertising revenues. With financial resources dwindling, the company abandoned most of its new ventures and launched a comprehensive cost-cutting program. For the first time in its history, FAZ fired a number of editors for economic reasons. In mid-2004, FAZ-Verlag announced that the company had made the turnaround and was expecting to become profitable again. Two of the company's main goals were to reach the break-even point with FAS and to streamline and strengthen the Internet edition of FAZ and other online services. While the company was not in immediate danger of going under, signs abounded that FAZ-Verlag would not have an easy ride. In 2004, for example, Axel Springer Verlag, which had dominated the German market for Sunday papers for decades before the launch of FAS, launched WELT KOMPAKT, a new national daily newspaper.

Key Dates:

1949:: National daily newspaper Frankfurter Allgemeine Zeitung is launched in Germany.
1959:: Newly founded FAZIT-Stiftung becomes majority shareholder.
1961:: FAZ-Verlag moves to new headquarters on Frank-furt's Hellerhofstrasse.
1979:: FAZ circulation passes the 300,000 mark.
1990:: FAZ-Verlag acquires Märkische Verlags-und Druck-GmbH.
2001:: The national weekly newspaper Frankfurter Allgemeine Sonntagszeitung is introduced.

Principal Subsidiaries

Verlagsgruppe Märkische Verlags-und Druckgesellschaft mbH; Union Verwaltungsgesellschaft mbH; Deutsche Verlags-Anstalt GmbH; Prestel Verlag; F.A.Z. Institut für Management-, Marktund Medieninformationen GmbH; Medienservice GmbH & Co. KG; Maincom Telemarketing Services GmbH; Verlagsgruppe Leadermedia.