Listen:
MP3 One Segment
RealAudio
NB: This RealAudio stream contains FTRs 297 and 298 in sequence. Each is a 30-minute broadcast.
1. Beginning with a story about an award being given to Bertelsmann CEO Thomas Middelhoff, the program highlights some interesting aspects of German corporate control over the American media. “In a quiet watershed of Jewish philanthropy, the honoree at a UJA-Federation benefit dinner next month will be Thomas Middelhof, the chief executive of Bertelsmann, a German media conglomerate that published Nazi propaganda for Hitler’s army. Those who choose Mr. Middelhoff, to be honored at the Steven J. Ross dinner on May 15 stress that Mr. Middelhoff was born after the war and has investigated Bertelsmann’s past and made what reparations he could . . . . The $1,000-a-plate Ross dinner, at which Matthew Bronfman’s brother Edgar Bronfman Jr. was a previous honoree, attracts some of the most prominent corporate and media figures in New York. This year, Tom Brokaw, the NBC News anchor, will be the master of ceremonies and Stephen M. Case, the chairman of AOL Time Warner, will present the award . . . . Elie Wiesel, a writer and Holocaust survivor, will deliver the key-note speech. Last fall, random House, which is owned by Bertelsmann, pledged $1 million to the Holocaust Survivors’ Memoir Project, for which Mr. Wiesel is the honorary chairman. Mr. Wiesel is the honorary chairman. Mr. Wiesel said he agreed to speak because he trusted Mr. Middelhoff. ‘While it was in the end Random House that gave the money for the survivors’ memoirs, the agreement was with Bertelsmann, and it was Middelhoff who made the commitment,’ Mr. Wiesel said . . . . Not long after Mr. Middelhoff became chief executive in 1998, critical stories about Bertelsmann’s war history appeared in The Nation magazine and a Swiss magazine. Mr. Middelhoff then created an independent commission, headed by the historian Saul Friedlander, to look into the company’s past. In January 2000, the commission found that Bertelsmann had not opposed Hitler, as the company had previously claimed. Rather, it said, the company had ties to the Nazis, and was the largest supplier of reading material, including Nazi propaganda, to the German military. Three months later, Bertelsmann announced that it would contribute to the German fund to compensate workers used as slave labor in the Nazi era.” (“Past Collides With Closure as Jews Honor a German” by Tamar Lewin; New York Times; 4/30/2001; p. A18.)
2. The giving of this award to Middelhoff is ironic and grotesque in a number of different respects. (Much of the series on German corporate control over American media is devoted to Bertelsmann and there is an abundant amount of information on the firm in the other programs in this series.) The available evidence strongly suggests that Bertelsmann is part of the Bormann organization. (The economic and political component of a Third Reich gone underground, the Bormann organization controls corporate Germany and much of the rest of the world. It was created and run by Martin Bormann, the organizational genius who was the “the power behind the throne” in Nazi Germany. The Bormann group is a primary element of the analysis presented in the For the Record programs.)
3. Reviewing some of the salient aspects of the Bertelsmann firm, we highlight the grotesque quality to the granting of the award to Middelhoff. (“Bertelsmann’s Nazi Past” by Hersch Fischler and John Friedman; The Nation; 12/28/98; p. 1.)
4. “Issuing more than 20 million volumes, Bertelsmann was the largest supplier to the army and supplied the SS. When Bertelsmann applied after the war for a second publishing license, it was turned down by occupation authorities. [Bertelsmann patriarch Heinrich] Mohn had ‘forgotten’ to mention that he had been a ‘passive’ member of the SS, as well as a supporter of the Hitler Youth and a member of the prestigious National Socialist Flying Corps, according to de-Nazification files in the central state archive in Dusseldorf.” (“Bertelsmann’s Nazi Past” by Hersch Fischler and John Friedman; The Nation; 12/28/98; pp. 1–2.)
5. As indicated in the New York Times article cited above, when the information about the firm’s Nazi past was printed in The Nation, Middelhoff formed an “independent” commission to investigate it. One of the appointees to that commission was Dirk Bavendamm (Bertelsmann’s official historian), whose work and views call into question the degree of separation that the company has effected from its Third Reich heritage.
