Axel Springer’s senior executives are on the verge of receiving substantial payouts as part of the planned breakup with buyout firm KKR. The preliminary agreement is approaching a group valuation of €13.6bn, which would trigger a generous payout for more than 100 top managers. This payout would be 8.6 times the amount they have invested in the business since 2021, according to sources familiar with the matter.
The valuation threshold has been referred to as the “magic number” by one insider. Under this planned deal, KKR will exit the media business valued at €3.5bn, while KKR and Canada Pension Plan Investment Board (CPPIB) will jointly control the classifieds business valued at €10bn. However, it should be noted that final terms have yet to be finalized.
In 2019, New York-based KKR purchased a minority stake in Axel Springer for €3bn, valuing the Berlin-based group led by billionaire CEO Mathias Döpfner at €6.8bn. By the end of 2022, KKR had valued the company at €9.4bn.
Insiders familiar with the scheme anticipate that senior staff could receive windfalls totaling at least €100mn—a significant sum rarely seen in traditional media sectors but reflective of private equity firms’ generous incentive packages for supported company managers.
However, these large payouts may provoke discontent among junior staff members—especially those in divisions that have experienced job losses and cutbacks in recent years—such as Bild, Axel Springer’s flagship tabloid newspaper.
Even if the breakup deal values Axel Springer below €13.6bn, top managers would still see their investments quadruple according to insiders.
Axel Springer spokesperson stated that CEO Mathias Döpfner and other executive board members would not receive their cash immediately due to different terms and a longer-term timeframe associated with their incentive scheme.
The planned breakup will allow Döpfner—who is also one of Axel Springer’s largest shareholders—to solidify control over various media assets including German newspapers Bild and Die Welt along with US news sites Politico and Business Insider.
