Barely a year after its takeover by two “money makers,” the Sipa photo agency is now dealing with the turmoil created by the bankruptcy of several subsidiaries of the second largest German news agency, DAPD. While one of the shareholders is in hiding, 127 employees and tens of millions of photos hang in the balance.

In the early afternoon of Friday, November 9, 2012, the Sipa Press board of directors in Paris accepted the resignation of its President, Ulf Schmidt-Funke, and its Vice President, Katharina Doerk. They were appointed to their positions one year ago by Martin Vorderwülbecke of the media holding company DAPD.

These resignations occurred in the absence of both Vorderwülbecke and Peter Löw, the two principle players in the takeover of the famous agency founded by Göksin Sipahioglu, which is now owned by the company Sud Communication of the Pierre Fabre pharmaceutical group.

After the sudden bankruptcy proceedings for the DAPD agency on October 2, in Berlin, along with eight of its twenty-six subsidiaries, the whole profession was fearing for the futur of Sipa—everyone except its current operational managers, who thought they were safe. Officially, Sipa’s parent company, DAPD News Wire Service AG, was unaffected.

Last September, during the Visa pour l’Image festival, while Olivier Mégean, President of Holding SIPA, was busy announcing the launch of a photo and text newswire to compete with Agence France Presse (AFP), the coast looked clear.

Mégean was taken by surprise, along with the agency’s entire staff, by the announcement that Media Holding DAPD subsidiaries were being put into receivership. It must be remembered that Olivier Mégean and his deputy Erik Monjalous left AFP to join Sipa and take on an incredible challenge: to compete with the AFP, their former employer.

On Monday, November 12, at 4 P.M. in Paris, Mégean is scheduled to address the Sipa staff and explain why the shareholders are conspicuously absent, and outline a plan to secure funding for the agency in the short term. Today there are 127 employees to pay every month. More than thirty people have been hired recently by the agency on the Boulevard Murat.

Mégean reacted quickly to the news from Germany. He went to Munich on Friday, October 26, to meet with Peter Löw, who is now the sole shareholder of the DAPD group, Martin Voderwülbecke having resigned from (or relieved of) all his responsibilities on October 18.

The visit to Munich was hardly positive. Löw had nothing new to say about the future of Sipa, but harsh words about his former partner, Vorderwülbecke.

The Cavalry Charge of Two Money Makers

How did we get here? That’s the question being asked now by all media professionals. Despite the complexity of a portfolio with a vast number of subsidiaries , let us try and see things clearly by revisiting the events that led to the current situation.

In 2004, the liquidation of the news agency Deutscher Depeschendienst (DDP), which inherited the East German Allgemeiner Deutscher Nachrichtendienst (ADN), gave Peter Löw and Martin Vorderwülbecke the opportunity to enter the media market.

Until then, Löw and Vorderwülbecke were only known in Germany through their company BluO, which they co-founded in 2008 with Markus Zöllne. BluO International Restructuring is an investment fund that, “[seeks] to invest in an asset class that promises high returns and moderate risk.” [emphasis mine] They are based in the Grand Duchy of Luxembourg and operate from Munich.

Of these three men, Martin Vorderwülbecke was the most interested in the press, for reasons that seem to have little do with journalism or profitability. “A news agency cannot function if it must be profitable,” he said in 2011 after the takeover of Sipa Press. “A news agency does not make money. We are doing this to preserve the freedom of the press. In France, only big businesses and groups own newspapers, and we consider that a threat. The executives are too close to the establishment... And we believe that the press must remain independent.” Surprising words for an ultra-liberal Catholic venture capitalist.

In December 2009, BluO investors profited from the restructuring of the American agency Associated press after the 2008 crisis. They took over the agency’s German-language Associated Press Deutschland, with bureaus in Germany, Switzerland and Austria. The Austrian office closed shortly thereafter.

In September 2010, the merger of the agencies DDP and AP-Deutschland led to the creation of DAPD. A series of trials followed. One trial accused AFP of misusing financing by the French government for their work in the German market. Another involved the DPA, the largest German news agency, and its principal competitor, DAPD. Still another examined the market of German embassies and ministries... It would take too long to go into the details, but whether they were in the courtroom or the media, the directors—in particular Martin Vorderwülbecke—were highly aggressive. The same goes for their business sense, never hesitating to “cut prices” to establish themselves somewhere.

In July 2011, DAPD resumed Sipa’s activities. There were layoffs, restructuring and the launch of “the big idea”: make Sipa a direct competitor of the AFP by offering a text service in addition to their photos. Luckily, the French bureau of the Associated Press has been for sale for years. The negotiations are long.

