These are desperate media times. Late Friday night, news broke Mecom was planning a rights issue within the next month. The story surfaced just as the ailing pan-European company was preparing for a crucial week, with its EGM taking place today and its covenant test extenstion expiring early next week.
Earlier this month, Norwegian media speculated another pan-European media player, Schibsted, may be forced to consider to ask shareholders for a capital injection, a move which would be less than straighforward due to its coroporate bylaws. However, Schibsted's CEO Kjell Aamot denied such a move was on the agenda, and said the company was instead looking to sell assets - such as taking a partner into its lucrative classified media online advertising business.
In today's market such moves look rather desperate, but so far Mecom's share price is certainly on the rise - perhaps aided by this bit of news.
On approaching recession central
"Ladies and gentlemen, fasten your seatbelts. We're making our final approach to recession central," wrote Peter Kirwan in early February as we were coming closer to the financial reporting season with all its expected doom and gloom.
I was quite taken by that metaphore, and thought it would be a great way to visualise the history of events later: a ghost train moving relentlessly forward, making unwelcome stops at most media companies along the way. Except it's still a bit of a mystery train, and we don't quite know when we'll reach recession central or what it'll look like.
Interestingly, as we're currently debating why financial journalism failed to spot the storm brewing, if the nature of the meltdown was not forewarned, at least 247wallstreet.com's Jon Ogg blogged about how tired he was of predictions about recession central in December 2007 - not long after we had started to see the footprints of the subprime induced ghost in the share prices and results of European media companies. Framed that way, it's not been such a speedy train at all, and, as I've said before, I thought we would have seen the downturn much earlier, but because I was focusing narrowly on key cyclical indicators such as (ads for) property and jobs and the media industry I was not prepared for the scale.
Photo by Ben McLeod from Flickr, published under a Creative Commons license