Abstract
This article provides a historical case study analysis of a press system in transition and the role of ownership therein. More specifically, the article looks at early battles over press ownership fought by West German publishing houses in socialist East Germany after the fall of the Berlin Wall. By means of early joint-venture agreements and financial investments, these publishers entered alliances with newspapers long before the latter were officially privatized by the Treuhandanstalt—a semi-public institution responsible for privatizing the entire economy of the German Democratic Republic (GDR). To make this point, the article first sketches some relevant theoretical concepts, then introduces the GDR press system, and finally shows how pre-emptive joint-venture deals became the key to privatizing an entire press system. By uncovering the underlying dynamics of media in transition, this article adds a historical current to the understanding of more recent transformations in media and communications.
Introduction
Much has been written about East Germany's post-socialist transition from a propaganda apparatus to a free, democratic press and media system (e.g. Haller et al., 1995). 1 Yet, there is no historical analysis of early economic shifts and privatization processes of the press or the role of ownership therein. For, while the press in the socialist German Democratic Republic (GDR) was party-owned, its subsequent transfer into the hands of a few West German media conglomerates has long been taken as an unfortunate yet necessary side-effect of a free press in transition (e.g. Schneider et al., 1991/1992; Schneider, 1992a). Likewise, the dominant role of West German publishing houses in privatizing newspapers in other Eastern European countries has long remained without scrutiny (i.e. Gulyás, 2000; Marinos, 2023).
Still, there are many questions yet to be answered: How and under what conditions was the press privatized? According to whose interests did this privatization take place, and what were the long-term consequences? These questions are important. Not only do they give insights into the political current behind massive transits of ownership and point to broader institutional, structural, political, and economic shifts that drove the privatization of entire economies. The underlying dynamics of media (systems) in transition can tell us much about current transition processes in media and communications. In the case of East Germany, media transformations that happened over 30 years ago—that is, of the press and press distribution (Tröger, 2019), broadcast media (Dietl, 2022), and book publishers (Links, 2016)—have lasting consequences for German media today (Mükke, 2021), including lacking representation and participation of East Germans (Foroutan et al., 2019).
This article focuses on issues of shifting press ownership in East Germany over 30 years ago. It does so through the perspective of the Treuhandanstalt (THA)—a trust and semi-public institution responsible for privatizing the entire East German economy. This initially included 8,500 enterprises with about four million employees in about 45,000 different facilities (i.e. Böick, 2015; Breuel and Burda, 2004). The THA became a manifestation of how “governments privatize” (Cassell, 2002), which, by October 1990, also included newspapers. The task of the THA was to restructure the East German press by means of privatization. The underlying assumption was that only a privately owned press was a truly free press, for only a privately owned press allowed for all competing voices to take their equal share on a free market of ideas that constitutes a viable democracy (i.e. Haller et al., 1995, Tröger, 2020b). Consequently, the THA successfully privatized most East German newspapers by 1991. However, while in 1989, media reformers had aimed to break up local newspaper monopolies of the former socialist state party, the Socialist Unity Party (SED), by 1992, structurally not much had changed: East Germany was still dominated by the same 14 local newspapers, “not for political reasons, of course, but for economic reasons” (Mahle, 1992: 13). Meanwhile, most of the 100 start-up newspapers that had flourished in the interim year of 1990 had folded due to press concentration and high market pressures (Schneider, 1992a). According to media researcher Beate Schneider (1992b), this stagnation of the market was the result of THA privatization practices. The THA had simply sold the massive newspapers that had formerly belonged to the SED to large West German publishing groups. Media historian Konrad Dussel (2004: 245) concludes that in doing so the “Treuhand had decided against any experiments.” It had simply transferred monopoly structures built under socialism into an expanding West German market. This article asks how much regulatory leeway the THA had in this process.
To answer this question, the article focuses on the year between the fall of the Berlin Wall on 9 November 1989 and German unification on 3 October 1990. This is because much of what happened in the regulatory grey zone of this transitional year set the tone for any future developments. Regarding press ownership this meant that all West German publishers aimed for a head start in a newly opening market, which, by May 1990, resulted in a “wave of mergers … so massive, unparalleled in international media history” (Mayer, 1990: 53). The article shows how these mergers created the material bases for all later ownership negotiations. In fact, it is fair to say that the German press market was unified long before Germany's political unification and that local monopoly newspapers were privatized long before their ownership was officially transferred by the THA. To make this point, this article documents—from the unique perspective of a press transitioning from socialism to a market economy—the expansive strategies of major West German market players into East Germany in a geopolitical vacuum. It then examines the ways in which the THA subsequently aimed to maneuver privatization processes, and it critically reflects on the political and economic powers that propelled these processes. To do so, the article first sketches some conceptual underpinnings that grasp more theoretical aspects of ownership shifts and their current-day equivalents. It then briefly introduces the GDR press system and finally shows not only how early battles of West German publishing groups over joint ventures became a driving force in transforming an entire press but also how these early alliances helped maintain monopoly structures still in place today.
