The news came as a complete shock to the employees at
the free newspaper. According to Berlingske.dk, the current majority owner, Morten Lund,
approached Metro International with a proposal to buy its Danish operation -
comprised of the recently "merged"
freesheets MetroXpress and 24timer - only last week and was rumoured to be preparing an
official bid for today. The bid, tough described as "fanciful at the
best" by Metro's CEO Per Mikael Jensen, was believed to be financed by
American venture capital firm Draper Fisher Jurvetson, recently
announced as a major new investor in the freesheet.
Nyhedsavisen was modelled
on the "quality freesheet" Frettabladid that Baugur/Dagsbrun had been
so successful with on Iceland. It was Dagsbrun's plans to launch a similar paper
in Denmark, backed by Baugur, that forced the "great"
Danish freshet war in 2006, which saw a range of new freesheets launched within an unbelievably short span in time (mostly in August).
It did not prove so great for the finances of Danish
newspaper companies of course, with as many as five major freesheets competing only in Copenhagen, the Danish capital, for the
advertisers gold, the two-year long war turned into a
very costly one. Hence the news of Nyhedsavisen closure has been greeted warmly by
competing newspaper groups, such as Mecom's Danish arm, Berlingske Media, today.
Nyhedsavisen's management blamed the market downturn and worsened economic outlook for the decision to give up what many have seen as an impossible battle from the very outset. It's estimated Nyhedsavisen lost close to 700m DKK on the venture.
Update 21:05: Nyhedsavisen's closure leaves Denmark with three major freesheets: both Metro's MetroXpress and Berlingske's Urban predates the freesheet war, while 24timer, the second new major freesheet to be launched in August 2006 (after the now defunct Dato), effectively was acquired by Metro International a while back, and is said to be dragging down the latter's financial results in Denmark.
(NB: Use the tag cloud for freesheets, left-hand side, or the blogbar, right-hand side of the blog, to find more blog posts on Nyhedsavisen, Skype-investor and majority-owner Morten Lund, Draper Jurvetson Fisher, Baugur/Dagsbrun and the Danish freesheet war, which I've blogged about since its inception).