Shop Stewards

Der Spiegel’s employee-owners gave their boss the boot. Now they must prove they can revive the venerable German magazine.
May 29, 2008

Stefan Aust, the longtime editor of Germany’s leading newsweekly, Der Spiegel, was on a boat trip near the Indonesian island of Ambon when he learned that he was out of a job. Although Der Spiegel’s circulation numbers were good, many of its journalists thought there had been a decline in the quality of the magazine’s journalism. The nation’s elites no longer considered Der Spiegel an absolute must-read. Working there didn’t feel as glamorous as it used to. Besides, Aust wasn’t exactly an easygoing boss, and the newsroom had never entirely supported him. So the committee that represents Der Spiegel’s employees in shareholder meetings made use of its majority stake in the company, and canned him.

Aust’s ouster, which was announced in November 2007, and the drawn-out search for his successor, filled the pages of rival publications for months. The top job at Der Spiegel is easily the most challenging (and coveted) in German journalism—and that’s not only because of the quasi-socialist ownership model, a legacy from the 1970s when the owner, Rudolf Augstein, bequeathed half of the company’s shares to the staff. Launched by the Allies after World War II, Der Spiegel introduced U.S.-style investigative journalism to the fledgling democracy of the Bonn republic. For decades, the magazine dominated the competition, uncovering everything from illegal campaign financing to the Nazi pasts of government officials. Lately, though, the Hamburg-based magazine has struggled to maintain its preeminent position. Other publications have become more aggressive in their reporting. Internet news sites, including Der Spiegel’s own Spiegel Online, are attracting younger readers. In response, the magazine has broadened its coverage of nonpolitical issues, from crime stories to cultural events, and placed more emphasis on elegant writing. The hard-hitting political scoops that made Der Spiegel famous, meanwhile, have become rare.

Faced with this new reality, Der Spiegel’s staff decided to take control. It terminated the contracts of both Aust and managing director Karl Dietrich Seikel and replaced them with its own picks. Competitors gleefully predicted a descent into anarchy. “A mob of 800 people has driven out an accomplished and successful editor,” said Helmut Markwort, the editor of rival Focus magazine. For the moment, it’s unclear whether the critics are right. Can a bunch of journalists effectively manage a news operation as complex as Der Spiegel in the hypercompetitive and fluid age of digital media? No one at Der Spiegel—including the two journalists now in charge—is saying much about what happens next. But at a time when publications everywhere are chafing under the profit expectations of investors, Der Spiegel provides an alternative case study. The venerable magazine, which remains financially healthy, has a chance to strike a balance between the demands of great journalism and the new commercial and cultural realities.

Initially named Diese Woche, or “This Week,” Der Spiegel was launched in 1946 by an entrepreneurial English officer named John Chaloner who believed that post-Nazi Germany needed a free and fearless press. He hired a couple of young Germans and introduced them to Time and other English-language magazines. “They translated a few articles for us and said: Here’s how it’s done,” wrote Rudolph Augstein, who, at twenty-two, was one of Chaloner’s hires. But when the Germans started writing stories critical of their Allied administrators, Chaloner’s superiors lost their enthusiasm and handed control to Augstein and his team.

Augstein, who led Der Spiegel for more than fifty years, is an iconic figure in German journalism. Half a dozen biographies attest to his sharp, analytical mind and irreverent wit, as well as to his increasing ambivalence toward Der Spiegel. In his latter years, a reclusive and reluctant Augstein advised the newsroom by phone and fax from his Hamburg residence and various vacation spots. Although he sometimes said that the magazine had become too influential for its own good, Der Spiegel’s powerful brand of journalism was essentially his creation. “Augstein was an intellectual who enjoyed being disrespectful and questioning authority,” says Peter
Merseburger, one of his biographers, “and the magazine’s content and language reflected that.”