6. “His book Roosevelt’s Way to War (Roosevelt’s Weg zum Krieg) was published in 1983. Rewriting history, he stated that Roosevelt, not Hitler had caused World War II. He also wrote that American Jews controlled most of the media,’ and he claimed they gave a false picture of Hitler. Did the book impress [Heinrich’s son Reinhard] Mohn, then the majority shareholder of Bertelsmann? The firm hired Bavendamm as its house historian, and in 1984 he completed a historical study, 150 Years of Bertelsmann: The Founders and Their Time—with a foreword by Mohn. A year later, Bavendamm edited the firm’s official history, which set forth the untrue story that the firm had resisted the Nazis and had been closed down by them. Mohn also asked Bavendamm to write the authorized history of the Mohn family, published in 1986 under the title Bertelsmann, Mohn, Scippel: Three Families—One Company. In a second book, Roosevelt’s War (published in 1993, reissued in 1998), Bavendamm accuses the U.S. President of enacting a plan to start World War II. In the same book he suggests that Hitler’s threats in early 1939 against European Jewry were a reaction to Roosevelt’s strategy against Germany. After the revelations about Bertelsmann’s Nazi past appeared, the company announced that it had asked ‘the historian and publicist Dr. Dirk Bavendamm to look at the new information and begin to reinvestigate the role the publishing house played in those days’ and defended his work.” (“Bertelsmann’s Revisionist” by Hersch Fischler and John Friedman; The Nation; 11/8/99; p. 1.)
7. In that context, it is interesting to speculate about Bertelsmann’s motives in backing the survivors’ memoir and contributing to the fund to compensate victims of the Third Reich. (Public relations considerations are probably paramount in this regard.) It is also interesting to note that the Bormann organization, to which Bertelsmann appears to belong, wields considerable in Israel and within that country’s support network abroad. “Since the founding of Israel, the Federal Republic of Germany had paid out 85.3 billion marks, by the end of 1977, to survivors of the Holocaust. East Germany ignores any such liability. From South America, where payment must be made with subtlety, the Bormann organization has made a substantial contribution. It has drawn many of the brightest Jewish businessmen into a participatory role in the development of many of its corporations, and many of these Jews share their prosperity most generously with Israel. If their proposals are sound, they are even provided with a specially dispensed venture capital fund. I spoke with one Jewish businessman in Hartford, Connecticut. He had arrived there quite unknown several years before our conversation, but with Bormann money as his leverage. Today he is more than a millionaire, a quiet leader in the community with a certain share of his profits earmarked, as always, for his venture capital benefactors. This has taken place in many other instances across America and demonstrates how Bormann’s people operate in the contemporary commercial world, in contrast to the fanciful nonsense with which Nazis are described in so much ‘literature.’ So much emphasis is placed on select Jewish participation in Bormann companies that when Adolf Eichmann was seized and taken to Tel Aviv to stand trial, it produced a shock wave in the Jewish and German communities of Buenos Aires. Jewish leaders informed the Israeli authorities in no uncertain terms that this must never happen again because a repetition would permanently rupture relations with the Germans of Latin America, as well as with the Bormann organization, and cut off the flow of Jewish money to Israel. It never happened again, and the pursuit of Bormann quieted down at the request of these Jewish leaders. He is residing in an Argentine safe haven, protected by the most efficient German infrastructure in history, as well as by all those whose prosperity depends on his well-being. Personal invitation is the only way to reach him.” (Martin Bormann: Nazi in Exile; Paul Manning; Copyright 1981 [HC]; Lyle Stuart Inc.; ISBN 0–8184-0309–8; pp. 226–227.)
