Smart money and digital media don’t always mix well. Just ask KKR. Five years after the private equity firm, together with the Canada Pension Plan, bought a roughly 49% stake in German media giant Axel Springer, parent of Business Insider and Politico, the two investors are fleeing the scene.
That might be hyperbolic. Technically what’s happening is that Axel Springer is breaking in two. KKR and the Canadians will walk away with about 85% of Axel’s classified ads business, the most profitable part of the company. The media properties, which also include German newspaper Bild, will stay behind in the existing company. Axel Springer will become 100% owned by Axel Springer CEO Mathias Döpfner, vice chair Friede Springer and Axel Sven Springer, a grandchild of the founder. KKR and the Canadians seem to be getting the better part of the deal.
As CEOs like to do, Döpfner cast this restructuring as the realization of a dream. Some might see it as more like a nightmare in the making. With KKR’s backing, Axel Springer was able to buy Politico at a $1 billion valuation, among a bunch of other purchases. But acquisitions are likely off the table going forward as Axel Springer won’t have KKR or the financial comfort afforded by its classified ads business. Döpfner noted that the media business accounts for only a third of the profits of the current company despite generating half the revenue.
And that media business is operating in an increasingly brutal industry. Google, Meta Platforms and Amazon are steadily swallowing up most of the digital ad business, leaving less and less for small firms to fight over. Just look at BuzzFeed, once a high-flying darling of digital media, which is practically burning the furniture to stay alive as its market capitalization hovers around $100 million. Yet new startups continue to sprout, from Puck to Semafor to The Free Press. BI and Politico both have subscription businesses, to be sure, which may insulate them somewhat from advertising pressures, but selling new subscriptions isn’t easy either.
Axel Springer proudly announced today that since the 2019 buyout, its revenues have risen 30% to nearly 4 billion euros. Someone needs to break it to Döpfner that 30% growth over five years isn’t exactly something to brag about, particularly when the company has made a number of acquisitions that surely inflated the revenue.
Döfner, of course, was upbeat today. He told employees in a note posted online that his plan was for the media company to be “faster, more agile and less bureaucratic” and to “harness the power of artificial intelligence” quicker than rivals. That’s what you call looking at the glass as half-full.
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China’s ‘cheap car’ problem |
If you’ve spent most of your life driving an internal-combustion car, pressing down on an EV accelerator for the first time is hard to describe. “It just goes,” says Kevin Wood, who lives in Hampshire, UK, and bought his first electric car last year. Wood took the leap of faith after discovering he could lease an EV through his employer, with a tax break to boot. Then Wood took a second leap of faith: He chose an Atto 3, made by China’s BYD Co. Ten months later, he remains impressed by the SUV’s range, handling, comfortable seats, trunk space and voice-controlled sunroof. Wood calls it “genuinely a lovely car to drive.” Wood had never heard of BYD before test-driving the Atto — but BYD has its sights set on drivers like Wood. Less than two years after entering the EU and UK markets, the carmaker is pursuing a rapid expansion in both, replete with TV and billboard spots, prime placement at auto shows, and sponsorship of the Euro 2024 football tournament. By the end of next year, BYD plans to double its UK sales and service locations from 60 to 120. Those ambitions are riling politicians. The EU could soon hit Chinese carmakers with additional duties of 17% to 36.3%, on top of the 10% tariff that exporters from China are already subject to. The UK could follow suit. But even without tariffs, companies like BYD face an uphill battle in the region. Consumers remain EV-skeptical, and there’s evidence that they’re particularly skeptical of cars made in China. “[Chinese EVs] can have reviews saying that they are actually very good quality,” says Bert Lijnen, an automotive consultant at Nielsen IQ who has researched consumers’ misgivings about China. “But what do you do about this perception about the country?”  The BYD Seal on a test drive outside London. Photographer: Jose Sarmento Matos/Bloomberg Wood’s car choice makes him something of an outlier. Despite outselling Tesla globally in 2023, BYD sold just under 16,000 cars in Europe. It has sold fewer than 4,000 in the UK. Most of the company’s sales still come from China, where BYD prices its EVs aggressively: An Atto 3 goes for about 137,300 yuan ($19,000), while a Seal starts at 179,800 yuan ($25,000) and a no-frills Seagull costs just 72,000 yuan ($10,100). In a survey of consumers in Belgium, Lijnen found that those least likely to buy a Chinese car most often cited distrust of the country rather than specific concerns about the vehicles. Part of his research involved showing consumers ads for Chinese cars while obscuring their country of origin. The responses were often positive, until the cars were revealed as Chinese.  