Before Der Spiegel, the centerpiece of German journalism had been the front-page editorial, a pseudo-academic treatise on current events. Augstein used human-interest angles to make political stories more digestible. He borrowed from U.S. publications to introduce the anecdotal lead and the kicker. A huge staff of librarians, as legendary in Germany as The New Yorker’s factcheckers are in the States, made sure that reporters backed up their stories with an abundance of supporting material.

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At the same time, Der Spiegel departed significantly from the U.S. model, using its reporting power for political ends and mixing hard facts with innuendo and scathing sarcasm. One favorite target was the conservative Bavarian politician Franz Josef Strauss, who became defense minister in the late 1950s and who aimed to turn Germany into a nuclear power. Der Spiegel went after Strauss relentlessly, combining diligent reporting with blatant fear-mongering. One cover story characterized Strauss as “amiable and engaging when he is in the mood to deploy his rustic Bavarian charm” and then asked ominously: “Is it necessary to add that the world has repeatedly been messed up by Germans who could be amiable when they felt like it?” Strauss, who was a bully, tried to take revenge on Der Spiegel. When a 1962 cover story detailed the weaknesses of West Germany’s military-defense strategy against a Soviet attack, the police ransacked the magazine’s headquarters and detained Augstein and six colleagues on charges of treason. Public protests, led by students and intellectuals, forced the government to release Augstein after 103 days in jail, thus solidifying the magazine’s reputation as a bulwark of press freedom.

The West German political establishment hated Der Spiegel, but couldn’t ignore it. Chancellors Konrad Adenauer and Willy Brandt, who differed on most things, both called the magazine “a filthy rag.” But Der Spiegel’s influence on the nation’s elites since then has been on the wane. A survey of 1,500 journalists, conducted by the University of Hamburg in 2005, showed that the magazine had been supplanted as the most influential news outlet, with 35 percent calling the Munich daily SĂĽddeutsche Zeitung their publication of reference and only 34 percent naming Der Spiegel. “Der Spiegel once dominated in German politics far more than, say, The New York Times did in the U.S.,” says Lutz Hachmeister, director of Berlin’s Institute for Media Policy. “Now it doesn’t anymore—and that’s very painful.”

Given how digital media have changed the informational power equation, of course, it may be impossible for a single outlet to dominate a news agenda the way some once did. But in Germany as in the U.S., the debate about how best to adapt to the editorial and commercial challenges of this new era is at full boil. And in Der Spiegel’s case, many of the magazine’s traditionalists blamed Aust for abandoning the best journalism in favor of a mass-market mentality.

On a January afternoon—one of his last days at work, as it turned out—Aust met me in his corner office on the eleventh floor of Der Spiegel’s office tower. The night before, a local paper had reported that the employee committee would pick Mathias MĂĽller von Blumencron, the editor of Spiegel Online, and Georg Mascolo, a Berlin-based Spiegel reporter, to succeed Aust. “These are good boys,” Aust said, keeping his cool. Both had worked under him for years, and he’d hired Mascolo as a cub reporter. Yet the circumstances of his firing clearly still rankled. “If I’d had to sack myself, I would have handled it differently—faster, more smoothly, and decently,” he said, referring to the fact that the committee had contacted potential successors without first informing him of his impending dismissal.

Aust is sixty-one years old, a short and wiry man who comes across as relentlessly confident though not exactly charismatic. Asked once on a talk show whether he was capable of self-criticism, Aust deadpanned: “Me? What an absurd idea. Haven’t you read the newspapers?” Aust’s critics call him a conformist, and they like to contrast his left-wing past with his more recent predilection for schmoozing with powerbrokers. In reality, though, Aust’s path from the student rebellion of the sixties to the political mainstream is somewhat typical of his generation, mirroring the careers of other public figures such as the former German cabinet members Joschka Fischer and Otto Schily. Like Fischer and Schily, Aust once moved in radical circles close to the Baader-Meinhof gang—an experience that came in handy when he wrote his best-selling book about the terrorist group. In the seventies, Aust joined public television and made his name as a thorough investigative reporter. Taking over Spiegel TV, the magazine’s cable-television program, in the late eighties, he witnessed firsthand how privatization changed the German media business. Suddenly, ratings mattered, and Aust adapted by supplementing political reporting with sex-and-crime stories that broadened
Spiegel TV’s appeal.

