THE MEDIA EQUATION

At Axel Springer, Politico’s New Owner, Allegations of Sex, Lies and a Secret Payment

A high-flying German media giant is ahead on digital media but seems stuck in the past when it comes to the workplace and deal-making.

Julian Reichelt, the newsroom leader at the German tabloid Bild, whose workplace conduct was the subject of an investigation.

Julian Reichelt, the newsroom leader at the German tabloid Bild, whose workplace conduct was the subject of an investigation.

Credit...

Clemens Bilan/EPA

By Ben Smith

Published Oct. 17, 2021Updated Oct. 18, 2021, 2:15 p.m. ET

A high-level editor at the powerful German tabloid Bild was trying to break things off with a woman who was a junior employee at the paper. He was 36. She was 25.

“If they find out that I’m having an affair with a trainee, I’ll lose my job,” the editor, Julian Reichelt, told her in November 2016, according to testimony she later gave investigators from a law firm hired by Bild’s parent company, Axel Springer, to look into the editor’s workplace behavior. I obtained a transcript through someone not directly involved.

Just before the editor spoke those words, another woman at the paper had lodged a sexual harassment complaint against the publisher of Bild. But Mr. Reichelt’s relationship with the junior employee continued, she testified, and he was promoted to the top newsroom job in 2017.

Mr. Reichelt then gave her a high-profile job, one she felt she wasn’t ready for, and he continued to summon her to hotel rooms near the gleaming Berlin tower occupied by Axel Springer, she said.

“That’s how it always goes at Bild,” she told the investigators. “Those who sleep with the boss get a better job.”

This account is drawn from an interview conducted in the spring by a law firm retained by Axel Springer for an investigation that quickly closed, clearing Mr. Reichelt. A spokeswoman for Axel Springer and Mr. Reichelt, Deirdre Latour, said the woman’s testimony included “some inaccurate facts,” but declined to specify which ones.

Mr. Reichelt did not, as he feared, lose his job when his relationship with the woman, as well his conduct toward other women at Bild, became public. Instead, Mr. Reichelt, who denied abusing his authority, took a brief leave and then was reinstated as perhaps the most powerful newspaper editor in Europe after the company determined that his actions did not warrant a dismissal.

Bild is the flagship publication of Axel Springer, a titan of German media since after World War II. The company is now focusing much of its energy on the United States. American media types may know it mainly for its leader, Mathias Döpfner, a charismatic chief executive who moved more swiftly than most traditional publishers to embrace the internet.

In 2015, the company bought Business Insider (now called Insider) for $442 million. This summer, it announced that it had purchased Politico for $1 billion. Axel Springer aims “to become the leading digital publisher in the democratic world,” Mr. Döpfner told me in an emailed statement.

But as the reports on the Bild investigation suggest, the company’s workplace culture may be stuck in a time warp. And as Axel Springer moved across the Atlantic this summer on its spending spree, the company’s aggressive and — a key American executive said — “sneaky” style of doing business generated friction.

To get a feel for the German company now emerging as a major player in American, and global, media, it’s important to understand the man for whom it was named, a towering figure in postwar media.

Axel Springer was a fierce anti-Communist and supporter of Israel, and his papers were hostile to the student leftists of the 1960s and 1970s. The Red Army Faction bombed Axel Springer’s offices in Hamburg in 1972. In 1974, the Nobel Prize-winning novelist Heinrich Böll published “The Lost Honor of Katharina Blum,” about a woman whose life is ruined by an aggressive reporter for a Bild-like paper after she has an affair with a left-wing militant.

Bild’s politics are now center-right, but have grown sharp-edged under Mr. Reichelt, a former war correspondent. The tabloid initially welcomed Syrian refugees, then turned bitterly critical of immigration (though it is also hostile to the far-right AfD party). A Washington correspondent for Bild complained, in internal Slack messages that subsequently leaked, of a slant toward Donald Trump in the coverage of the 2020 U.S. presidential debates. The paper has also attacked the German government’s Covid restrictions and its main public health expert.

It seems the old battles have left Axel Springer forever on its guard against potential enemies. That quality can seem slightly out of place in 21st century Germany, where the company publishes not just Bild but also the broadsheet Die Welt, and is the owner of a lucrative classifieds business. When I visited Berlin this summer, Mr. Reichelt took me to a restaurant in his armored car.

“They have a bunker mentality,” said Moritz Tschermak, the author of a recent, critical book on Bild, “and at the moment the bunker mentality is quite strong.”

Mr. Springer, who died in 1985, also had a personal life that might be called colorful. His third wife had previously been married to his next-door neighbor. His fourth wife was the next-door neighbor’s second wife. His fifth wife, Friede Springer, had been the family’s nanny. When he left the company to her upon his death, she surprised her many doubters by emerging as a force in her own right. She is now the vice chairwoman of Axel Springer’s supervisory board.