This article is a work in progress. Its findings are based exclusively on primary or semi-primary sources drawn from several public and semi-public archives, including the Treuhand archives at the National Archives in Berlin, Germany. These files have been opened for research only recently; they are open to a select few. Therefore, all findings are groundwork analyses based on several types of sources: first, government, administrative and THA communication, memos, and other relevant legal documents. Second, newspaper articles in the East and West German press from 1989 until late 1992. Third, excerpts from personal documents, letters, and notes of key actors. This was added by 20 non-biographical interviews with East German politicians, media reformers, and journalists.
Ownership and infrastructures: Past and present
This article provides a historical case study on the role and transfer of ownership in the transition of the East German press over 30 years ago. However, it can rightly be claimed that the key drivers of this transition were distribution infrastructures; more specifically, the building of a press distribution system by four major West German publishing houses in early March 1990—only 4 months after the fall of the Berlin Wall. By means of early distribution control, these market leaders (Axel Springer, Gruner + Jahr, Bauer, and Burda) gained significant advantages in selling their own products in the GDR; they controlled distribution also for other West German publishers and left out East German newspapers entirely. The latter faced great disadvantages because they depended on the East German postal distribution system which was outdated, dysfunctional, and barely working (Tröger, 2019, 2021a).
In a way, these dynamics can be seen as historical precedents for what nowadays and with regard to digital communication has been described as “infrastructure capture” (Nechushtai, 2018) closely interlinked with aspects of market leaders “doing property” (i.e. van den Ecker et al., 2023). Whilst the former concept refers to “circumstances in which an overseeing institution (e.g. newspaper) becomes incapable of operating sustainably without the physical or digital resources provided by the organizations (e.g. publishers’ distribution cartel) it formally oversees” (Nechushtai, 2018: 1052), the latter challenges and expands established understandings of property. This means property is understood not only as a codified legal institution that guarantees exclusivity but also as an exercise of “salient strategies of selective openness” (van den Ecker et al., 2023: 1). Put differently, the exercising of property refers to controlling access and selective closure, and market leaders such as Google currently profit from network and lock-in effects. Thirty years ago, both concepts might have referred to the consolidation of corporate interests of major publishing houses, their exclusive control of press distribution and its core infrastructures, and the publishers’ openness to servicing a select few. Thus, it could be claimed that concepts such as “infrastructure capture” are not entirely new, but they are the center of the capitalist production of media and communications (i.e. Schiller, 2023). In consequence, it should be stressed that issues of distribution (may they be of press or digital products) are the core drivers in any structural transformations of media and communication.
It follows that over 30 years ago, press distribution infrastructures were the necessary precondition for West German publishing houses to expand market dynamics in East Germany that one-sidedly worked in their favor. This included, for instance, market leaders’ engagement in cut-throat price competition and their simultaneous battles over joint ventures with East German newspapers that were facing increased financial pressures. More specifically this meant that West German major publishing houses, such as Axel Springer or Bauer, aimed to win future readers by selling their products underpriced. This market scheme started in late March 1990 and was a money-losing business; its main purpose was to secure future market shares in the GDR (Tröger, 2019). Whilst this gave East Germans easy access to cheap Western press products (which had been a political imperative of the interim GDR government), it also disadvantaged all smaller and medium-sized West German publishers that could not afford to sell underprice. The scheme further proved disastrous for all start-up newspapers in the GDR, which had yet to find viable financial models. Most important for the scope of this article, these cut-throat market dynamics helped shift the focus of established newspapers (such as local newspapers of the SED) to enter into early alliances with strong West German financiers.