Augstein appreciated Aust’s can-do approach, and made him editor of Der Spiegel in 1994. At the time, the magazine was in a bind, its traditional dominance facing a severe threat. Newcomer Focus, a weekly with short articles and infographics, had taken Augstein by surprise, stealing a quarter of Der Spiegel’s ad pages. At the same time, larger forces were beginning to gnaw at the magazine’s considerable self-esteem. The end of the cold war had transformed Germany overnight, and Der Spiegel’s idiosyncratic mix of hard-nosed reporting and tendentious writing turned out to be less suited to the reunified nation than to the polarized and secretive world of the Bonn republic. With both the left and right moving toward the center, the general reader lost interest in the daily ins and outs of party politics.

Still worse, increased competition from other print publications, cable news, and the Internet cost Der Spiegel its near monopoly on political scoops. The emergence of the Web, coupled with the privatization of the television industry, created a more individualized and hedonistic culture of media consumption. Germany’s leading news site, interestingly, is Der Spiegel’s own Spiegel Online, which combines breathless 24/7 coverage, features from the print magazine, and elements of tabloid journalism. When New York governor Eliot Spitzer resigned over his links to a prostitution ring in March, Spiegel Online, characteristically, ran both a news story and a photo gallery of call-girl Ashley Alexandra DuprĂ©.

In response to these new realities, Aust changed the magazine more radically than any editor in Der Spiegel’s history. He introduced color photos and gave more room to softer issues. “Germany II,” the news department responsible for nonpolitical domestic news, soon was nicknamed “blue-light-and-red-light” for its focus on crime and scandal. Aust’s television background showed in his knack for covers that did well on newsstands. After a massive power failure hit the U.S. in 2003, he devised the headline AMERICA: WORLD POWER OUT OF POWER, and ordered a drawing of the Statue of Liberty holding a candle.

Aust also hired a number of award-winning journalists and encouraged them to depart from the magazine’s trademark acerbic and somewhat formulaic writing style, sometimes derided as SpiegelsoĂźe, or “Spiegel sauce.” The magazine’s new stars weren’t old-school muckrakers with years of beat experience, but skilled writers who knew how to turn any kind of story into stylish nonfiction. When the U.S. invaded Iraq in 2003, Aust sent Ullrich Fichtner, who had twice won Germany’s most prestigious journalism prize, the Egon Erwin Kisch Award. Fichtner duly added another Kisch, this one for his atmospheric reconstruction of the fall of Tikrit, Saddam Hussein’s hometown.

When it comes to reporting, Der Spiegel still has unrivaled firepower, and the sheer bulk of its research can seem overwhelming—as when sixteen reporters teamed up for a January cover story on young immigrants in Germany, dissecting an alleged increase in violence from historical, sociological, and political angles. But true big-impact stories have become few and far between, and the magazine’s journalists are increasingly expected to devote their considerable skills to lighter issues, such as the impact of French President Nicolas Sarkozy’s love life on French politics.

Even Aust’s critics admit that he had done an admirable job keeping circulation above one million—a key measure for mass-market advertisers. Sound finances have enabled Der Spiegel to do without the kind of radical cost-cutting that dried up the news budgets of other publications. In 2007, Der Spiegel Group, which also includes the business monthly Manager Magazin and the German edition of the Harvard Business Review, posted an operating profit of €57 million, the best in the company’s history. Jakob Augstein, the late publisher’s son who represents the Augstein family on the shareholder board and who backed Aust’s ouster, concedes that “readers simply have become less political. Der Spiegel had to make adjustments to maintain its economic strength and its public significance, and Aust was very successful in doing that.”

