Kauppakorkeakoulun julkaisuportaali
Aalto-yliopiston kauppakorkeakoulun gradujen tiedot nyt Aaltodocissa: Aaltodoc-julkaisuarkisto
Kauppakorkeakoulu | Rahoituksen laitos | Rahoitus | 2014
Tutkielman numero: 13649
Hedging media sales cash flow at otavamedia - A risk management method for closely held companies
Tekijä: Reenpää, Joonas
Otsikko: Hedging media sales cash flow at otavamedia - A risk management method for closely held companies
Vuosi: 2014  Kieli: eng
Laitos: Rahoituksen laitos
Aine: Rahoitus
Asiasanat: rahoitus; financing; riskienhallinta; risk management; media; media; kustannustoimi; publishing; perheyhtiöt; family firms; mainonta; advertising; myynti; sales; kassavirta; cash flow
Sivumäärä: 66
» hse_ethesis_13649.pdf pdf  koko: 2 MB (1418469)
Avainsanat: risk management; hedging; private company; family company
Objectives of the thesis:

The objective of this thesis is to discover whether Otavamedia, a Finnish media company, can utilize its' publicly listed competitors' shares as a tool of risk management for its media sales cash flow. The risk associated with media sales cash flow is the inevitable effect it has on shareholders' funds available for distribution. The advantage the company has is the advance knowledge of media advertising growth, which is generally found to be vastly cyclical and volatile. This information would by the assumptions of this paper, provide the company with a predictor on the future growth of its competing companies' share prices. The study proposes that a combination of securities could then be found which would offset a significant amount of Otavamedia's media sales cash flow volatility and deliver additional cash flows. The testing process was designed so that it would not be overly focused, but rather a wide set of parameters were included to broaden the scope of the study. Different portfolio variations, adjustment intervals, hedging strategies, regression models, and data lag times are all cross-inspected to find out which combinations provide best outcomes.


The data consists of internal media sales cash flow figures of Otavamedia, its competitors share price data, the main Finnish market indexes, and three control variables. The monthly media sales cash flows are from January 1998 through December 2012, and all other data are retrieved for the same period. Apart from the media sales cash flow, the data is daily, but due to the dependent variable being on a monthly level, the timeframe inspected in the study is explicitly monthly.

Main findings:

The main findings of the thesis are that indeed Otavamedia can partly lower its risk to media sales cash flow volatility by constructing the proposed risk management mechanisms. Both lowered volatility and improved cash flows are reported, but their economic significance to the case company remains questionable. The suggested alternate strategies on hedging were not found beneficial, but rather that the simple and straightforward hedging method proved best results.
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