These early alliances helped set the material baseline for all subsequent ownership negotiations. In fact, if privatization is defined “as the transfer of ownership of state-owned organizations to private parties” (Radić et al., 2021: 1596; Savas, 1992), the case of SED local newspapers shows that privatization took place long before any such transfer of ownership. More precisely, and as will be shown in more detail below, newspapers were privatized by means of West German financial investments, pre-emptive joint-venture agreements with West German private enterprises, the employment of staff, and the provision of equipment through these financing private enterprises. Put differently, though East German newspapers were not “owned” by West German publishers until they were officially privatized by the THA, pre-emptive joint-venture agreements gave later ownership claims manifest material bases. In fact, when the THA officially privatized the majority of SED local newspapers in April 1991, THA officials would differentiate between the legal (official) ownership situation and the “actual situation” (tatsächliche Situation) of newspapers, which had been created by means of early material and immaterial alliances (e.g. Letter, 25.4.1991).
This is interesting also because these alliances were generally based on legal concepts of ownership that were codified according to the West German market economy; they had little to no linkage to the socialist political economy that factually still existed when these alliances were crafted. Thus, along with early joint-venture agreements came concepts of a free press that was privately owned, competitive, and financed by advertising, as opposed to a socialist press that was owned and financed by parties, non-competitive, centrally organized, and part of broader state resource allocations (e.g. paper) (Holzweißig, 1983; Tröger, 2020b). In other words, by means of early alliances with East German newspapers, West German publishing groups introduced, established, and often aimed to exploit legal concepts of ownership and property that were rooted in a Western market economy and free press model. This included concepts such as intellectual property (e.g. newspaper titles), what the THA called “immaterial property” (e.g. loyal subscribers), and material property (e.g. buildings owned by newspapers). It follows that early alliances were not simply pre-emptive strikes of private interests to secure future ownership shares, but they introduced the exclusive tendencies of private property to a press that was organized according to the exclusive tendencies of party property (e.g. privileged resource allocation to SED newspapers). Monopolization existed in both (Schneider et al., 1991/1992).
Early battles over a party press
Newspaper publishing in the GDR was highly concentrated. Daily and weekly press production was organized in conglomerates known as Associations of Organizationally Owned Companies (Vereinigungen Organisationseigener Betriebe (VOBs)) that generally belonged to individual parties and were financed by them. The most important one, VOB Zentrag, belonged to the state party SED. Ninety percent of all printing capacities and paper allocation went to Zentrag; 13 out of 15 printing plants were controlled by it. Via Zentrag, the SED held around 70% of all newspaper production in the GDR (i.e. a daily circulation of 6.5 million copies), which, in 1987, totaled 9.7 million copies per day. The SED newspapers included 14 massive local newspapers with circulations of 200,000 to 700,000 daily copies each (with the corresponding local editions for over 200 districts), the national newspaper Neues Deutschland (circulation: 1.2 million copies), and the various titles of the publishing house Berliner Verlag. Thus, the SED owned 16 out of 39 newspapers in the GDR (i.e. Tröger, 2019: 52 ff., Tröger, 2021a). Other newspapers belonged to three bloc party VOBs, such as VOB Aufwärts of the Liberal Democratic Party of Germany (Liberal-Demokratische Partei Deutschlands (LDPD)). They each had one national newspaper, such as Der Morgen of the LDPD. Their combined daily circulation, however, was just 800,000 copies (Deutsche Presse Agentur, 1990a: 3). This made SED newspapers monopolies with structural privileges in the allocation of resources, paper, and staff, and in particular, the local newspapers profited from these privileges during the early transition period (e.g. Schneider et al., 1991/1992).
To support the media transition, in March 1990, the newly elected interim government of the GDR created the Ministry of Media Policy (Ministerium für Medienpolitik (MfM)), and one of its priorities was to diversify press ownership. However, already in April 1990, its minister Gottfried Müller noted in his minister diary that West German publishing houses had become central agents in the GDR, partly by having entered joint-venture agreements with East German newspapers. The latter were struggling with a number of issues, such as prices and distribution (Müller, 1990). However, matters of ownership took priority. As one SED local newspaper wrote in a letter to Müller in April 1990, “currently the most pressing issue is” the newspaper's “transition … to a new form of ownership” (Ostthüringer Verlag, 17.4.1990, no. 238). This was because most newspapers found themselves in a sort of ownership limbo. By March 1990, they had claimed their political independence and had been turned into limited liability companies. However, none of the newspapers possessed a secure financial foundation (except for subscriptions), sufficient material resources (e.g. paper), alternative financial models and infrastructures (e.g. advertising systems), or a thorough legal foundation for maintaining any such enterprise. Most newspapers did not even have access to the addresses of their subscribers, as subscriptions in the GDR were handled by the Post (i.e. Tröger, 2021a), and none of the newspapers that had claimed independence had new legal owners. Whilst this inspired initiatives for alternative ownership models (such as employee shareholding at the Ostthürginer Verlag), in reality, all newspapers were in need of secure financial bases, material resources, and legally binding ownership models to compete in an increasingly cut-throat market of a soon unified Germany.