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Mathias Döpfner, Axel Springer’s charismatic leader, moved more swiftly than most traditional publishers to embrace the internet.

Credit...

Pool photo by Bernd von Jutrczenka

Her longtime ally is Mr. Döpfner, a music scholar turned editor. He joined the company in 1994 and took over Die Welt in 1998. Ms. Springer made him the chief executive in 2002, after she had waged a successful legal battle against challenges to her leadership by others in the Springer family.

Mr. Döpfner, who once described himself as “a mixture of aesthete and carpet salesman,” is an enthusiastic deal-maker who stands 6-foot-7. Under his leadership, Axel Springer has had elaborate holiday parties, including a disco night in 2018 that included 10 D.J.s, 512 disco balls and a joint performance by the Village People and company board members. His dance moves at one party left an impression on the company’s slacks-wearing partners at Politico. He also owns one of Germany’s leading collections of female nude paintings.

Mr. Döpfner’s biggest impact has been in pushing the company online. In 2012, he dispatched members of the mostly male senior executive team to Silicon Valley, where they roomed together, made a study of the new media economy and produced a goofy video that showed them sharing king-size beds. The goal was to transform Axel Springer into a global giant able to solve the riddle of how to profit from digital journalism.

Early results were uneven, including investments in the recently troubled Ozy Media. Mr. Döpfner’s biggest quarry, The Financial Times, slipped through his fingers in 2015. Axel Springer consoled itself with the purchase of Business Insider, which has thrived under its ownership. And Mr. Döpfner made progress on a campaign to force Google and other tech giants to pay publishers for content.

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In 2019, the American private equity firm KKR bought more than 40 percent of the company and took it private, an endorsement of Mr. Döpfner’s strategy. In 2020, Axel Springer bought the newsletter company Morning Brew — and set its sights on Politico.

Last fall, Ms. Springer offered Mr. Döpfner a reward for his decades of service: $1.2 billion of Axel Springer stock. She then sold him a bit more, making him a billionaire and major shareholder. The shares came with the voting rights to her remaining stake, making it clear that the company is Mr. Döpfner’s now.

That is the backdrop for the dual dramas that consumed Axel Springer in 2021.

The first was the investigation into Mr. Reichelt, the editor who is also the face of a new television network Bild has started. Der Spiegel reported in March, under the headline “‘Screw, Promote, Fire,’” that Axel Springer had hired a law firm to investigate claims that Mr. Reichelt had created a hostile work environment for women; the publication did not report all the details of the claims. Der Spiegel described “the Reichelt system,” in which “the editor in chief was said to have invited female trainees and interns to dinner via Instagram. Young female employees were sometimes quickly promoted. Their fall from grace was similarly rapid.”

His leave of absence lasted all of 12 days. When Axel Springer announced that the investigation was over, it issued a statement saying that it had examined “accusations of abuse of power in connection with consensual relationships and drug consumption at the place of work. Contrary to rumors reported in several media titles, there were no accusations of sexual harassment, and the investigations did not discover any evidence whatsoever of sexual harassment or coercion.”

The statement went on to say that unspecified “mistakes” were outweighed by “the enormous strategic and structural changes as well as the journalistic achievements that have taken place under the management of Julian Reichelt.”

The statement included an apology: “What I blame myself for more than anything else is that I have hurt people I was in charge of,” Mr. Reichelt said. He returned to his post, but with a woman, Alexandra Würzbach, as Bild’s co-editor. She was given responsibility for personnel and the Sunday edition.

Axel Springer has sought to keep details of the investigation’s findings out of the German press. Mr. Reichelt sued Der Spiegel in March, and won a minor legal victory forcing the publication to append a statement to its article acknowledging that Mr. Reichelt said he had never received the questions sent to Axel Springer’s spokesperson.

In April 2018, the business newspaper Handelsblatt was prepared to report on alleged conflicts of interest in Mr. Reichelt’s relationship with a woman at a public relations agency, Der Spiegel reported this year. The article was killed after a call from Mr. Reichelt, a person involved in the process said. (A Handelsblatt spokeswoman did not respond to an emailed inquiry.)

This year, Juliane Löffler, a reporter at the German publisher Ippen, along with three other members of Ippen’s investigative team, worked on an investigation of Mr. Reichelt’s conduct in the hope of publishing an article with more details on what had taken place at Bild. In the course of reporting, Ms. Löffler and her colleagues gained access to some of the same documents that I reviewed in recent weeks, as the Ippen article was nearing its publication date. Then, on Friday, Ippen told its investigative unit that it was killing the story.

