Bertelsmann’s Steady Profit

While the media has focused on the chances of its music publishing subsidiary buying EMI’s publishing interests, it seems Bertelsmann’s 2011 profits will likely be steady at worst.

BMG Rights Management, its joint venture with U.S. buyout firm Kohlberg Kravis Roberts, is reportedly scrapping it out with Sony Corp and its associates to get control of the world’s most successful catalogues.

As recently as June, BMG Rights was believed to be no more than hanging around the fringe of the auction, waiting to pick up any tasty scraps that the eventual buyer had to ditch for regulatory reasons.

The Gutersloh-based parent company, which also has publishers Gruner + Jahr and Random House as well as European TV broadcaster RTL Group, says operating profit for the first nine months has slipped by 1.1 percent to $1.4 billion.
Revenues from continuing operations were up 2.3 percent at $13.64 billion.

Although all divisions are credited with driving up the turnover, RTL Group – the parent company of “The X Factor” and ‘American Idol” co-producer Fremantle Media – did best with a 4.4 percent increase to $5.44 billion.

RTL’s earnings before interest, tax and amortisation grew by 4.6 percent to $956 million.

Bertelsmann says the overall profit drop isn’t down to the global financial situation or the perilous state of the euro zone as much as startup losses related to new businesses.