These realities worked in favor of major publishing houses (e.g. WAZ Group, Bauer) and also of smaller and medium-sized publishers (e.g. Morgenpost, Gong Verlag) from West Germany. All of them faced a highly saturated market in the Federal Republic (Dussel, 2004) and, as early as late November 1989, most searched for new opportunities in the GDR. Consequently, some inquired at East German political institutions but more often, West German publishers contacted East German newspapers directly. Generally, they proposed some sort of “close cooperation,” the “exchange of our newspapers” or “cooperative initiatives, whether the exchange of editorial staff […] or cooperation in production, advertising or distribution,” as did the West German publisher Morgenpost in a letter to the small LDPD local newspaper Norddeutsche Zeitung (NdZ) on 30 November 1989 (Morgenpost Verlag, 30.11.1989). The NdZ received at least five such inquiries between late November and 5 December 1989, only three weeks after the fall of the Berlin Wall. Most inquiries came from medium-sized West German publishers in geographic proximity, such as Hamburger Abendblatt, Landeszeitung Lüneburg, or Lübecker Nachrichten. This was a common pattern in border regions.
Thus, publishers from West Germany started to compete over new alliances in the GDR early on. Simultaneously, they soon put pressure on these new potential partners, for instance, by distributing their own (superior) products for free or very low prices in the GDR. For instance, the West German Lübecker Nachrichten, which had initially looked for “concrete talks [as] the basis for a possible cooperation” with the NdZ, only three months later started distributing a free special issue in the NdZ distribution area, advertising job openings for East German journalists (Lübecker Nachrichten, 27.11.1989). To keep its staff, the NdZ, like other LDPD newspapers, had to raise its wages whilst simultaneously decreasing all other expenses to keep the paper afloat. In May 1990, the NdZ eventually started cooperating with the Axel Springer-owned Hamburger Abendblatt.
For Axel Springer, this was part of a larger market entry. The media conglomerate closed cooperation agreements and joint-venture deals with various bloc party newspapers (especially those of the LDPD) and some former SED newspapers. Agreements entailed, for instance, the exchange of editorial staff and the supply of electronic equipment. In this way, already by May 1990, Axel Springer held a 30% market share in the GDR based on circulation numbers (Röper, 1990: 34). “By means of a strong involvement in the GDR,” stressed Chief Executive Officer Peter Tamm, Axel Springer's goal was to “secure its position as the leading press publisher and media corporation in Germany” (cited in Die Welt, 1990a). Tamm emphasized, however, that the aim was also to ensure “the competitiveness of East German newspapers” (cited in Deutsche Presse Agentur, 1990b) and to support East Germany's transition towards a free, democratic press. What followed was a “massive investment program” (Süddeutsche Zeitung, 1990); Axel Springer built alliances in the newspaper and magazine market, in radio and television. “You must think big here, no matter how the numbers look” (cited in Süddeutsche Zeitung, 1990), Tamm stressed. Other media corporations (e.g. Bauer, Burda, WAZ Group) took a similar approach. For instance, Burda announced in May 1990 that it was planning a long-term collaboration with the Australian media magnate Rupert Murdoch, and Axel Springer's Die Welt dedicated an entire page to the “spectacular deal” of “Burda making common cause with Murdoch in East Berlin” (Die Welt, 1990b). The project entailed a three-digit-million investment volume.
