Media Companies as an Investment Opportunity
Guest lecture Norman Rentrop, University of Cologne, 12.1.2012
Media Companies as an Investment Opportunity
Norman Rentrop, founder/owner of the Verlag für die Deutsche Wirtschaft
and investor in n-tv, Sunday Business Post, yasni.de
o The publisher is entrepreneur and investor at the same time
- Advancing/laying out money in order to pre-finance intellectual works here
o Capital allocation as a task – Who is the best steward
o Investment criteria
- Do I understand the company, do I take joy in it, do I feel called
- What is the sustainably defensible competitive advantage
- Talent and integrity of the management – Does it love the money or the task
- Is it an attractive price
o School newspaper: write it down once, multiply it a thousandfold
- Encouragement by the head teacher
- The concept of the margin of safety (head teacher: no debts)
- “Free entrepreneur” or the theory of “optimal indebtedness”
o Advertising paper – Learning from defeats and crises
- Paying attention to the competition
- Decision whether to compete or withdraw / limit losses
- Test, test, test – Test everything and keep the good
o At the age of 18: founding of one’s own publishing house
- Successful role models
- Chance to acquire a licence from today’s Entrepreneur Magazine (strategy of innovative imitation)
- The magazine “Die Geschäftsidee” as the first work – Today 250 periodicals
- Testing advertising measures and rolling out the measures that bring the highest ROI (what gets measured usually also gets done)
- Additionally books, loose-leaf works, specialist information services
- today digital offerings, portals (experto.de), transaction services (CFX-Broker)
- Structural change
o What did I learn at the University of Cologne?
- Encouragement by Norbert Szyperski
- The value of planning – Preparing and thinking through
- Strategy question – how do I deploy my forces (concept of critical success factors)
- Profit centre system (How Bayer AG moved from a functional to a divisional organisational form, organisation chair Erwin Grochla)
- Being immune to hypes – Economic history (Friedrich-Wilhelm Henning)
- Personal liability of the entrepreneur as a constitutive principle of our social order and self-protection against taking on too many risks (Hans Willgerodt)
o Venture capital in start-ups in the media sector
- In publishing one invests in minds: recruitment at the university, entry as a working student, as a management board assistant, trainee – we train in order to take over, in order to find the publishing directors, managing directors, board members of tomorrow
- Venture capital in order to invest free cash flows outside the publishing house in other media
- invested in 18 companies (e.g. n-tv, Sunday Business Post, yasni.de)
- 1 star, 2 very good investments, 5 good investments, 10 times lost money
- overall increased capital (x 2.5), 16.5 % return per annum, thus worthwhile
o Value investing – Creating values out of values
- Investment stock corporation for long-term investors TGV, capital management company in Bonn with 47 family entrepreneurs
- Investments gladly also in media companies or media-related companies / online companies:
– Xing , Hamburg – Infas / Action Press, Bonn/Hamburg – Doccheck, Cologne – EquityStory. Munich – Gruppo Mutui Online, Milan – McGraw Hill Ryerson, Toronto – Press Index, Paris – Printing.com, Manchester
o Can the Richard Branson model of “Entrepreneurs in Residence” succeed in
Germany?
- Idea + management + capital = founding
- Venture capital: the founder has the idea + management, looks for capital
- Branson model: Branson has the idea + capital, looks for management
- Rentrop has 31 business ideas + capital, looks for founders
For topics for bachelor’s theses, master’s theses, applications as a working student, founder, entrepreneur in residence:
Büro Norman Rentrop Rüngsdorfer Str. 2e, 53173 Bonn, Tel. 0228 368840