8. It is ironic to note that Holocaust survivor Wiesel lauds Random House for its support for the survivors’ memoir. Random House’s behavior vis-à-vis a book authored by a key witness in Holocaust revisionist David Irving’s unsuccessful libel suit against Deborah Lipstadt and her publisher suggests that Wiesel’s accolades are, at the very least, premature. “[Queens Counsel and Lipstadt attorney Anthony] Julius won because the professor of modern history at Cambridge had demolished Irving’s scholarship. Richard J. Evans went through Irving’s sources and produced an exhaustive 740-page analysis which detailed how Irving had twisted evidence in the Nazi interest. Irving had censored himself as well as the past by cutting references to death camps from his early work when it was reprinted. Evans has written a book on the affair—Lying about Hitler: History, Holocaust, and the David Irving Trial. You are free to buy it in America and read the professor’s account of the case and reflections on historical interpretation. I’ve no doubt it is a serious study. Evans is the author of In Defense of History, a patient critique of the wild subjectivity of postmodernist theory. You were meant to be free to read Lying about Hitler in Britain. But last week, Evans’ publishers, Heinemann, a branch of the Random House conglomerate, ordered that the book should be pulped. [Justice] Gray’s verdict, which came after years of collecting evidence and months of cross-examination in an enormously expensive trial, might as well never have happened. Heinemann said they did not dare publish because Irving was appealing against Gray’s ruling. In fact, Irving has been refused permission to appeal, and it is that decision he is contesting. In the very unlikely event of Irving winning and the Court of Appeal agreeing to consider Gray’s condemnation, the crushing evidence against him should deny him victory. Granta Books certainly think so and snapped up Lying about Hitler. Granta didn’t ‘see any terrible legal nightmares’ and was ‘very enthusiastic and keen to publish.’ We shall still be able to make up our own minds about Evans’ writing. If the story stopped there, the moral of the censorship of Evans would merely be that robust authors should think hard before signing a contract with Random House.” (“Without Prejudice: A Ploy Named Sue” by Nick Cohen; The Observer [London]; 3/18/2001.)
9. The views and work of Bertelsmann historian Bavendamm and the actions of Random House subsidiary Heinemann in pulping the Evans book should be compared with the Nazi tract Serpent’s Walk.
10. Mr. Emory has dealt with this book extensively. Mr. Emory believes that, like The Turner Diaries (also published by National Vanguard Books), the book is actually a blueprint for what is going to take place. It is a novel about a Nazi takeover of the United States in the middle of the 21st century. The book describes the Third Reich going underground, buying into the American media, and taking over the country. “It assumes that Hitler’s warrior elite—the SS—didn’t give up their struggle for a White world when they lost the Second World War. Instead their survivors went underground and adopted some of their tactics of their enemies: they began building their economic muscle and buying into the opinion-forming media. A century after the war they are ready to challenge the democrats and Jews for the hearts and minds of White Americans, who have begun to have their fill of government-enforced multi-culturalism and ‘equality.’ ” (From the back cover of Serpent’s Walk by “Randolph D. Calverhall;” Copyright 1991 [SC]; National Vanguard Books; 0–937944-05‑X.)
11. This process is described in more detail in a passage of text, consisting of a discussion between Wrench (a member of this Underground Reich) and a mercenary named Lessing. “The SS . . . what was left of it . . .had business objectives before and during World War II. When the war was lost they just kept on, but from other places: Bogota, Asuncion, Buenos Aires, Rio de Janeiro, Mexico City, Colombo, Damascus, Dacca . . . you name it. They realized that the world is heading towards a ‘corporacracy;’ five or ten international super-companies that will run everything worth running by the year 2100. Those super-corporations exist now, and they’re already dividing up the production and marketing of food, transport, steel and heavy industry, oil, the media, and other commodities. They’re already dividing up the production and marketing of food, transport, steel and heavy industry, oil, the media, and other commodities. They’re mostly conglomerates, with fingers in more than one pie . . . .We, the SS, have the say in four or five. We’ve been competing for the past sixty years or so, and we’re slowly gaining . . . . About ten years ago, we swung a merge, a takeover, and got voting control of a supercorp that runs a small but significant chunk of the American media. Not openly, not with bands and trumpets or swastikas flying, but quietly: one huge corporation cuddling up to another one and gently munching it up, like a great, gubbing amoeba. Since then we’ve been replacing executives, pushing somebody out here, bringing somebody else in there. We’ve swing program content around, too. Not much, but a little, so it won’t show. We’ve cut down on ‘nasty-Nazi’ movies . . . good guys in white hats and bad guys in black SS hats . . . lovable Jews versus fiendish Germans . . . and we have media psychologists, ad agencies, and behavior modification specialists working on image changes . . . . But all we ever hear about are the poor, innocent Jews and the awful ‘Holocaust,’ when, in fact, there never was an ‘extermination policy,’ a ‘Final Solution,’ or anything like it!” (Ibid.; pp. 42–43.)