The MfM commonly learned of these deals from newspapers and press releases. In fact, negotiations were so intransparent that only those involved knew who was negotiating with whom. Eventually, the MfM issued three surveys between 15 May and 22 May 1990, alone. According to an earlier survey, all of the 23 most important local newspapers that had been contacted had some sort of alliance with a West German publisher. Eight were cooperating with Bauer, seven with Axel Springer (both had the strongest foothold in the GDR), followed by Bertelsman-owned Gruner + Jahr, and the WAZ Group, each with three such alliances (MfM, 1990a). “The negotiations have progressed to varying degrees,” the MfM (1990a) noted. A different survey listed these varying degrees: Axel Springer (and its affiliates) had cooperation talks, joint-venture agreements, or were interested in buying a total of 11 newspapers. Bauer had closed five joint-venture deals, and five additional ones were in the making. The WAZ Group planned on joint ventures with four newspapers, including the former SED local newspaper Leipziger Volkszeitung (LVZ) with a daily circulation of almost 500,000 copies (MfM, 1990b: 1–4). However, also smaller West German publishers, such as Gong Verlag or Seebald Verlag, were negotiating or had entered joint-venture agreements with 12 different newspapers and magazines. Even the Bavarian Farmers Association (Bayerischer Landwirtschaftsverband) aimed to enter the East German press market by cooperating with the farmers’ newspaper Bauern Echo with a daily circulation of 100,000 copies. Twenty-three other such alliances or joint-venture agreements of smaller and medium-sized West German publishers were listed, added by 15 weeklies and other periodicals, all of which were cooperating with West German publishers (pp. 4–10).
Thus, by May 1990, the East German press market was firmly divided amongst West German interest groups: 34 newspapers had West German partners and at least 38 were “start-up newspapers of West German publishers” (Röper, 1990: 34). Whilst most start-ups involved smaller and medium-sized West German publishers, the majority of joint-venture agreements involved larger publishing houses. In particular, Bauer, Axel Springer, Gruner + Jahr, WAZ Group, FAZ, and Madsack had “secured stakes in virtually all East German newspapers by July” (Deutsche Presse Agentur, 1990a: 2). At this point, no formerly party-owned East German newspaper (with the exception of Neues Deutschland) was without an alliance to a West German private partner. Consequently, by August 1990, any aim to enter the East German press market was considered “suicide” (BZ am Abend, 1990) given the claims of major players in the industry. This was two months before the German unification.
Still, despite these early joint-venture agreements and the subsequent market division, alliances remained “very diverse” and “in flux” (Röper, 1990: 34). They ranged from the acquisition and management of advertising to supporting production and distribution to material and technical assistance. “Predominantly,” the journalist wrote in May 1990, they also included “equity investments or preliminary agreements on such” (Röper, 1990: 34). Bauer, for instance, had secured equity investments with almost all of its East German partners whilst also providing technological support (e.g. supply of editorial technology and copy machines) and aiming at modernizing outdated printing plants. Axel Springer and its affiliates Hamburger Abendblatt and Berliner Morgenpost provided technical support but also handled the advertising logistics of their partners, which included the LDPD newspapers Der Morgen and the above-mentioned NdZ. This would later prove disastrous for Der Morgen. Not receiving sufficient advertising money to cover its expenses and with Axel Springer refraining from allocating additional resources, the award-winning paper folded in June 1991. Wulf Oehme, then editor at Der Morgen, commented that “such a fast ending was not foreseeable” given the newspaper's trajectory (Oehme, 25.01.2017). Despite Axel Springer's claim of wanting to secure the competitiveness of its East German partners, all of its LDPD newspapers closed within a year.
Privatizing a party press
Major West German publishing groups were particularly interested in local newspapers that had formerly belonged to the SED. According to the West German Frankfurter Rundschau (1990), this was because these newspapers had an “incredible concentration of subscriptions,” high circulation and sales numbers, and West German publishers soon “were all over them” (journalist, 1990b). The Leipzig-based LVZ, for instance, received a total of 17 cooperation or joint-venture offers by August 1990 (Deutsche Presse Agentur, 1990a). By then, all former SED local newspapers had entered pre-emptive deals with major West German publishing houses. LVZ chief editor Wolfgang Tiedke commented: “They are playing a perfect game of Monopoly, and we are nodding along as if we understood the game” (cited in journalist, 1990a: 23). In a similar vein, media minister Müller stressed in his minister's diary on 18 May 1990, that the “old SED monopoly of local newspapers” was colliding “with a new monopoly from the West” (Müller, 1990). In public, however, Müller urged that none of these alliances and joint-venture agreements were legally binding: neither had inquiries been made at the GDR Office of Competition Protection (Amt für Wettbewerbsschutz der DDR), nor was there any legal basis for publishers to sign anything more than statements of intent or “preliminary contracts” (von Ladiges, 1990). Any final decision regarding the transfer of ownership lay with the THA. Though this point was consistently stressed by East German authorities, nothing in the day-to-day economic practice or in the language used, either in newspaper coverage or in joint-venture agreements, gave any indication that these agreements were intent only. In fact, in June 1990, Bauer and other West German publishers declared that they soon expected the “conversion of declarations of intent into definitive contracts” (von Ladiges, 1990).
