Article by Rolv Erik Ryssdal, CEO, Schibsted Media Group, printed in Dagens Næringsliv 10. March 2011
Today’s extraordinary general meeting in Media Norge will discuss the merger offer made by Schibsted Media Group. At Schibsted Media Group we have strong faith in the future of Media Norge’s solid media houses and Finn.no – these represent our core businesses. I believe that this is a merger that is right and important, one that will strengthen both Schibsted Media Group and Media Norge in a time of radical changes within our industry.
Financing important journalism
It is obvious to everyone that comprehensive structural transitions from print to digital platforms are taking place in the newspaper industry. These have proven challenging for us. Not because we have fewer readers reading our news – on the contrary – but because our traditional revenue models from single-copy and subscription sales are under pressure. We are in the process of adapting to a digital world in which few know for sure how revenues from users will be generated, and in turn how vital, important and costly journalism should be financed.
In a time of massive and rapid change, Schibsted Media Group and Media Norge have managed to develop strong print newspapers with full editorial freedom. We have become better – not by resisting change but rather by being at the forefront in the new channels. And a full merger between Schibsted and Media Norge would make us better placed to consolidate this.
We would be far better placed to facilitate common digital investments that would be too great for our companies to undertake individually, such as development work on iPad editions. It is also important that we systemize ways of learning from each other's successes and mistakes in the digital landscape. These are ways in which the proposed merger – if adopted – would make us stronger and better place for the future.
Schibsted Media Group today owns approximately 85% of Media Norge. This company’s model for corporate governance and publishing integrity corresponds to the model adopted by Schibsted in its other businesses and which in our view is one of the success stories in the modernization of the Norwegian daily press. A merger is not meant to change the way in which Media Norge is operated; the company’s subsidiaries will maintain the same management, administration, operational independence and organization as they have today.
Publishing considerations are broadly and deeply entrenched at Schibsted. As Tinius Nagell-Erichsen once said: “It is not the case that diversity dies with Schibsted as owner: at Schibsted we embrace diversity.” And so it continues to be.
We think we have made a good and fair offer to the shareholders in Media Norge which should be financially attractive for all parties.
The media houses Aftenposten, Bergens Tidende, Adresseavisen, Stavanger Aftenblad and Fædrelandsvennen all have long and proud traditions, but the umbrella organization Media Norge was not in place until as recently as 2009. As was hoped at the time it was established, this model has shown that we are able to combine full editorial freedom and integrity, local entrenchment of publishing values and financially rational business operations.
And we must continue to seek out ongoing improvements and working methods in our media houses. The circulation figures for all of Schibsted Media Group’s biggest Norwegian newspapers fell in 2010. Given this situation, we cannot devote resources to continuing to strengthen our editorial products in any other way than by consolidating the coordination of common functions and jointly investing in technical and digital advances. This will contribute to better newspapers and more secure jobs.
If we do not merge, this value creation will not come about, and that will represent a loss that will undermine our position when facing a future that will change even more than it has in the past few decades. It is my belief that those media who fail to look for these solutions will experience problems in the long run.
Right for the future
In the wake of the turmoil caused by the financial crisis, it has become apparent to us that it would benefit both Schibsted shareholders and Media Norge shareholders if ownership were consolidated into one listed share rather than two.
This is also about maintaining national competitiveness in an international world, where large portions of Norwegian news production is in the hands of foreign owners.
No Norwegian media group would be better placed to meet future media challenges than a merged Media Norge and Schibsted Media Group. That is why this merger is right for the future.