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Uproar among Mecom's Scandinavian employees

Journalists feel something is rotten in Mecom's Danish and Norwegian fiefdoms...

Employees at two Danish Mecom newspapers on strike today
Journalists at Mecom-owned B.T. and Berlingske Tidende decided to lay down their work yesterday, after the details of an expected redundancy plan were announced. Five journalists are to be axed at B.T. and 20 – 25 at Berlingske Tidende.
B.T. staff claim the redundancies mean the paper no longer will be able to deliver a competitive product. The journalists are particularly upset that the redundancies are non-negotiable and will be implemented immediately, rather than over the next two years as originally planned (via Berlingske). Propaganda reports that neither of the two papers will be published today. The Danish protests come hot on the heels of last week's uproar among Mecom's Norwegian employees:

Employees say Mecom cuts represent ruthless gamble with Norwegian local newspapers
Just back from their Easter holidays last week, employees in Mecom's Norwegian branch, Edda Media, were presented with the latest update on redundancies - and they didn't much like what they were told. The number, 200, had been known since Christmas, when an extra 80 positions were added to the planned 120 just before the festive season descended on the country. But employees were outraged that 28 of the jobs axed will be editorial positions, widely seen as contrary to Montgomery's previous promises, and at odds with what is perceived as Edda Media's very healthy 12,4 per cent profit margin for 2006. This led to numerous loud protests, including this one from newspapers in my home county, where Edda Media generated 43m NOK in profits last year:

"This is an immoral exploitation and draining of the newspaper companies. Everything is done to satisfy foreign capital. The cynical hunt for profit endangers the media's civic responsibilities and represents a ruthless gamble with Norwegian local newspapers... Good colleagues are facing an uncertain future, not because the demands of financial reality, but entirely to enable the debt-slave Montgomery to make an even bigger profit."

Monty to sell his Norwegian media assets or enter into a joint venture with Norwegians?
Norwegian media companies A-pressen and Dagbladet were widely seen as the preferred bidders when former Orkla media, now renamed Edda media, was put up for sale last year – even though strong synergy effects between Dagbladet / A-pressen and former Orkla media would have meant substantial redundancies (it was speculated that at least 400 jobs, twice of what Mecom now has decided to axe in Norway, would have to go if A-pressen won the bid).

Despite these somewhat bleak prospects, Kjetil Haanes, an employee representative for Edda Media, recently expressed hopes that Monty might soon be forced to sell parts of his Norwegian newspaper assets to Norwegian media companies like Dagbladet or A-pressen, thereby securing a much more 'sound' ownership situation. His reasoning? Monty has promised to pay his shareholders dividends in 2008 and needs to free up more capital this year in order to accomplish that. Seems Haanes must be imagining an all favourable situation where no synergies, and other 'undesirable' effects any longer exists - which, heaven forbid, would add up to something very much resembling a benefit of Mecom winning the bid for former Orkla Media.

The redundancy packages in Edda Media were negotiated last spring, before Mecom's takeover, and are "the best ever in the Orkla/ Edda Media system," according to Haanes.


Was there anything else to really expect? Mecom had trouble raising the money from the start, and had to make promises to the investors that were impossible to keep if the were to keep their promises to the norwegian press. And the investors are most important to Mecom.

I'm not convinced about Haanes' speculations about selling parts of Edda Media to Norwegian owners. Of course, speculations about Mecom entering into a joint venture with Dagbladet are not new, mainly because Dagbladet's digital expertise would be of value to Mecom, and employees/ union representatives have said they'd welcome the marriage of local and national, but I don't see any benefits of a Mecom deal with A-pressen - I think that one beggars belief.

Overall I think raising money by selling minority assets would be a more likely strategy for Mecom - they seem to be vying for majority control in all their ventures - but I must admit I haven't looked too closely on Mecom's portfolio qua minority/majority stakes recently.

The employee 'uproar' was very predictable though, that has been brewing more or less since Mecom's takeover, and I suspect we 'ain't seen nothing yet'...

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