Thus, before the THA started its operation in October 1990, it consulted the GDR Office of Competition Protection and the MfM for “official and legally valid statements” (Amt für Wettbewerbsschutz der DDR, 1990) regarding any Western capital interests or shares in East German newspapers. With the exception of one, both offices responded, “there are no requests for foreign investments” (Amt für Wettbewerbsrecht der DDR, 1990). Also, only two East German newspapers had claimed foreign ownership shares, namely Der Morgen (a 49% share of Axel Springer), and Märkische Volksstimme in Potsdam (owned by Springer, Nordwest Zeitung Oldenburg, and the Springer affiliate Ullstein-Verlag). “Officially, there are no further notifications that affect the scope of antitrust investigations,” the office claimed (Amt für Wettbewerbsrecht der DDR, 1990). Based on this estimate, the THA commenced its work.
The THA board of directors stressed that one of its most urgent tasks was to privatize the former SED local newspapers. Thus, in December 1990, the THA put 10 out of 14 of these newspapers out for tender. Their total turnover in the second half of 1990 had been 400 million DM; their projected turnover for 1991 was 875 million DM (Treuhandanstalt, 1991, no. 235). Due to the “very large and constantly growing interest” in them and the “great complexity of the process” (Treuhandanstalt, 1991, no. 236), the THA hired the investment bank J. P. Morgan. Its representatives became central agents in the privatization of these newspapers, overlooking and administering every transaction. 2 In fact, based on archival research, it is almost impossible to tell apart J. P. Morgan representatives from the official THA staff as the former officially represented the THA. Thus, also with regard to any of the pre-emptive joint-venture deals, the THA followed J. P. Morgan's estimate that in “none of these cases” (J.P. Morgan, 1991, no. 324), the THA had granted its formal consent. “As far as we know at present, none of these contracts have any legally binding effect” (no. 324). In consequence, J. P. Morgan developed a line of action and a catalog of criteria according to which the newspapers were to be privatized (Treuhandanstalt, 1991, no. 236–237). Privatization referred exclusively to the sale of newspapers to West German interest groups.
Bidding lasted until mid-February 1991: the THA sent 114 inquiries, received 84 bids, held 78 “detailed discussions with bidders” and ended up with 37 final bids (J. P. Morgan, 1991, no. 328). Eventually, on 13 April 1991, the THA board of directors agreed to sell 10 newspapers with 8000 employees and a total circulation of 2.7 million copies to “chosen buyers” (Treuhandanstalt, 17.12.1991) – more specifically to twelve West German publishing houses. The overall price was 850 million DM and the investment volume was 1.3 billion DM. Though it was considered a “preliminary sale” (Bundesministerium des Innern, 6.5.1991), not finalized until after restitution claims had been assessed, the deal was done. The THA had privatized East German local monopoly newspapers by having divided them systematically amongst West German interest groups. The German Ministry of the Interior declared that with this “autonomous decision,” the THA had set “a significant course … for the development of a free press” (Bundesministerium des Innern, 6.5.1991) in East Germany. However, the THA had generally followed early alliances and joint-venture agreements.
Shortly after this official ownership transfer, the list of criteria was made public, according to which individual offers had been assessed and buyers selected. It included, for instance, the purchasing offer, the buyers' corporate status as well as their employment and investment plans. It also included the buyers’ other “involvements in the East German press [market]” (Treuhandanstalt, 1991, no. 236–237) and the services they had provided as potential joint-venture partners. These services related, for instance, to any previous transfer of know-how, support in administrative management and advertising, and financial commitments. Whilst the German Minister of Economics concluded that the THA had considered “the entire concept” (Möllemann, 14.5.1991) of individual bidders, the West German Association of the Local Press criticized that the THA had simply given a legal status to pre-emptive alliances that had been closed in the regulatory grey zone of 1990 (Verband der Lokalpresse, 12.5.1992: 2). The THA, on the other hand, stressed that privatizing the former SED local newspapers had been “extraordinarily difficult” (Treuhanddirektorat Dienstleistungen, n.d. (December 1992), no. 014) due to various interests on paper and manifest (material and immaterial) claims on the ground. Birgit Breuel (1992: 232), THA president after the passing of Detlef Rohwedder, added that “publishers knew their power.” According to her, major West German publishing houses had used their media outlets to put pressure on the THA.
