The family saga at Germany’s media colossus takes an unusual twist

The owner of Penguin Random House and BMG is returning to family management

This article has been kindly reproduced with permission from The Economist and was published on 19 June 2025.

It is common for family empires to eventually pass into the managerial hands of an outsider. Rarely does an heir later take back the reins. Yet that is precisely what is under way at Bertelsmann, a German media colossus. After more than 40 years of being run by a series of hired bosses, the company has signalled that one of two brothers descended from its founder will be its next leader. This is the latest surprising twist in a bizarre family saga.

Germany’s biggest media company traces its roots to Carl Bertelsmann, who in 1835 founded a publisher of religious literature in Gütersloh, a dozy town where the company’s headquarters remain. Thanks to a steady flow of acquisitions over several decades, Bertelsmann is now one of the most important media conglomerates in the world. Its businesses include Penguin Random House, a book-publishing behemoth, RTL, a pan-European television-and-radio broadcaster, and BMG, the world’s fourth-biggest record label after Universal, Sony and Warner, which boasts artists such as Kylie Minogue, Lenny Kravitz and Bruno Mars. It operates across 50 countries and employs around 75,000 people.

Bertelsmann is entirely owned by the Mohn clan, which descends from its founder, alongside various family foundations. But the last family member to run the business, Reinhard Mohn, retired in 1981. The company’s current boss, Thomas Rabe, took over in 2012.

Mr Rabe has been a steady hand. Amid the digital disruption that has gripped the media industry, the company’s top line has grown from €15bn ($21bn) in 2011 to €19bn last year, about in line with inflation. But its preferred measure of group profit has risen much faster, from €600m to €1bn, as Mr Rabe has taken steps to improve margins, including cutting costs. The company has also made various divestitures and acquisitions in that time. Most notably, it bought Penguin from Pearson, a British publisher, and merged it with Random House. Bertelsmann has significantly increased its exposure to America, too, which last year accounted for 27% of revenue, up from 14% in 2011.

Yet many of Mr Rabe’s recent efforts to further expand the company have been thwarted. An attempt to combine Penguin Random House with Simon & Schuster, another big book publisher, was blocked by an American court. Dutch antitrust authorities prevented a merger of RTL’s subsidiary in the country with Talpa, a local media company. Their French counterparts barred a merger of M6, RTL’s TV channel in France, with TF1, a competitor. After talks fell apart to combine Majorel, a call-centre business owned by Bertelsmann, with Sitel, a bigger rival, Mr Rabe sold the unit off.

Mr Rabe plans to step down by the end of next year. Christoph Mohn, a son of Reinhard and chairman of the board, is widely expected to choose either Carsten Coesfeld, who runs Bertelsmann’s private-equity arm, or his brother Thomas, who runs BMG.

Chart: The Economist

“It is surprising that it has come down to a choice between the two brothers,” says Thomas Schuler, who has written two books about the media empire. Partly that is because they are young: Carsten is 38 and Thomas is 35. But family history makes the choice even more unusual.

The Coesfeld brothers are the grandchildren of Reinhard Mohn and his first wife, Magdalene, with whom he had three children (see diagram). During that marriage, Reinhard conducted a clandestine affair which resulted in another three children, one of whom is Christoph. In 1982 Reinhard divorced his then wife and married his mistress, Liz, who remains an influential voice on Bertelsmann’s supervisory board. Unsurprisingly, the women were not on good terms.

As for the two boys, as Mr Rabe calls the Coesfeld brothers, it remains unclear who will take charge. Until last year Carsten, the first of them to join the management board, was the clear favourite. But the race appears to have tightened, with both brothers reportedly in contention. For now, the succession process is said not to have caused a rift. But plenty more family drama may be yet to come.