Decision by Schibsted to exit Baltic media business brought a year and a half of insecurity upon Eesti Meedia and Postimees, future wise. Now that the company has been purchased by its management, the media group stays in one piece and may keep pursuing mission-minded journalism. According to head and an owner of Eesti Meedia, Mart Kadastik, the current solution is the best the company could have hoped for.
When did Schibsted decide to exit the Baltics?
The decision to exit was basically made in June, 2012. Regrettably, uncertainty and indecisiveness prevailed too long after that.
Why did Schibsted decide to leave Estonia?
Over the past years, advertisement business has emerged as a clear priority for Schibsted. According to stock market analysts, ads biz would be over 80 per cent of Schibsted’s value.
And, with even the dignified Scandinavian newspapers assessed lowly by stock exchange, journalism business outside of the wealthy domestic markets had become marginal both for Schibsted’s shareholders and the group’s management. In other words: the honest answer would be they lost interest. And, in Estonia’s case, our smallness played a key role.
For all these years, Eesti Meedia has made a profit. Was that not enough?
No. Ads business provides for more money with smaller risks and costs. Even Schibsted has limits to its resources. Financially, but also time wise.
The Schibsted leadership reckoned that ad business would need their total dedication, to the degree that Eesti Meedia was in danger to be neglected by owners. Which we indeed felt, over the past years.
Indifference shown by owners, however, may only be enjoyable and comfortable for a while, as this soon becomes a brake on company’s development. Schibsted’s chief Rolv Erik Ryssdal has, in my opinion, been sincere in saying that Eesti Meedia needs a better owner than Schibsted could manage to be.
What possible options passed through, over the year and a half?
Only some strong Nordic media companies were considered. For various reasons, the negotiations were never successful. Schibsted ruled out sales to opaque investors with unclear intentions, as well as to the competing Ekspress Grupp – even though, to get hold of Postimees, Hans H. Luik was willing to let go of a substantial part of his group.
In the end, two versions were left: either the company is purchased by its management, or Schibsted will continue. With Norwegians staying at the helm, Eesti Meedia would have been restructured and units not compatible with its priorities likely sold. Our desire was to retain a strong media group.
Whoever is only strong in one segment of media will never rise to lead the small media markets of Estonia or Baltics. Being leaders today, why then should we give up our position?
Schibsted accepted our approach. In June, we launched negotiations to buy out the company.
There was speculation in media of Gazprom-Media having been a possible buyer. How serious was that?
In these speculations, Gazprom has rather been used as a metaphor for Russian-minded investors, the existence of whom obviously may not be denied. Even so, to my knowledge no such investor ever crossed Schibsted’s threshold.
Had an investor with political motives taken over Eesti Meedia, who would have gained from that? Our competitors. As Eesti Meedia would have faced the same fate as Latvia’s largest publishing group Diena, a couple of years ago. The company basically scattered.
The talks were held between parties who knew each other well. Was that a simplifying of complicating factor with the deal?
As revealed by the fact we did it in two months – it simplified the issue. Otherwise, taking over a concern with over thousand employees in three countries, would surely lasted over a year. We knew, and still do, more about the company than anybody else. Even so, these were no easy negations, far from it. We had to really work at it.
A big part of Eesti Meedia is your handiwork. What will be Schibsted’s legacy, after they leave?
Now, with the contract signed, it really does feel good. A year and a half ago, when Schibsted’s chief informed me of the decision, I felt very disappointed. Schibsted leaves us with a strong media group which has, over 15 years, outgrown both Postimees and Estonia. Another piece of added value, left behind, is journalistic culture.
Had Schibsted not been around, our media landscape would probably look quite different. I’m afraid that the oligarchic journalism characteristic of Latvia and Lithuania would have spread its wings in Estonia as well.
Thanks to Schibsted, we foresaw media developments several years in advance. Now, we no longer have that opportunity.
In reality, nobody can keep media-related information just for themselves. And, even Schibsted’s representatives travel the world, telling their success stories.
True, you feel more secure inside a large international concern, you foresee the global trends; nevertheless, sometimes that may lead to failure to sense some needs on the local market in a timely manner. All lands and nations cannot be cast into one mould. Not all at once, at least.
After the deal, will any contacts remain with Schibsted at all?
Surely. Norwegian and Swedish journalists are very sad about us leaving. The creative part of cooperation will surely continue. Also, there is room for cooperation in advertisements business. Soov, for instance, will keep using Schibsted’s platform.
What do you say about the purchasing price? Was it expensive? Cheap?