In the end, the THA stressed that by having transferred the ownership of former SED local newspapers to affluent West German publishing houses, it had followed its political mandate to preserve the newspapers and their jobs. The THA mission had not been to guarantee press diversity by means of restructuring ownership (Tröger, 2019, 2020a). In retrospect, former media minister Müller noted that because the THA had not split up local monopoly newspapers, the East German press market remains divided among the same newspapers (Müller, 2017). Until this day, they are predominantly owned by West German publishing houses. The latter initially invested much to further strengthen the market positions of their respective partners, which increased local market pressures. “The victims,” Müller commented, “were smaller newspapers and, above all, the [start-up] local press, for which one would have wished a better fate” (Müller, 2017). Almost all start-up newspapers that had blossomed during the initial transition time folded again within a few years.
Conclusion
This article sketched post-socialist shifts of press ownership from party to private property in East Germany over 30 years ago. It did so through the perspective of the THA and showed that within its regulatory scope, the privatization of newspapers did not simply refer to the transfer of ownership into private hands; it exclusively referred to the sale of East German newspapers to (mainly) West German publishers. Alternative models of privatization or private ownership, independent from West German capital (i.e. employee shareholding), remained irrelevant.
Part of the reason for this narrow approach to privatizing an entire press were early (market) dynamics of an expanding West German political economy and almost immediate ownership claims of West German publishing groups (e.g. Axel Springer, Bauer). This meant that as early as November 1989, these groups employed various market strategies to get a head start in the GDR. With regard to press ownership, this meant that early alliances and pre-emptive joint-venture agreements, closed only months after the fall of the Berlin Wall, set the material baseline for all subsequent ownership negotiations. Thus, whilst most of the former SED local monopoly newspapers were sold by the THA in April 1991, these newspapers had been privatized long before this regulatory shift of ownership. West German financial investments, the employment of staff, and the provision of equipment through these financing private enterprises created manifest alliances that introduced the Western free press model to the GDR and gave later ownership claims material bases.
These findings challenge more established concepts of privatization (being the transfer of ownership of state-owned organizations to private parties) by giving impetus to the idea of “doing property”, which here refers to acts and strategies of exercising control. They also complicate celebratory notions of a post-socialist press transition towards a privately owned free press (see above). This article has shown that in the case of East Germany, monopoly structures built under centralist socialism were claimed, transferred, and continued in an expanding West German market, leaving little chance for a structural diversification of the press. Looking at current transformation processes in media and digital communications, one lesson to be learned is the long-term ramifications of early market penetration: Material realities (e.g. the control over distribution infrastructures, cooperative alliances, and ownership claims) established in regulatory grey zones, once in place, are hard to dismantle.
Over 30 years ago, West German publishers explored a new market and pushed legal boundaries in the GDR by closing pre-emptive ownership agreements. At the same time, the regulatory initiatives of the GDR government were ignored, whilst the federal government showed little interest in them (Tröger, 2019). Though the THA is often blamed for the one-sided market take-over of West German interest groups and the press concentration that followed press privatization, this article has shown that the THA had limited authority in the matter. First, because manifest claims gave little room for regulatory maneuvering. Second, because the THA's political mandate given by the federal government was not to ensure structural press diversity, but to push for fast privatization and to keep jobs. In this way, the massive shifts in press ownership must be seen as manifestations of broader political economic interests in the FRG. This holds even more true because, third, archival material shows that the THA did not have the institutional, personnel, and material resources to take on the job of privatizing an entire economy and to do so well. This is another lesson to be learned: to set regulatory boundaries, it requires political will and the respective institutions with sufficient resources.
The ownership shifts described in this article have had lasting consequences for the German media, including a local and national press that is still predominantly owned by West German conglomerates (Tröger, 2020a). Over the years, these groups have centralized local issues, editorial boards, and content production. They have outsourced newspaper printing and increased prices. They kept newspapers in a good enough state to keep loyal subscribers, but they missed reinvesting and are now lacking new readers in the digital market. Whilst this downfall of newspapers is by no means specific to East Germany (e.g. McChesney and Pickard, 2011), the transition over 30 years ago did offer alternative ownership and financing models, and it would be worthwhile to consider them again (Tröger, 2021b).