Get an EV enthusiast behind the wheel of a BYD, though, and many of those reputational concerns dissipate, says Linda Grave, founder of UK-based charging consultancy EV Driver Ltd. “A lot of people are saying the BYD Seal and the Dolphin are representing exceptionally good value for money, and the build seems to be particularly good,” Grave says. “That whole feeling inside the car… It feels like you get an awful lot for your money.”  Smart features in the Seal include a screen that rotates from portrait to landscape and a panoramic roof. Photographer: Jose Sarmento Matos/Bloomberg Some of BYD’s fate in the UK and Europe will depend on its future pricing. The US and Canada have slapped tariffs of over 100% on Chinese EVs, effectively eliminating themselves as markets. In the EU, on the other hand, Lijnen says it’s unclear whether BYD and other Chinese brands will absorb the cost of tariffs or pass them on to buyers. But even with a price advantage, BYD may find that improving its reputation among European car buyers is essential to its expansion goals. Japanese and then Korean cars were also greeted with skepticism in the bloc, until consumers realized Toyota and Kia were making decent cars. Today, a quarter of new cars sold in Europe come from an Asian brand. BYD could also benefit from the rapidly evolving EV landscape, in which it joins other upstart carmakers and a slew of new model names from established marques. Many consumers no longer clock which companies or countries are behind which vehicles: Land Rover is owned by an Indian company, MG is now Chinese, and Vauxhall is French. “Most people don’t think about it that much and they aren’t that aware,” Plummer says. “I think if the product is good and the brand is something that they can find a connection with, then that overcomes the origin.”
 Climate activists and New York Police Department officers during a protest outside of Citigroup Inc. headquarters in New York, on June 10. Photographer: Jeenah Moon/Bloomberg
China is by far the world’s biggest electric car market, with EVs and hybrids accounting for 34% of the 22 million passenger vehicles sold last year. But an exclusive Bloomberg Green analysis paints a less-than-rosy picture of the country’s EV landscape, one where demand is concentrated in wealthy coastal areas and megacities and penetration lags in the poorer, rural areas where about 800 million Chinese people live.  Photographer: NurPhoto/NurPhoto |
BYD isn’t pushing the same pricing in the UK and Europe — the Seal costs just under £46,000 ($60,000) in the UK — but its reputation for cheap cars means would-be buyers are wary. Some 74% of respondents to a Bloomberg Intelligence survey Readers really liked |
 RENCE, SLOVENIA - 2022/07/17: A Croatian Canadair firefighting airplane drops water on a large wildfire burning in the hills above Rence. A large forest fire broke out in the hills of the Karst region of Slovenia as the country suffers from drought and high temperatures. The fire burned the hills for two days. Over 400 firemen fought the blaze with air support from the Slovenian army helicopters, a police helicopter, Italian helicopters and a Croatian Canadair firefighting aircraft. (Photo by Luka Dakskobler/SOPA Images/LightRocket via Getty Images) Photographer: SOPA Images/LightRocket |
Future in focus A vehicle charging station on display at the Electric Vehicle Innovation Summit. Pawan Singh / The National EV optimism | Report says despite short-term challenges for electronic vehicle adoption, the Middle East is primed for success Something to Tok about | One of the world's most influential social media platforms faces tough questioning in court A step behind | The new-age risk bankers are struggling to mitigate Business Extra | How Kamala Harris or Donald Trump might affect Middle East technology aspirations Predicting the future: Signal or noise? The research team at New York University Abu Dhabi As the song goes, it's not easy being green. With that in mind, experts say a UAE study putting green algae under the microscope to boost the fight against cancer could yield tremendous results and potential benefits. This is a signal: Sometimes it's the smallest of things that can give us the biggest clues as to how and why things happen. That sort of thinking, though it might seem obvious in hindsight, is critical for those seeking to deliver life-saving solutions for the most deadly diseases in the world. Not every endeavour like that of New York University Abu Dhabi will yield positive results, but it's equally important that the research not be overlooked. This mentality will also help preserve certain aspects of our environment that otherwise might have been destroyed.
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