But, in some ways, Aust struck a Faustian bargain. Doing what he considered necessary to remain relevant, he sacrificed much of what made Der Spiegel unique. Long-serving reporters like to say, somewhat wistfully, that Der Spiegel is no longer “Spiegelesque.” One reporter, who asked to remain anonymous, says that “we once had a circulation of less than one million, and we lived fantastically well, too.” Franziska Augstein, Augstein’s daughter and a journalist at SĂĽddeutsche Zeitung, voiced her discontent more aggressively. “Der Spiegel has turned into one gossipy paper among many,” she said in an attention-grabbing speech at a Berlin conference for newspaper journalists in 2005, and she pointed the finger firmly at Aust: “The fish rots from the head.”

But blaming Aust exclusively for what happened to Der Spiegel over the past fifteen years is far too simplistic. Grievances over the loss of influence, the decline of investigative journalism, and the steady creep of infotainment are by no means unique to Der Spiegel. Journalists everywhere are anxious about the future of their profession. The one big difference is that Der Spiegel’s reporters had the ability to take matters into their own hands.

During the 1960s, a number of political activists joined Der Spiegel, tilting the magazine’s news coverage to the left and demanding a say in management. Augstein, a free spirit, was sympathetic, and in 1974, Der Spiegel created a holding company, to be owned by all members of the staff who had been with the magazine for at least three years. In the interest of long-term stability, Augstein also sold 25 percent of the company to Gruner + Jahr, the magazine-publishing subsidiary of Bertelsmann, and decided that his four children would inherit, in total, only 24.5 percent after his death—half a percent below the threshold required for veto power.

Initially, Der Spiegel’s employees rarely meddled in management. They were more than happy with a dividend that in good years increased most employees’ salaries by half. But when Augstein wanted to make Aust editor in 1994, a vast majority objected, arguing that the television journalist lacked the necessary print experience. Perhaps as important, they didn’t like what they had heard about his antagonistic management style at Spiegel TV. Seikel recalls that an exasperated Augstein talked about “throwing in the towel and opening a chip shop on [the North Frisian island of] Sylt.” Augstein’s threat to retire did the trick. The committee reluctantly agreed to Aust’s appointment.

It was only after Augstein died, in 2002, that the balance of power shifted gradually away from Der Spiegel’s top floors to the ground-floor canteen. There, in a garishly decorated pop-architecture landmark from the 1960s, hundreds of employees gather every twelve months for their annual meeting. In the soft orange glow of bosom-shaped lamps, they address complaints and concerns to the five representatives who are elected every three years. Spiegel journalists say the atmosphere is more like a union than a shareholder meeting. “We like to vote for people who aren’t powerful,” one longtime reporter told me. “Why should we boost someone who is high up in the Spiegel hierarchy anyway?”

Such self-interest, though, doesn’t necessarily produce good corporate governance. Once elected, Der Spiegel’s labor representatives must consider the long-term interests of the company. It’s a difficult proposition, as the employee-owners of Le Monde could attest. The French newspaper is unprofitable and saddled with debt, making it a ripe target for takeover by minority shareholders—a situation that Der Spiegel’s employee-owners must be mindful of as they go forward. Difficulties can arise especially when business strategy, journalistic ideals, and employee self-interest clash. In 2002, for instance, Spiegel’s management joined HypoVereinsbank AG and media companies Springer AG and Bauer AG in a bid to buy the troubled television group ProSieben. Staff representatives opposed the move, saying that financial ties with competitors and banks would undermine Der Spiegel’s journalistic independence. Reluctant to reinvest profits, they also argued that the financial stakes were too high—a judgment that proved short-sighted. In the end, ProSieben went for $1.3 billion to the California-based entrepreneur Haim Saban, who resold the firm three years later for about three times that amount.