12. The vision of the future presented in this book should appear sobering under the circumstances. In light of this vision, the actions of Random House (and Bertelsmann) subsidiary Heinemann in destroying the Evans book and the views and actions of official Bertelsmann historian Dirk Bavendamm, the award given to Middelhoff would appear to be less than appropriate.
Looking Back from 1984
[...] FTR #298: German corporate control over american media [...]
German publishing giant Axel Springer just gobbled up Business Insider and, according to the article below, despite the rather high price paid, Axel Springer’s appetite for more US media firms has yet to be sated:
“As for where the company is headed next, Keese said Axel has kicked the tires on a wide variety of media companies in the English-speaking world. They’re not necessarily thirsting for another, but they’re far from out of the game.”
So Axel Springer might be done with its current round of corporate feasting. Or not. It hasn’t decided yet. But if it does decide to make more inroads into foreign media markets, Axel Springer may find it has competition from the other German media giant with an appetite for foreign acquisitions, Bertelsmann. Although, since Bertelsmann appears to be trying to diversify away from publishing with its numerous purchases over the past year, competition with Axel Springer for foreign media firms may not be a problem:
“I would say we’re already a very broad company...But we want to become even broader.”
Broadening Bertelsmann through further acquisitions also probably won’t be a problem.
Read this article from the November 4, 2016 Dailey Mail (UK) “Mark Zuckerberg and Sheryl Sandberg are investigated by German prosecutors for ‘failing to remove racist posts that violate anti-hate speech laws’ from Facebook”
- The article is loaded with psychological inuendo The both the founder Marc Zuckerberg and his Chief Operating Officer are Jews an Americans who are the target in this article/investigation. This can subconciously cause a negative bias a liberal or anti ‑Nazi German Citizen.
The following excerpt is sadly comical when one considers that Bertelsmann is owned by the Underground Reich.
“They include what some might consider merely angry political rants but also clear examples of racist hate speech and calls to violence laced with references to Nazi-era genocide. Following a public outcry and pressure from German politicians, Facebook this year hired Arvato, a business services unit of Bertelsmann, to monitor and delete racist posts.”
One has to ask the question if the Nazi linked Facebook investor Peter Thiele had any influence on this selection.
http://www.dailymail.co.uk/news/article-3906588/German-prosecutors-investigate-Facebook-hate-postings.html
Mark Zuckerberg and Sheryl Sandberg are investigated by German prosecutors for ‘failing to remove racist posts that violate anti-hate speech laws’ from Facebook
German prosecutors are investigating Facebook founder Mark Zuckerburg over allegations that the site failed to remove racist posts.
Attorney Chan-jo Jun has filed a complaint to courts in Munich alleging the company broke national laws against hate speech and sedition.
Facebook’s rules forbid bullying, harassment and threatening language, but critics say it does not do enough to enforce them.
The site has also been accused of failing to staunch a tide of racist and threatening posts on the social network during an influx of migrants into Europe.
Prosecutors in Hamburg earlier this year rejected a similar complaint by Jun on the grounds that the regional court lacked jurisdiction because Facebook’s European operations are based in Ireland.
A spokesman for Jun’s legal team said: ‘There is a different view in Bavaria.
‘Upon Jun’s request, Bavarian Justice Minister Winfried Bausback said that Hamburg’s view was wrong and German law does indeed apply to some of the offences,’ it said.
Jun’s complaint named Facebook founder and chief executive Zuckerberg and nine other managers at the company, including Chief Operating Officer Sheryl Sandberg.
