Martin Jönsson: Bad trades and cuts made Mittmedia on the verge of bankruptcy

When Sweden's largest lokaltidningskoncern changes owners, it is the largest strukturaffären in the Swedish press since October 2005. Perhaps Bonnier and amedia's acquisition of the Mittmedia and with a greater event than the sale of the Centertidningar 2005, as it increases the concentration of ownership in the industry.

But economically it is a much smaller affair: compared with Bonnier's sale of the TV4 group to Telia, for 9.2 billion, is this more or less a free takeover. To buy newspaper companies in the last ten years, however, has not been about price, but about risk-taking. An owner must be able to manage an industry in structural decline - and at the same time invest in the digital transition.

The best example is when Amazon's Jeff Bezos in 2013, bought the venerable Washington Post, then in a deep economic crisis, in the context of the modest 250 million us dollars. Then he showered up significantly more than that to make the family-run dragon to a company that today is among the leading in the world in both technical and journalistic. And a profitable. Unlike many of the other newspapers in the united states, who only tried to rationalise itself to profitability.

, a crisis so deep that, according to the magazine media world means that the liquidity is so hollowed out that the company barely able to secure the future payment of the salaries of the 1,100 employees. The equity is in practice also non-existent. Therefore there was no choice but to transfer the ownership: the negotiations came only to trade on the conditions and the type of owner preferred.

in Addition to the question of what Bonnier's takeover means for the concentration of ownership in the industry and the local the future, it is therefore a question which is most important to answer today: how did we end up here? A lokaltidningsjätte, with verging on local and regional monopolies, is so badly wounded financially to some really bad annonsmånader was enough to nudge it towards the obeståndets abyss? All press groups in Sweden don't go bad, so why this company?

We have asked the question before, in connection with the Göteborgs-Posten's reconstruction in 2016 - where the taxpayer, the banks and the creditors rescued the company from inevitable bankruptcy. The answer is, ironically enough, is the same: the 13-year-old deal then Centertidningar sold in 2005.

What we do know today is that there are no guarantees for lokaltidningarnas survival

described as media-Sweden's most feltänkta ever. It was made during the full hubris: against all the structural trends, with a crazy purchase price, and with a debt burden that hacked giant holes in the new owners ' balance sheets. Among them were Mittmedia, which tried to solve it in the same way as the Rammer: with the bizarre goodwill values and the prestigious ambitions.

When reality struck, in the form of the financial crisis and a historic change of the advertising market - where about 600 million of the industry's ad revenue per year, have been going directly to Google and Facebook - there were not many outs left. Stampens reconstruction beating directly against the Mittmedia, which were not given back the millions they were owed.

For Mittmedia was the solution cuts and price increases, and reductions in the release and degradation of the distribution. Admittedly, in parallel with a big bet on the digital ad and production systems that streamlined the organization significantly, but it led nevertheless to a catastrophic negative spiral: the less unique journalistic material to which customers value highly, the more difficult it becomes to cope with a transition to high prices and new digital läsarintäkter.

the spiral and dare to invest in the journalism that the audience values the most important task for the new owners. What we do know today is that there are no guarantees for lokaltidningarnas survival: it was only a few months ago Laholms Newspaper was one in a line of closures in the local newspapers and in large parts of Sweden, it is the real situation such that the local journalists are at risk of exclusion when the next recession strikes. To a sky-high cost of democracy.

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