Norwegian media conglomerate Schibsted has made the swift decision to divest its minority investment in the troubled Swedish media and entertainment company Viaplay.
Schibsted initially acquired a 10.1% stake in Viaplay in September, investing NOK 380 million ($35.8 million) before the share price experienced a significant decline. By the end of 2023, the value of Schibsted's shares had plummeted to NOK 43 million.
Kristin Skogen Lund, CEO of Schibsted, stated, "After a thorough evaluation of our options, and considering the anticipated changes in our corporate structure, we have chosen to wind down and exit our investment in Viaplay. We recognised the risks associated with this investment from the outset... While we still believed in the long-term potential of Viaplay's restructuring, the timing, especially with the impending acquisition of our media business by the trust, no longer aligns with our strategic objectives."
Lund's announcement comes amidst Schibsted's planned split into two separate entities. Additionally, French television giant Canal Plus and European investment firm PPF Group have recently increased their respective stakes in Viaplay, collectively owning almost 60% of the business as part of a recapitalisation effort.
Once operating in as many as 13 countries, including the US and UK, Viaplay has since scaled back its operations, focusing primarily on Scandinavia. In November, Viaplay divested completely from the UK, selling the business it had acquired from Premier Sports back to its original owner at a loss.
Furthermore, Viaplay is discontinuing its direct-to-consumer operations in the US and Canada as part of a broader initiative to streamline its operations. The platform will cease operations in Canada on February 28th and in the US on February 29th, with Viaplay content being distributed through its partners in each country via streaming services.
Viaplay's entry into the US and Canada markets in early 2023 was met with financial challenges, culminating in severe difficulties throughout the year. In July, the company announced a workforce reduction of 25%, affecting approximately 450 employees, as part of restructuring efforts estimated to cost around $4 million.
Facing significant financial strain, Viaplay reported a third-quarter net loss of SEK693 million, with its share price hitting a new low of SEK4.68.