Facebook said it had not violated German law and was working on fighting hate speech online.
A spokesman said: ‘We are not commenting on the status of a possible investigation but we can say that the allegations lack merit and there has been no violation of German law by Facebook or its employees.’
Jun has compiled a list of 438 postings that were flagged as inappropriate but not deleted over the past year.
They include what some might consider merely angry political rants but also clear examples of racist hate speech and calls to violence laced with references to Nazi-era genocide.
Following a public outcry and pressure from German politicians, Facebook this year hired Arvato, a business services unit of Bertelsmann, to monitor and delete racist posts.
A rash of online abuse and violent attacks against newcomers to Germany accompanied the influx of hundreds of thousands of migrants last year, which led to a rise in the popularity of the anti-immigrant Alternative for Germany (AfD) party and has put pressure on Chancellor Angela Merkel.
There’s a pretty notable story in the publishing business emerging: German publishing giant Axel Springer is effectively taking itself private. The partner in this process of taking Axel Spring private is Kohlberg Kravis Roberts (KKR), which is going to buy out all of the minority shareholders at a 40% premium. This will leave just KKR and the main shareholders led by Axel Springer’s 76-year-old widow Friede Springer. Friede and CEO Mathias Doepfner control 45.4% between the two of them. Axel Springer’s grandchildren own another 9.8%, and the remaining 44.8% is free floating. It’s that 44.8% that KKR is going to buy out, but the stakes owned by the grandchildren could also be sold to KKR, potentially giving it a majority stake. As part of the deal, Friede would be guaranteed a say in company’s strategy even if KKR secures a majority stake.
As the following article notes, KKR also partnered with Bertelsmann in 2009 when they created a joint music venture. Bertelsmann bought out KKR’s share in 2013 (for a nice profit for KKR), so KKR has a recent history of partnering with German media giants. KKR has pledged to stay in this business with Axel Springer for at least 5 years. So it sounds like we might be seeing a similar strategy here, where KKR acts as the financial muscle for a new corporate strategy and if it works KKR will get to cash out with a hefty profit. It also suggests that Axel Springer will almost be entirely owned by its main shareholders if KKR ends up selling its shares back to them in five years.
As the article also notes, Axel Springer’s main shareholders are also planning on an acquisition spree. This is at the same time the company issued a profit warning. So at the same time Axel Springer is warning about its profits, it’s also partnering with KKR (which has very deep pockets) to buy up more media properties. Keep in mind this in taking place in the context of a industry meltdown across the digital publishing sector so there’s probably quite a few good deals available for an entity with deep pockets. And that appears to be the broader story here: one of the biggest publishers in the world appears to be getting ready to take part of the inevitable consolidation of the deeply troubled digital publishing industry and KKR is going to be financing it:
“The offer, made in concert with main shareholders led by founder Axel Springer’s 76-year-old widow Friede, would guarantee her a say over strategy even if KKR secures a majority stake.”
As we can see, KKR is being brought in a major partner, but this is being done in a way that appears to guarantee that ultimate control over Axel Springer remains in the hands of its primary shareholders who happen to be the Springer family and CEO Mathias Doepfner:
And the plans for this new partnership appear to revolve around building up Axel Springer’s digital classifieds, which earns the bulk of the company’s profits, and acquiring new companies, which is where KKR’s deep pockets could be very useful:
It’s all pretty big news for the digital publishing industry. It’s also worth noting one of the ironies here: Recall how Axel Springer has been the primary corporate force pushing the EU to implement policies designed to either reign in the power of the Silicon Valley giants like Google or Facebook at least extract some sort of payment from them (via a ‘link tax’ or something similar) that flows back to the digital publishing industry. Well, now that Axel Springer is shopping around for new digital acquisitions it’s hard to ignore the grim reality that the fire sale prices Axel Springer is probably going to be for these digital publishing companies is due largely to the devastating impact Google and Facebook have had on journalism’s business model:
“The last two decades have been perhaps the worst in American history for journalism. After years of decline, newsroom employment fell a further 23 percent from 2008–2017 — a trend which shows no sign of stopping.”
