Haim Saban's short and sweet trip into TV broadcasting.

It was not exactly unexpected. Rumors have been spreading since early this year, but now it has actually happened. U.S. and Israeli investor, former TV producer and distributor Haim Saban, who just two years ago acquired a 50.5 percent common stock in the German commercial TV powerhouse ProSiebenSat.1 Media together with four investors (giving them 88 percent of its votes), has sold his stock to the German publishing house Axel Springer AG for 2.47 billion euro. Saban's investing group itself had only paid some 525 million euro for it in 2003.

Observers had expected Springer, which already held 11 percent in the TV conglomerate, to increase its stake to little over 50 percent. Much to the industry's surprise, the publisher took over with an overall maximum cost of 4.11 billion euro (including payment to Saban, plus the ProSieben debt, plus maximum payment to preferred stockholders).

Minority stockholders will not be forced out, but Springer intends to introduce its own line of preferred stock, which will be swapped with the ProSieben preferred stock, so ProSieben shareholders who do not want to sell their stock can become Springer share holders. Springer CEO Mathias Doepfner viewed the business transaction as a good deal. "We come in at a turning point in the [TV] market. Advertising revenues will be up again. It is perfect timing for such a deal," he said at the press conference in August announcing the transaction.

"The ProSieben group proved to be highly profitable in difficult times. Now the risk is very limited," he added. During 2004, a year with a shrinking advertising market, ProSieben earnings were up, to 134 million euro.

Doepfner is planning to merge ProSieben with Springer once the German antitrust watchdogs give their okay. The combined annual revenues of the two companies will add up to 4.4 billion euro--about one fourth of the annual revenues of Germany-based media conglomerate Bertelsmann. In Germany, revenues of these two media power houses will be roughly the same. Internationally, however, the gap between the two companies' revenues will remain substantial, because Springer is mainly a domestic enterprise. Still, the deal will boost Springer into the top 25 global media brands.

Saban, who once said he didn't intend to exit Germany quickly, will take some of the general stock in Springer, together with U.S. investing house Hellman & Friedman, which, in 2002, acquired a 19.4 percent stake in Springer directly. How big Saban's stake in Springer's general stock will actually be remains to be seen. "You have to ask Saban how big he wants it to be," Doepfner said. Only one thing is clear: Friede Springer, the widow of the publishing house's post-WWII founder Axel Springer, who directly and indirectly controls 60.1 percent of the company, will remain in control.

Antitrust and media authorities will ultimately have to decide whether they will authorize the deal, but Doepfner said he doesn't expect too many hurdles since some years ago authorities accepted Bertelsmann's bid to take over RTL Group, which created a similar integrated media conglomerate.

However, Ulf Boege, president of the German federal antitrust watchdog Bundeskartellamt, announced that he will take a very close look at the deal. The difference between the Bertelsmann and Prosieben deals, he said, is that Bertelsmann operations have been much more internationally diversified as a result of the merger, while the Springer businesses will remain concentrated in Germany after the merger. Also, the KEK, the country's regulatory center, part of Germany's multi-layered media regulatory system which focuses on social rather than economic issues, is uneasy about the publishing power that the new conglomerate will have, considering that Springer is a major player in TV program guides. More importantly, the company also owns the daily newspaper Bild, which sells some 2.4 million copies daily, and is the most influential newspaper in Germany. Together with the newly-acquired popular general interest channels, ProSieben and Sat. 1, and the news channel, n24, Springer could easily influence public opinion to an unfair degree. However, German legislation limits the steps the KEK can take, so nobody really expects anything to come from these concerns. Some observers expect that Springer may be forced to sell some of its minor assets, such as radio stations.

If the deal passes, it will be the latest post-mortem success for the publishing group's founder, Axel Springer, in his lifelong (and subsequently longer) feud with former TV giant Leo Kirch of Kirch Media. When commercial TV was launched in Germany in the mid-'80s, both companies worked together in founding Sat. 1. Soon after, Kirch secretly tried to take control of Springer's shares. Eventually he failed, and Springer remained a shareholder in Sat.1. Later, when Kirch merged his commercial TV assets--which included Sat. 1--into a holding (controlling about one third of the German TV market), Springer remained a minor shareholder.

At that time, rumors were circulating that Springer wanted to sell its Prosieben stake to Kirch when he wanted to merge the TV group with his media company. However, Kirch Media went bankrupt and Springer never got around to it. When Saban took over, Doepfner said he would wait for the right time to sell his company's stake in ProSieben at a good price. He left people speculating when he said: "We can do with or we can do without TV".