Bertelsmann Going Public? Say It Isn't So, ...

Above: A detail screenshot from Bertelsmann's homepage.

The New York Post is reporting that "stodgy" – the Post's word, not mine – international media company Bertelsmann is making moves and giving signs that it could go at least partly public, after being run as a private company for 177 years.

Don't go toward the cliff, lemming.

Bertelsmann is still based in the German town of Gütersloh (current population less than 100,000) where it was founded as a Christian book publisher. Over the years, it grew into a mega-media company, owning everything from the producer of "American Idol" to broadcaster RTL to RTL Group (Europe's biggest production company) to iconic weekly German magazine Stern. Oh, it also owns Random House, its publishing arm Gruner + Jahr is the largest publishing house in Europe, and on and on.

Yet it keeps getting corporate chiefs who want to make radical changes, including going public, an option its controlling Mohn family members rejected a decade ago but which they apparently are considering now.

Bertelsmann, don't go public. You will get a cash infusion of money, yes, but you will lose control, even if, as the Post reports, you're taking legal steps to ensure continued control by the Mohn family. In a world of investors and funds that have absolutely no care in the world about a company's culture or history or anything but increasing quarterly dividends and stock prices, you'll be awash in shareholder lawsuits any time the stock drops. They will demand you drop slower-growth properties. They will tie the hands of your high-flying CEO. They will demand you strip out costs – er, investment, as real businesspeople call it – and throw money into dividends. That will make it actually more difficult to move into risky, developing markets, which is what the Post says is your goal.

Bertelsmann itself says in a press release that it's healthy. It reported a successful 2011 with "revenues of continuing operations rising 1.2 percent to €15.3 billion in the year under review (previous year: €15.1 billion). Organic growth was 1.7 percent. Operating EBIT reached €1.75 billion (previous year: €1.83 billion), remaining stable at a high level. The return on sales was 11.4 percent (previous year: 12.1 percent), once again demonstrating the profitability of the Group."

That doesn't sound like a sick patient to me, and it sounds like they've got money to make some riskier project launches, if that's what they want to do.

Wall Street is reportedly thrilled with the prospect of Bertelsmann becoming more, er, worldly, but one doesn't have to be anti-capitalist to think that a company is being lured into the alleyways so it can be taken for all its got. Bertelsmann the private company is a great symbol of capitalist success. Don't ruin it.