The worst two decades in US history for journalism. That’s the industry trend backdrop for Axel Springer’s acquisition plans. And the primary culprit for this sorry state of affairs is unambiguously the near-monopoly status over the digital advertising business achieved by Google and Facebook. Google alone almost made as much from news ads as the rest of the entire Americans news industry combined:
Even worse, it’s entirely possible that breaking up Google in order to separate the different components like DoubleClick and Adexchange that create this market stranglehold still might not really address the fundamental problem of having a monopoly running the digital advertising market. Why? Because the nature of the online ad business is such that there’s a very high fixed costs to get it set up but minimal costs for expanding and that’s a recipe for the creation of a natural monopoly. Some services, like delivering electricity of water to homes, are natural monopolies simply due to the physical requirements of provided those services. But in this case we have a natural monopoly due to market dynamics that make it effectively impossible for competitors to dethrone the existing industry leader. DoubleClick is still going to be dominating the online ad business and effectively strangling the journalism industry whether it’s a part of Google or not:
So that’s all going to be a major part of the industry context in Axel Springer’s upcoming acquisition spree: Google and Facebook have already starved the industry of revenues and that’s going to be mean a lot of bargains. Then there’s the fact that Facebook systematically lied to publishers during the 2016 campaign season about the number of viewers that were watching videos on Facebook, inflating the number of viewers by up to 900 percent according to a lawsuit. As a consequence of these inflated video viewership numbers, digital publications made the switch to producing video, which sucked resources away from traditional journalism, resulting in the layoffs of journalists. This lie was told by Facebook from July 2015 to June 2016, a pretty crucial period of time for journalism given the US election. And according to the lawsuit, internal documents show this was a lie Facebook was knowingly telling. So Facebook effectively lied the digital media industry into a business dead end a few years ago which is also part of the industry context of Axel Springer’s upcoming acquisition spree:
“Facebook egregiously overstated the success of videos posted to its social network for years, exaggerating the time spent watching them by as much as 900 percent, a new legal filing claims. Citing 80,000 pages of internal Facebook documents, aggrieved advertisers further allege that the company knew about the problem for at least a year and did nothing.”
Yep, Facebook was telling digital publishers that videos were getting 900 percent more viewers than they actually were and the company knowingly told this lie for at least a year. And not just any year. This was from July 2015 to June 2016, according ot the lawsuit, when digital publishers were going to be making huge investments in the upcoming election coverage. But Facebook began reporting enormous video-viewership numbers in 2014, so it sounds like the lie started at least by that point. So digital publishers did what Facebook advised and switched to creating videos. But the promised revenues never materialized:
This was an industry-wide phenomena which means it’s an industry-wide debacle based on Facebook’s lies. And as the article reminds us, at the same time Facebook lied the industry into this massive strategic mistake, Facebook was eating up more and more online advertising content much like Google:
As we can see, between Facebook and Google, the digital publishing industry has become a lot less stable an industry. And this trend appears to be going strong. The industry is only getting more distressed. It makes for a interest playing field for a company with Axel Springer’s size. Because it’s clear that the digital publishing industry is going to be facing a big shakeout and it’s going to be the giants like Axel Springer who obviously surivive that shakeout, but unless something is done to address the monopolistic power of Google and Facebook on the online ad business it’s still unclear what it’s going to take to end the dark times for publishing beyond simply having a large percent of the competition going out of business and leaving a few survivors. So Google and Facebook are basically driving the digital publishing industry into a period of distress and consolidation and right into the arms of giants like Axel Springer with the cash needed to pick up dying publications for cheap.
So while governments should definitely be looking into antitrust moves against Facebook and Google and investigate whether or not the online ad industry is effectively a natural monopoly that requires special regulations, keep in mind that Axel Springer is already the largest publisher in Europe and planning on buying up the competition Facebook and Google already crushed. It’s a reminder that the surviving media giants might need some antitrust investigations of their own after the upcoming period of industry consolidation that Google and Facebook made inevitable. Google and Facebook shouldn’t have a monopoly on generating antitrust concerns.