DIY Journalism
Some musings on the nature of blogs

Mecom set to expand in Holland

The buzz around today's announcement of Mecom's takeover plans for Dutch regional newspaper group Wegener started ticking into my newsreader this morning via Dutch twitters, blogs and newspapers. Monty continues his march across Europe, wrote Charles Pretzlik in his FT business blog around noon.

It's a march that no doubt will leave prospective and existing employees with mixed feelings at best. Employees at recently acquired Mecom newspapers are particularly worried about increased profitability demands and the company's highly geared business model:

"We are most worried that Mecom's profitability demands will mean that we won't be able to develop the newspapers the way we have to in the face of today's competitive media landscape. Orkla was like Uncle Scrooge's money bin. Now we have been sold to a company financed by loans, which creates a much more unstable situation," Olav Skjegstad, an employee representative and board member of Mecom Europe, told me in a previous interview.

This does not seem to worry Mecom-boss Montgomery, who recently launched a £570m share issue to fund further acquisitions in continental Europe. When Montgomery was in Oslo for a debate at the annual conference of Norway's journalist union, less than two weeks back, he said: "We have £65m in debts. We're a very well funded company. In fact, we don't have enough debts at the moment."

More about the reactions among Dutch Journalists here (in Dutch). About the Dutch newspaper war and crowded freesheet segment here (in German).


Although the strategy of Mecom is unclear, the ownership could mean two things. The first is building a chain of local European papers. The second is harvesting: cutting jobs and lowering expenses, go for short term profits, and break-up or sell the company after some years. Mecom, being a company financed by debt, is likely to go for the second option. Mecom only made one investment so far: starting free daily Dato in Denmark and pulling the plug six months later.

It's true as you say that this kind of short-termism is a legitimate fear when it comes to Mecom, and a fear most Mecom employees seem to share.

What I left in the comments over at your blog yesterday was just an interesting anecdote: in some ways I think many Norwegian Mecom employees still dream of being rescued by a Norwegian owner and are none too happy about the prospect of Mecom being in the game for the long run.

Of course, there are many takes on this: for former Orkla Media, some analysts have welcomed the end of Orkla's softly, softly approach and said radical restructuring is long overdue. Could Montgomery be the man to see this through and help stem the downwards trend in this part of the newspaper industry? Can anyone do that? It's certainly a very interesting story to watch...

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