One of the largest Russian publishing houses Burda, which publishes the magazines Playboy, Liza and Dobrye Sovetov, is changing owners. German Hubert Burda Media sold the stake to commercial director Jürgen Ulrich, who runs the Russian Burda. According to Kommersant’s information, he will become the main owner of the publishing house, but due to his German citizenship he will attract partners for a buyout in order to fulfill the requirements of the law “On Mass Media”. The deal became an alternative to the closure of Burda in Russia.
Hubert Burda Media sold publishing house Burda, three sources in the publishing market told Kommersant. Two of them note that the share of the German company has already been “actually bought out” by the commercial director of the publishing house Jürgen Ulrich, who has been working for Burda since 1997.
Burda International (head office of Hubert Burda Media) confirmed the sale of the Russian business. “Burda International’s strategic focus is increasingly shifting towards Central and Western Europe, so Russia is no longer our main sales market. The sale of Russian companies is a logical step in the implementation of this new strategy, “Martin Weiss, a member of the board of directors of Hubert Burda Media, told Kommersant. He added that Jürgen Ulrich will take over the business and “will continue to maintain close contact with us.”
Burda has been working in Russia since 1995 and publishes the magazines Burda, Playboy, Liza, Dobrye Sovetov, Ideas for Your Home, various crosswords, etc., collectively managing more than 50 brands. Publishing House Burda was a part of Hubert Burda Media, and after the adoption of amendments to the law “On Mass Media” limiting the share of foreigners in them to 20%, the Germans reduced the stake to 10%. 90% of Everest Culture LLC, the managing director of the publishing house, in 2015 was bought by the chief accountant of Burda, Alexander Efimov. Since August 2020, according to SPARK-Interfax, Playboy Wireless CEO Olga Alekseenko and Production Director Danil Tarasenko have received 45% each in this legal entity, the remaining 10% through Everest Distribution LLC was still managed by a German media holding. Having formally registered the business for the Russians, the Germans continued to manage it, Kommersant sources say.
Jurgen Ulrich declined to comment. He actually played the role of general director of the publishing house, competitors say. According to them, Mr. Ulrich has been living in Russia for a long time, but he will not be able to buy out the business alone because of German citizenship – Roman Doroshenko, who several years ago bought the distribution business of Burda from the Germans, the Sales company (the main owner is Andrey Bogdanov). Other partners can also be involved, the interlocutors of Kommersant note. The new owners, they believe, will pass the rights to publish Burda publications.
The decision of the Germans to leave was expected, the competitor said.
“For Burda, Russian business is unprofitable. While in other countries they invested heavily in the Internet, in Russia they did not. There was a choice: to close the business or sell it, ”he notes.
In the Russian Federation, the fall in advertising revenues in print is “felt more acutely” than in the West, where publishers can raise the final price, another source of Kommersant notes. According to SPARK-Interfax, the revenue of ID Burda JSC in 2020 amounted to 987 million rubles. against 1.2 billion rubles. in 2019, net profit – 10 million rubles. against a loss of 22.2 million rubles. a year earlier.
One of Kommersant’s interlocutors believes that the transaction amount was high, since “Burda is a powerful structure, a bison”. Another believes that, taking into account the losses, the company could have been sold for several tens of millions of rubles. “If seven or ten years ago Burda’s dominant position was obvious, now it is far from the case,” he says. The strongest brand in terms of revenue in the publishing house is considered Burda, under which hobby magazines and publications in the “collect it yourself” format are published, which bring the publishing house into the top 5 in terms of revenue in Russia, one of the competitors estimates.
There were no other applicants for the asset, and in negotiations with the German headquarters of Burda, Jurgen Ulrich was helped by the experience of the German Bauer Media, which also sold the business to top management, the Kommersant source believes. As Kommersant reported in June 2020, Bauer Media Group sold its share in the publishing house, which publishes Secrets of Stars, Oracle, and others, to top managers Alexei Ivanov and Muse Monams.