This analysis was first published in SvD Näringsliv, in Swedish, on September 14th, 2023. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

When Schibsted buys into Viaplay, they acquire power without having to take responsibility. That is the last thing Viaplay needs right now.

There are phrases that a company in crisis does not want to hear from newly arrived owners.

“We see this as a financial investment” is precisely one of them.

These were the words of Jann-Boje Meinecke, investor relations director at the Norwegian media group Schibsted — which owns both Svenska Dagbladet and Aftonbladet — after announcing that it now owns 10.1 percent of the shares in streaming company Viaplay.

Viaplay has had a tough year — to say the least. The share price has fallen almost 80 percent since January, and recent months have been marked by executive departures and a pervading sense of crisis. If you ever wanted to own Viaplay stock, this is therefore an opportune moment — it has never been cheaper than right now.

Even Schibsted’s own share price fell on the news, and by considerably more than the cost of the Viaplay shares themselves.

The stock market, then, was not exactly jubilant.

The question is whether Schibsted really intends to hold the stock for the long term.

Through a clever arrangement involving banks, the company managed to avoid notifying the stock market when it crossed the 5 percent ownership threshold. Instead, the announcement only came when they crossed the 10 percent barrier — by a small but very significant margin. The total holding is 10.1 percent.

Consider the following scenario: if someone were to make a bid for all of Viaplay, they could force out the remaining shareholders — provided they had reached 90 percent of shares. Now that Schibsted holds 10.1 percent, that kind of deal cannot be done without them on board. French television company Canal Plus already owns around 12 percent.

Taking Viaplay off the stock market in a quick deal suddenly became substantially more complicated — and probably more expensive. Calling this a “financial investment” for Schibsted can therefore be read in that light: any new owner must now negotiate with them directly.

The bigger question, however, is who would even want to make such a deal.

Whatever the share price, Viaplay’s problems have been building for a long time. Slowing streaming growth, increased competition from international players such as Netflix and HBO, expensive sports rights, and high interest rates have all contributed to squeezing the company. Being a Nordic streaming company with international ambitions has proven to be a very difficult strategy to execute.

Telia, which owns TV4 and C More, has also signalled in various ways that its TV business is likely up for sale. The outgoing CEO Allison Kirkby previously worked at Danish telecom giant TDC, where she fully separated the content business from the technology side. “Content is hard,” was how she described it at the time.

On the subject of TV4, Kirkby has said that “media should not be owned by operators.”

The problem is much the same there. TV4 appears to be for sale. But who are the potential buyers? Who looks at the media landscape today and concludes that Nordic streaming companies are what they want?

Schibsted’s move suggests they believe there are buyers out there. They do not need to be one themselves, despite the sizeable new stake.

Of course, Schibsted may have interest in specific individual assets, if that kind of solution is on the table.

“We hope we can support the company in creating value, and in further developing its strategy going forward. Whether that leads to us joining the board, we shall see,” Meinecke told Dagens Media.

Having multiple large shareholders who can block structural transactions, and who are not necessarily willing to roll up their sleeves on the board to address the company’s problems — is a nightmare scenario for Viaplay. All the underlying problems remain. But now there is an ownership problem on top of them.

Footnote: Svenska Dagbladet is owned by Schibsted. Journalists at SvD may own shares in Schibsted through the group’s employee share programme.