In March 2012, DAPD took control of AP France, renaming it Sipa News, along with the company DioraNews (Sipa Média), which provides text to mobile telephone operators. With the arrival of several executives from the AFP and the hiring of journalists, Martin Vorderwülbecke’s project finally came into being: “We no longer want Sipa to deal only in pictures,” he said, “but to become a full news agency with text and photos, like the AFP. Currently, we’re finding an audience with the radio, television and the French regional press, but still not the national press.”

In mid-September, Löw and Vorderwülbecke gave a large party in Berlin for 300 guests of honor, including several German ministers—people who, after all, take a great interest in politics. “Two years ago, no one would have thought this possible , said Peter Löw to the guests. “We have a fully-functioning agency giving its competitors a run for their money.” Everyone was happy and proud. But it would not last.

The Cavalry Drowns in the Berezina

Tuesday, October 2, 2012, Reality Dashed Dreams

In Berlin, the two owners of the DAPD announced to their dumbfounded staff that they would no longer be able to put a million euros per month into the business, and that insolvency proceedings had begun in the Berlin-Charlottenburg courthouse for eight subsidiaries of the DAPD holding company.

The lawyer Wolf von Fecht from the firm Metzeler of Düsseldorf—the equivalent of a receiver—has until the end of November to find a solution to the financial problems of eight companies: Dapd nachrichtenagentur GmbH, Dapd nachrichten GmbH, Dapd Korrespondenz und Recherche GmbH, Dapd International Service GmbH, Dapd Sport GmbH, Dfd Foto Service GmbH, Dapd video GmbH and News and Medien Service Exklusiv GmbH.

In an exclusive interview given to the site Newsroom, Wolf von Fecht, said on October 10: “The search for investors is a clear objective, and we have the necessary freedom to reach potential clients.” He added that it remained possibility that Martin Vorderwülbecke and Peter Löw could be “completely removed” from the case.

Thursday, October 18, 2012, Farewell Vorderwülbecke!

“At the request of investors,” and to avoid “confusion,” the DAPD holding company changed its name to HQTA AG. Martin Vorderwülbecke was replaced by the Swiss Caspar Schilgen, the former Director of Development and the right-hand man to Peter Löw, who remained the sole shareholder.

The day after, HQTA AG placed an ad looking for an account and tax advisor—just before announcing the closure of its offices in French-speaking Switzerland. Seven journalists were fired. It was a bad omen for their French operations.

Sipa in the balance

A year and a half ago, when Vorderwülbecke and Löw took possession of the agency on the Boulevard Murat, with a fat check from Pierre Fabre happyto rid of it, photo world professionals were already skeptical.

They were still reeling from the collapse of the Eyedea group (Gamma, Rapho, Keystone) and the sudden bankruptcy of Corbis-Sygma. Both of those cases, incidentally, are not completely closed.

Today, with Newsweek putting an end to its print edition, the large French regional newspaper Sud-Ouest downsizing, and the future of Paris Match in question, the “air pocket” in which Sipa finds itself (to use Erik Monjalous’s description) is quite unsettling.

However, Sipa Press continues to distribute between seven and eight thousands photos per day, while Sipa News produces 300 wire stories per day for fifteen clients (those from AP-France) and twenty-eight other prospective clients—all more or less for free. This service (Martin Vorderwülbecke’s brilliant idea) represents an investment and is thus in need of financing, estimated by Sipa management to require three million euros to cover the next eighteen months. Who will pay the bill?

The three companies Sipa Press (60 employees), Sipa News (35 employees) and Sipa Media (15 employees) are overseen by the Sipa holding company presided over by Olivier Mégean, which is in turn owned my the parent company HQTA AG (formerly, DAPD Media Holding) where only Peter Löw remains, funded by the investment firm BluO. The trouble is that Löw “doesn’t know what to do” and in the Munich offices of BluO, “there’s no one left.”

Although officially HQTA AG has nothing to do with BluO, it is clear that this Luxembourg company is the cornerstone of this duo of “money makers.” And that might be the source of all these problems.

On the BluO website, a press release reads: “BluO Management is pleased to announce that on November 1, 2012, a restructuring of BluO 2 Holding SA began.”

Is it a restructuring of BluO, or a liquidation? A continuation of German investment or a withdrawal? Will HQTA AG be taken over by German television? Or someone else? A fog of uncertainty stretches from Hamburg and Munich to Berlin and the Boulevard Murat.

Many questions remain, but the most pressing of all is: who will sign the next paychecks?

Michel Puech