This analysis was first published in SvD Näringsliv, in Swedish, on December 11th, 2023. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

After years of disappointing shareholders, Schibsted’s news operations are to be delisted. What was once a sideline — the marketplaces — has now taken over the company entirely.

In 1948, Swedish entertainer Karl Gerhard sang a cheerful little melody with the line: “We make up on the swings what we lose on the roundabout.” He could barely have known that this simple phrase would come to sum up the Nordic media market many decades later. The Nordic newspapers have been the roundabout — partially financed for the past 20 years by a range of other businesses.

For Norwegian media group Schibsted, that era comes to an end with Monday’s announcement. Schibsted’s majority owner, the Tinius Foundation, intends to buy out all the news media from the stock exchange and hold them privately instead. Among them are Aftonbladet and Svenska Dagbladet in Sweden, and VG and Aftenposten in Norway. What remains listed will be the marketplaces and financial services — including Blocket, Prisjakt, and Lendo. The deal is conditional on shareholder approval.

The split can be seen as a consequence of how the market has viewed Schibsted in recent years. With their wallets, investors have clearly voted for marketplaces and against news media. In practice, the media operations have acted as a drag on Schibsted’s share price. The market’s reaction to Monday’s announcement was immediate — Schibsted’s stock rose sharply.

The market’s appetite for marketplaces has created a kind of involuntary identity shift for Schibsted as a whole. And it has now reached a point where the company has to do something about it.

To understand this change, we need to go back a few years.

In 2007, Schibsted bought all shares in Blocket.se. Industry publications wrote — characteristically for the time — that “the classified ad market is being consolidated.” What we today call marketplaces were then known as “classifieds” — a digital version of the small ads that used to appear after the text in daily newspapers.

In the early days, the highly profitable marketplaces were seen as a natural match with the newspapers. Aftonbladet was one of Sweden’s most visited websites and could channel its traffic to Blocket. The swings and roundabouts seemed to fit well together.

Meanwhile, internationalisation began. If Schibsted had done so well in Sweden and Norway, couldn’t the same be done elsewhere? It could. Blocket-style sites were created in countries across the world. Schibsted went from a relatively small Nordic media player to one of the world’s three largest owners of marketplace platforms.

By 2018, the international marketplace operations had grown large enough to require separation into a new company, Adevinta. And in November this year, Schibsted sold 60 percent of Adevinta for around 23 billion kronor. It is that money the Tinius Foundation can now use to buy out all the news media.

Foundation ownership of media companies is not unusual in the world. In the UK, Scott Trust Limited owns The Guardian — its purpose being to enable The Guardian to continue its journalism. The parallel with the Tinius Foundation is easy to draw. You need only look at who chairs both: Norwegian Ole Jacob Sunde appears on both boards.

What happens to journalism when it is freed from the demands of the stock market? One possibility that opens up is more ambitious investments than before. Because the market has reacted negatively to the weak profitability of news media, it has constrained the scope for building them into something larger. Schibsted’s purchase of the Viaplay stake in September caused the share price to fall immediately. That has made it hard to justify initiatives in the media sector.

That problem is now solved under the new model. However, the foundation will still need to ensure that the newspapers do not lose too much money. Resources exist — but they are not infinite.

The question is whether a new, journalism-focused owner will make the investments needed to keep the media relevant going forward. That remains to be seen. The greatest risk in the transition is losing momentum and becoming too comfortable with the status quo. At a time when AI development is moving fast and creating an uncertain environment for media companies, you need owners who know what they want — and dare to act on it.

Being free from the market’s low expectations for the sector is probably also welcome internally. Innovation has happened within Schibsted before, even if it primarily resulted in the adjacent services now being separated off. But now the excuses for not doing deals and making investments in media are gone. When you are free to do what you want — what happens then? There is a great deal for the new owners, Tinius, to live up to.

Note: Svenska Dagbladet is owned by Schibsted.