This analysis was first published in SvD Näringsliv, in Swedish, on February 7th, 2024. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

After the disastrous Viaplay investment, Schibsted is looking for a new strategy. There is plenty of capital — but in reality just one company worth buying.

The way companies express themselves often veers into parody. They talk about “challenges” and “strategic choices,” but everyone knows what they are really trying to say.

Consider this formulation from Schibsted’s latest quarterly report, released on Wednesday: “After a thorough evaluation of the merits of our options, and given the anticipated change in our corporate structure, we have taken the decision to wind down and exit our investment in Viaplay.”

A more direct way of saying the same thing would have been: “We made a very expensive and bad investment in Viaplay, and now we are giving up.” Because that is precisely what happened.

Norwegian media group Schibsted is in the process of being split in two — that is what the sentence about “corporate structure” refers to. One part remains listed — all marketplaces and financial services — and the other takes the news media and retains the Schibsted name. The news part becomes privately owned by the Norwegian Tinius Foundation, which is also the majority owner today.

There were several reasons to be wary of the Viaplay investment. It would not follow into the Tinius buyout — which would have been logical, given that it is a media company. And Schibsted was not part of Viaplay’s rescue plan when it was presented. So the holding would become heavily diluted when the other major shareholders injected new money.

Now we have it in black and white what came of all that. Schibsted invested 380 million kronor; the remaining value is around 13 million kronor. That means they lost approximately 2.5 million kronor — every single day — since the deal was announced last autumn. A remarkably poor investment.

In connection with the report, CEO Kristin Skogen Lund also announces her intention to resign. With the company being split up, she considers this a good moment for new leadership.

A different kind of Schibsted is emerging from the break-up. But the road here has been, to say the least, messy.

To understand it better, we need to look back at the last major Schibsted transformation.

In 2019, the company decided that several of its international marketplaces would be separately listed. Sites resembling Blocket in other countries — including Leboncoin in France and Segundamano in Mexico — were placed in a new company called Adevinta.

Schibsted had more marketplaces than those, however — Blocket and Norwegian Finn, for instance. Price comparison service Prisjakt and loan broker Lendo were also retained. All had more in common with the Adevinta companies than with the news operations. But the idea at the time was that geography would be the unifying factor. Schibsted was to become a Nordic company with many different businesses within it.

Now — with the split of Nordic Schibsted a reality — this creates a rather odd situation. Schibsted still owns part of Adevinta, and will shortly own a company (under a new name) housing all the Nordic marketplaces and services. Apart from geography, these companies do almost exactly the same thing, have partly the same owners, but sit as two separate entities. What exactly is the logic here?

To complicate matters further, a consortium including Permira and Blackstone last autumn bought 60 percent of Schibsted’s shares in Adevinta. In that deal, Schibsted sold shares worth 24 billion Norwegian kronor. It is partly this money that Tinius — as majority owner — will now use to buy out the news operations. But there is also capital left for new acquisitions. Which ones will be interesting to watch.

In the press release announcing the purchase of the Viaplay shares, CEO Kristin Skogen Lund said: “Viaplay’s strong position as a streaming provider in the Nordics is a very good fit for our media operations.”

Well, but if it is not Viaplay, there are not many others to choose from. With a strong cash position and a narrower focus on media, the list of conceivable targets is very short.

To Dagens Media, the incoming head of Schibsted’s media division, Siv Juvik Tveitnes, said: “If we are to remain relevant, particularly among younger audiences, we need to broaden our offering and invest more in both sport and entertainment.”

Streaming. Sport and entertainment. Billions in the account to invest outside the stock market.

Could it be that Viaplay was just the overture to the next major streaming bet? Trying to buy TV4 from Telia.

Note: Norwegian Schibsted owns, among other things, Svenska Dagbladet, Aftonbladet, and Blocket. The group is in the process of being split into two parts — one for media and one for marketplaces.