The directive came from Ippen’s largest shareholder, Dirk Ippen, according to correspondence from a company official that I obtained. Ms. Löffler and her fellow reporters objected, writing in a letter to company management that “no legal or editorial reasons were given” for stopping their reporting.

An Ippen spokesman, Johannes Lenz, said that Ippen had decided not to publish the story “to avoid the appearance of combining a journalistic publication with the economic interest of harming the competitor.”

The documents I saw paint a picture of a workplace culture that mixed sex, journalism and company cash. The trainee who gave testimony in the law firm’s inquiry said that when she was moved around the newsroom, another Bild editor told her he was tired of having to take on women with whom Mr. Reichelt had had relationships.

That editor did not respond to an inquiry for this column; the woman whose testimony appears in the investigation report declined to comment, and The New York Times is not naming her because the interview transcript includes her request for anonymity.

The woman also testified that when the expenses for the job she’d been placed in exceeded her salary, she complained to Mr. Reichelt, who authorized a special payment of 5,000 euros and “told her that she should never tell anyone.”

Axel Springer’s compliance department also received a complaint this year that Mr. Reichelt had provided a forged certificate showing that he was divorced to a woman who was working on contract with Axel Springer and with whom he was having a relationship. A copy of the phony divorce certificate was shared with me.

I did not have access to the complete report by the lawyers who investigated Axel Springer, and the company declined to provide it. Mr. Döpfner said in the emailed statement: “The culture at Bild was not up to our standards and does not reflect the broader culture at the company. To say that it does paints a false view of Axel Springer.”

He also said the Bild workplace culture would not be replicated in the United States. “We will not tolerate any behavior in our organizations worldwide that does not follow our very clear compliance policies. We aspire to be the best digital media company in the democratic world with the highest ethical standards and an inclusive, open culture,” he said.

Axel Springer forwarded a letter from lawyers stating that Bild was not legally obliged to fire Mr. Reichelt.

But a March 1 message from Mr. Döpfner to a friend with whom he later had a falling out over the way the company handled the allegations against Mr. Reichelt, Benjamin von Stuckrad-Barre, suggests that, while Mr. Döpfner was central to deciding how to act on the investigation’s findings as chief executive, he may not have been impartial. In the message, sent after Axel Springer had become aware of the allegations, but before the investigation was underway, Mr. Döpfner referred to an opinion column by Mr. Reichelt complaining about Covid restrictions.

Mr. Döpfner wrote that “we have to be especially careful” in the investigation, because Mr. Reichelt “is really the last and only journalist in Germany who is still courageously rebelling against the new GDR authoritarian state,” according to a copy of the message that I obtained. (The reference to GDR, or Communist East Germany, in this context, is a bit like “woke mob.”) Mr. Döpfner also wrote that Mr. Reichelt had “powerful enemies.”

Mr. Döpfner’s political statement in that message may seem at odds with his stated plans for his new American properties, which The Wall Street Journal reported last week, will “embody his vision of unbiased, nonpartisan reporting, versus activist journalism, which, he said, is enhancing societal polarization in the U.S. and elsewhere.”

As Axel Springer was struggling to contain the fallout from the Bild investigation, Mr. Döpfner’s focus was on Washington. This spring and summer, he conducted secret, parallel conversations with executives at two rival news organizations based in Washington, Politico and Axios, the site started in 2016 by Jim VandeHei, Mike Allen and Roy Schwartz, all formerly of Politico.

Mr. Döpfner’s goal was to buy both and combine them into a mighty competitor to the nation’s largest news outlets. The Politico acquisition, announced in August, was a triumph for his company. But behind the scenes, Axel Springer’s courting style had alienated its other target.

On July 29, Mr. VandeHei, the Axios chief executive, told his board of an unusual situation, according to two people at the meeting. Mr. Döpfner, he said, had floated the idea of installing Mr. VandeHei as the chief executive of the Politico-Axios combination. But Mr. Döpfner knew that Politico’s leadership team, still bitter over Mr. VandeHei’s departure to start a rival publication, would object. So Mr. Döpfner proposed that they keep the deal secret and announce it only after it was too late for Politico to withdraw, Mr. VandeHei told his board.

Mr. VandeHei told the board that he found Axel Springer’s approach “sneaky,” the two people said, and that it was “not how we do business here.” He pulled out of the deal, the people said.

My colleague Edmund Lee, who recently left the media beat for a management job at The Times, graciously shared his reporting with me on the Axios negotiations.

Mr. Döpfner, through a spokeswoman, flatly denied that account. “We were truthful and straightforward about our plans and intentions,” he said. “No lies and no deceptions.”