Strategic and Organisational fit in Corporate News Markets: A Principal-agent Approach to Studying Newspaper Mergers

Abstract

This article analyses strategic and organisational fit in corporate newspaper mergers in the context of the digitalisation of local newspaper markets. Using the 2019 acquisition of Nordsjø Media by Amedia in Norway as case, we analyse how eight editors-inchief perceive the process of incorporating small, low-frequency, print-oriented monopolistic newspapers into one of Scandinavia's largest newspaper chains. The semi-structured interviews were analysed in light of perceived strategic and organisational fit in a principal-agent theoretical framework, the aim of which is to shed light on corporate ownership effects in consolidated newspaper markets. The analysis reveals the precarity of independent ownership in digitising news markets, to which corporatisation emerges as a necessary and welcomed solution. We find the strategic fit as perceived by editors to be tied to technological resources and scale economics, while organisational fit is hampered by the speed and pressure of corporatisation processes. While these results largely support findings from previous acquisition studies in the news industries, the contribution of this analysis lies primarily with the necessity of scale required by the technological transformation that forces independent newspapers to submit to larger chain operations and how it influences considerations of fit in disruptive digital news markets.

The business of news in the AI economy

“…The markets are dominated by regional newspaper chains (e.g., Amedia, Bonnier, and Polaris) who have, since 2017-2018, acquired a number of mid-sized chains, increasing ownership concentration in the region. Most of these acquisitions are amicable affairs, welcomed by the smaller titles (Sjøvaag, Owren, and Borgen 2021). For them, corporate ownership presents as a solution to gain access to the digital infrastructures needed to link up to the digital economy.…”

“…The empirical basis for what is here essentially a theoretical exercise is sourced in an extensive analysis of the processes of adaptation undertaken by newspaper corporations and public broadcasters in the Scandinavian countries (Denmark, Norway and Sweden) between 2016 and 2023. My reflections result from studying mergers and acquisitions in the period (sourced from document analyses of the trade press in the three countries); the resulting patterns of ownership concentration in the region; interviews with newspaper CEOs and managing editors (methodological details can be found in Sjøvaag and Owren 2021; Sjøvaag, Owren, and Borgen 2021; Sjøvaag 2023; Sjøvaag and Owren 2023); as well as think‐aloud sessions with industry representatives (for details, see Sjøvaag, Olsen, and Ferrer‐Conill 2024). In the following, I outline how network effects challenge the platform function of news and its two‐sided business model and consider how programmatic advertising alters ownership structures in the news market.…”

Journalists’ Social Identity: The Case of Two Calgary Newspapers

“…254). There is also the Norwegian case of Nordsjø Media, bought by the foundation-owned Amedia in 2019: editors of the targeted nine local newspapers welcomed being purchased by the larger Amedia because it had the resources to embrace the digital marketplace (Sjøvaag, Owren, & Borgen, 2021). Hinsley (2017) analyzed organizational identity after the 2013 merger of St. Louis Public Radio (STLPR) with the online-only, non-profit St. Louis Beacon.…”

Risk perception in newspaper chains: Threats, uncertainties and corporate boundary work

“…CEOs are in a particularly public position as responsible both for the quality of the journalistic product, and for the financial performance of the firm. Moreover, news corporation CEOs hold key positions for the future of journalism, making decisions that affect audiences’ news access (Benson, 2019), pursuing innovations that induce mimicry in competing firms (Barland, 2020), acquiring companies that reduces ownership diversity in the overall landscape (Sjøvaag et al, 2020) and making statements that influence policy-making (Sjøvaag and Krumsvik, 2018). What news CEOs perceive as the biggest risks facing journalism in the near future will therefore have an impact on the development of news media markets.…”