I will repeat the well known fact: there are no expensive not cheap prices; there are the market-made prices. We might say ours was also market price, even if there was no auction. I think the price we agreed was reasonable for both parties. By cutting the company into pieces, Schibsted would probably have made more money. Reason enough to appreciate the Norwegians’ desire to ensure Eesti Meedia had a sustainable future.
Why did you include a financial investor, among the owners?
Has the management wished to buy a hundred per cent of the company, the talks at the bank would have been very short. Any bank will demand self-financing. As we had no money on that scale, involving an investor was the only option.
When did the management come up with the plan to buy out the company?
When Margus Linnamäe expressed concern about the future of the company, other options were still on the table. To tell the truth, it was only after meeting Margus that we became convinced that we might purchase Eesti Meedia shares ourselves. As long as we had no investor we could trust, and who would have trusted us, that was not really an option.
But, why Margus Linnamäe?
Firstly, he stands on very solid financial feet. Secondly: personal characteristics. He is a man of his word, well balanced, discreet, prudent, goal oriented.
Thirdly. His scale of interests coincides with that of Eesti Meedia. He is very local, while also having a wide grasp.
Fourthly, he keeps a low profile when relating to media. Should a media owner, out of vanity or whatever, want to take a public stand in all kinds of issues, the editors would have trouble on their hands.
How will the Eesti Meedia holdings be split?
50 per cent is owned by Margus Linnamäe, and 50 per cent by the management’s company TAMM Meedia. This is a situation where we must respect one another. Of TAMM Meedia, I hold 58 per cent; Toomas Issak, Meelis Luht and Andres Kull having 14 per cent each.
How much of your own personal money or guarantees did you have to pour in?
Compared to Margus Linnamäe’s investment, these sums are modest indeed.
Do you intend further changes in the ownership circle, involving new investors?
No. Toomas, Meelis and me have, for years, sat on Eesti Meedia board, bearing the responsibility for the entire group’s wellbeing. Andres Kull manages the Kroonpress print-shop which plays the most important role in Eesti Meedia’s current profits, therefore also in repaying the bank loan.
What, from now on, will the Eesti Meedia management structure look like?
The council will seat two members by Margus Linnamäe and two by TAMM Meedia. The board will keep on working with the three member model. In our functions of work, nothing changes.
As leader of Eesti Meedia, these must have been some rough 15 months?
Yes, this was not the fun part, really, of my professional career.
The emotions never reached the editorial desk, employees never guessing what was going on.
The leader must stand as a buffer, at times, between problems and employees.
Does Eesti Meedia now groan under a huge debt burden, forced to count every euro?
Money has to be counted anyhow. I think, when it comes to turning ideas into reality, we will be riding a new wave, now. As our competitors also seem to sense: we will be more efficient than before. The nervousness revealed at ownership change at Eesti Meedia tells us that was not the news they wanted to hear.
Are the new owners mainly interested in Baltic media landscape? Or the Baltics as a whole?
To be strong in Estonia, you have to be active outside of it. Schibsted only having emotional ties to Estonia, they used to treat Latvia and Lithuania as side effects. We have a clearer view of the Baltic strength, becoming rather more ambitious in that direction.
You have led the company under four owners: state/ministry of culture, staff, Heldur Tõnisson, and Schibsted. Now, in team with big businessman Margus Linnamäe. From the above list, which have been the «good» and the «bad» owners?
This may sound arrogant, but I have had by say choosing all four owners. Therefore, as some hopes have failed, I have only myself to blame. But the, really, all of the above have been good solutions for us, in their time.
What about Eesti Meedia’s and Ekspress Grupp’s joint enterprises: Õhtuleht, Ajakirjade Kirjastus, and Express Post?
Due to ownership change at Eesti Meedia, our partners may apply to buy out the companies; even so, I doubt if Estonian Competition Authority will accept such concentration of national enterprises under just one group.
Is everything the way you have wanted it to be, at Eesti Meedia, or are you planning changes – curbing some businesses or selling off subsidiaries, to focus only on what’s important?
MBO (management buyout – edit) having been accomplished to maintain the group, it would be a little strange to start cutting it up now. We have no company we would want to get rid of.
Postimees has been in existence for 156 years. What would be the Postimees mission – not to be swayed by any business deal?
Searching out the truth. With this as pour aim, in all sincerity, it will not be a big sin if we will not always succeed to find out the final and only truth.
Lately, you came out with your initial novel. We hear that a sequel is to emerge, in October, from the print-shop. Will that be the end of fiction, for now?
No third book planned, really, at the moment. Life is exciting again, with no fiction needed to spice it up. But: we’ll see....