Media ownership

Digitalisation of content challenges legacy media products and contributes to market exit and consolidation across geographical markets. Media market structures are changing continuously, and the observation of increasing market concentration is not at all a new one. Over the last three decades, the Finnish mass media markets have become highly concentrated.  Ala-Fossi et al. (forthcoming, 2022) have presented three reasons for that. First, foreign investments used to be strictly limited in Finland, but since the 1990s, the Finnish media policy has not actively aimed at preventing acquisitions or consolidation with any ownership limitations or regulations. Second, indirect tax subsidies, that is, a reduced rate of VAT favouring the largest newspaper publishing companies, may have even accelerated ownership concentration of the news media. Third, there is no special competition legislation for media to prevent ownership concentration or to protect diversity of ownership.

The highest degree of concentration is in radio broadcasting, which is dominated by three key players, public broadcaster Yleisradio Oy, Sanoma Media Finland Oy (part of the Sanoma Group) and Bauer Media Finland Oy (subsidiary of German Bauer Media Group). The two largest companies collect approximately four-fifths of all revenues of commercial radio stations in Finland. The three largest players in terrestrial television broadcasting are Yleisradio Oy, commercial broadcasters Sanoma Media Finland Oy and MTV Oy (a subsidiary of a Swedish multinational telecommunications company Telia Company Ab). Other television broadcasters include subsidiaries of international media groups like Warner Bros. Discovery and The Walt Disney Company Ltd. At the national level, newspaper ownership is slightly less concentrated than radio or television broadcasting (Ala-Fossi et al., 2020; Manninen & Hjerppe, 2021).

Nonetheless, it is the newspaper publishing that is presently characterised by frequent mergers and consolidation. When assessing the concentration of ownership of newspapers or, more broadly, print news media, one must be considered when assessing the structure of the markets. Only a few newspaper titles, including tabloids, can be classified as national and newspaper publishing markets are divided to several regional markets that are characterised by relatively large enterprises publishing one or several newspapers with predominantly regional circulation. With concentration and consolidation, most of the regional newspaper companies have reached a monopoly-like position in their markets, as they own the majority or all the local papers and free-sheets in the surrounding area (Björkroth & Grönlund, 2021). In 2021, the Keskisuomalainen Group owned almost a third (31%) of 234 member publications of the News Media Finland (NMF). The five largest newspaper publishing companies, measured by number of titles (including Keskisuomalainen Oyj, Sanoma Oyj, Hilla Group Oyj, Kaleva Oy and TS-Yhtymä Oy), owned more than half (59%) of all member titles of the NMF.

There are also significant differences in the ownership structure of even the largest newspaper publishers. Among listed companies, for example, Keskisuomalainen Oyj’s ownership is widely distributed and the share of even the largest owner remains at only about 5 per cent. Most of the company’s owners are private individuals. Instead, the owners of Sanoma Corporation, for example, have a lot of both foundations and institutional investors. The share of the largest owner is also a quarter. TS-Yhtymä Oy and Kaleva Oy, on the other hand, are unlisted companies where ownership is concentrated in one or a few families. From the data on direct ownership in the Finnish newspaper industry, one can find some substantial degrees of cross-ownership between the major newspaper publishing companies. Additional features that could affect the effective concentration are the existence of joint ventures, the indirect ownership of several rivals and that some newspapers have common institutional shareholders (Björkroth & Grönlund, 2021).

Type of information missing

In terms of transparency and type of information that is missing from the database, there are noticeable differences in how generously the different companies report ownership related data to the public. Nevertheless, according to the Companies Act, an alphabetical list of shareholders in accordance with the share list must be kept, which must contain the shareholder’s name and address and the number of shares of each shareholder by share class. The list of shareholders is public. It is required by law to be kept at the company’s headquarters for all to see. In other words, any person outside the company is entitled to see the shareholder register without a separate request. In addition, everyone has the right to receive a copy of the shareholder register or part thereof after reimbursing the company’s expenses. The differences in transparency are of course most obvious between public corporations and limited companies, which are not traded on the stock market. However, a few of the limited companies did not provide any information about their owners on their website nor in their annual reports and did not provide this data when we requested a list of shareholders by e-mail. In a study conducted in 2018, about 25% of Finnish media outlets (n=197) did not have any reference to their owners on the front page of their websites (Ala-Fossi et al., 2018).

These are some of the reasons why Finland has performed rather poorly in the international comparison regarding ownership transparency and reporting of tax information (Finnwatch – Financial Secrecy Index). New amendments to the Trade Register Act will take effect in August of 2022 and these amendments should improve the ownership transparency of companies in Finland. Moreover, in the Money Laundering Act, a beneficial owner refers to a person who either owns the company or otherwise controls it. In most cases, the beneficial owners are the owners of the company. The Finnish Patent and Registration Office (PRH) provides details on beneficial owners entered in the Trade Register. However, the details on beneficial owners are not public in the same way as other company details entered in the Trade Register. The information about whether the notification of beneficial owners has been registered is public and free of charge. The PRH provides details on beneficial owners to only those whose purpose of use of the details is in accordance with the Act on Money Laundering, but the details are subject to a fee. Research on clarifying the concentration of ownership by researchers is not an activity that falls under this categorisation.

In Finland, the Foundation Act (487/2015) regulates the operation and supervision of the foundation. Each foundation has its own purpose that determines why that foundation exists. The establishment of a foundation will provide funds to fulfil a useful purpose as defined in the rules. The purpose cannot be to conduct business or generate a financial advantage for a related party and can only be changed to a limited extent. The foundation has its own administration, separate from its founders and other donors. Three of the analysed media companies were ultimately owned by foundations, which is of course not a transparency issue of the same magnitude as with limited liability companies – foundations are not in actuality owned by anyone. These foundations (Allerfonden, Harry Schaumans Stiftelse and Konstsamfundet), which are owners of the majority of the Swedish language newspaper titles in Finland, were however very transparent in their annual report in relation to economic figures and the companies they owned. Konstsamfundet’s main purposes, according to the statutes, are to support arts and different fields of culture for the Swedish-speaking Finns in our society. Harry Schaumans Stiftelse supports culture, education and science in Swedish-speaking Ostrobothnia. In addition, biggest owner of Sanoma Group is Jane and Aatos Erkko Foundation whose purpose is to support high-level, international scientific research as well as arts and culture. In addition, the fifth biggest owner of Sanoma Group is the Helsingin Sanomat Foundation, whose purpose is to secure the future of Finnish media and quality journalism as well as to support freedom of speech. In the Finnish context, foundations have multiple goals and ambitions as owners of media companies. However, hiding the ownership of the founders of the foundations is not a major incentive or priority.

Other missing information was mostly market sector-related data (absolute figures of distributed circulation and figures about the online audiences) and information regarding the newsroom’s participation in choosing the editor-in-chief. The online audience data of the different print and broadcasting media was underwhelming and was not reported by the companies themselves in any fashion. The only reliable data for measuring online audience was found at FIAM (Finnish Internet Audience Measurement). Their reports consist mainly of the internet audience of the newspaper outlets, and thus we could not get a comprehensive picture of how relevant the online market for the radio sector really is. The actions of Sanoma Oyj and Bauer Media Oy to concentrate nearly all of their (radio)broadcasting online presence to the applications Supla (Sanoma) and Radioplay (Bauer Media) also exacerbated the issue – Supla for example, offered no information in the app of who was editorially responsible for their news-related content.