The warts on Der Spiegel’s ownership model showed, too, when the staff dismissed Seikel, in 2006, and then Aust, last year. In both cases the committee simply started looking for successors, without communicating its intentions, and made a hash of the process. Committee members acted hastily and without coordination, more like rebellious subordinates, in fact, than managers. In May 2006, they picked Mario Frank, a manager with Gruner + Jahr, to replace Seikel. As the second-biggest shareholder, Gruner + Jahr has not played an active role in Der Spiegel’s management so far. But Frank’s surprise appointment sparked fears that he would strengthen the media giant’s position in the long term. The new manager did little to assuage those fears when he decided to buy 50 percent of the money-losing, German-language edition of the Financial Times—a move that would have been beneficial to Gruner + Jahr, which owns the other half. The employee committee promptly vetoed the decision.

In Aust’s case, his management style complicated matters further. While some reporters have raised legitimate questions about Der Spiegel’s journalism under Aust, at least as many had personal gripes that may have blurred their view of his overall record. According to a number of reporters interviewed for this article, Aust would often browbeat people who weren’t part of his inner circle and who didn’t share his views. “Aust energized the newsroom but he also spread fear,” says Dieter Wild, a former deputy editor who retired in 1999. “In the end, many people just wanted the committee to take revenge.”

Last summer, the committee finally did, getting rid of the man it never wanted in the first place. Mario Frank, the new manager, placed cold calls to potential successors, and the news quickly reached Aust in Indonesia. “Hold on to your seat,” his deputy, Joachim Preuss, told him over the phone. “They are looking for your replacement.” When Aust returned to the office, names of candidates were being leaked on a daily basis. In haste, the committee offered the job to Claus Kleber, a public-television anchor with no print experience. Several media organizations reported the appointment as a done deal. In the end, Kleber declined the offer.

Finally, in February, Der Spiegel announced the plan to replace Aust internally, with Mascolo and MĂĽller von Blumencron. The two are clearly intent on restoring calm to the newsroom, but they haven’t spoken publicly about their plans and declined my requests for an interview. In a telling note to readers, Der Spiegel conceded that, as a newsweekly, it “doesn’t like to be the subject of news itself—as it sometimes was in recent months. Now the new editors are on board, and a dose of self-criticism is in order: During the succession process and the dismissal of editor Stefan Aust, 61, Der Spiegel didn’t always act expertly. We could have done better.”

Staff members I spoke to say that, for the moment, sweeping changes are unlikely. “They’re under the same pressure as Aust to sell copies, you know,” says one reporter, and, indeed, one of their best-selling covers so far was headlined “The Perpetrators: How Germans Turned into Murderers”—an echo of the age-old Spiegel maxim that Nazi stories always work. But in a presentation to employees, Mascolo and MĂĽller von Blumencron stressed that they want to see feature writers and investigative reporters work in teams more often—an acknowledgment perhaps that Der Spiegel has of late overemphasized writing at the expense of reporting. They also said that print and online must work more closely together.

That sentiment reflects the editors’ respective rĂ©sumĂ©s. Mascolo, a political journalist with a talent for digging, is the choice for those who want a revival of Der Spiegel’s investigative culture. MĂĽller von Blumencron has overseen the rise of Spiegel Online, the splashy and successful Web site. The appointment of two editors suggests that no single candidate filled out the job profile, and that a balance had to be struck. “There were certain fears within Der Spiegel that the Internet would be boosted at the expense of the print edition,” says Armin Mahler, the current head of the employee committee. “We want a new-media sensibility, but we’d also like to see a revival of Der Spiegel’s traditional virtues.”

As for the magazine’s employee-owners, their handling of the succession process doesn’t inspire confidence in their leadership in times of crisis. Supervising up is tricky, and if things go awry again, Gruner + Jahr may be waiting in the wings to take over. But for now, Der Spiegel’s journalists are at the center of an experiment in whether socialized management can overcome self-interest and marry new and old—without losing too much of that special Spiegel sauce. 

Konstantin Richter is a freelance writer in Berlin. His first novel, Bettermann, was published in Germany in 2007.