LazyTown stands stronger than ever. The company's relatives are big-hearted and seem to have every reason to be optimistic about the business in the coming years. "We have just become part of the Turner group, which in turn is part of Time Warner. Those agreements were finalized late 2011, and the purpose, among other things, to bring on board an owner who has the right distribution channels," say...
Magnús Scheving and LazyTown have been in the news quite a bit lately as bondholders plan to sue the company for unpaid debts. According to Dagblaðið Vísir (DV) ‘s sources, Magnús Scheving has been looking for people to bring more capital into the operation of LazyTown. Has it not gone as intended?
One of the main reasons for this is said to be that Magnús does not want to allow others to come to the management of LazyTown, where he and his wife have a controlling interest. Magnús is said to be a small operator and it would be necessary to get a CEO with a business education.
Among other things, Magnús has approached Róbert Wessmann, the largest owner of LazyTown. According to DV’s sources, Róbert does not want to contribute more capital to the company. Two companies owned by Róbert are merging with a 35 percent share in LazyTown. Magnus Schveving and his wife hold a 38 percent share.
Sued before the District Court
The District Court will hear the enforcement request of the bondholders next January, 2010. If their request is accepted, it is possible to request that the county official make a foreclosure at LazyTown. If the foreclosure is then unsuccessful, it is possible to request that LazyTown be taken into bankruptcy. According to the sources of the Business newspaper Viðskiptablað, LazyTown has not made payments to the owners of unsecured bonds for many months. The amount is said to be about 26 million dollars or 3.3 billion Icelandic ISK. Viðskiptablað also reported that LazyTown owed Landsbanki 1800 million ISK (14 million dollars).
This is not the first time that LazyTown has failed to honor agreements. In 2005, the Innovation Fund for Business (NSA) acquired a two percent stake in LazyTown. It happened following a judgment regarding a risky loan that the NSA had granted to LazyTown in 2001. Magnús had not fulfilled the terms of the loan despite repeated requests from the fund. Ágúst Freyr Ingason, deputy director of LazyTown, did not want to comment on the company’s financial situation when DV caught up with him.
An abstinence man
Magnús Örn Scheving was born on November 10, 1964. Ragnheiður Pétursdóttir Melsted is Magnús’s partner, and mother of his children. She was born in 1971. Magnús’ parents are Eyjólfur Magnússon Scheving, a physical education teacher, and Þórveig Hjartardóttir. They divorced about fifteen years ago. Magnús has two siblings and he is in the middle. Magnús grew up in Borgarnes until the age of sixteen, where his father was a sports teacher and was a pioneer in sports activities with children. Magnús is abstinent and has never drunk or smoked.
An ungrateful egotist
He is rather short or 173 centimeters tall. At the height of his aerobic career, he said he was struggling to get over 150 pounds. However, it was going very badly as he practiced and taught aerobics every day. He was one of the leading gymnasts in the world. He was twice European champion and once world champion in that discipline, in 1995. The year before he had won silver. He was also voted the athlete of the year in Iceland in 1994, as well as being voted the sexiest karman in the country by the listeners of Rásar 2. Magnús worked as an aerobics instructor at World Class between 1986 and 1993.
He and Björrn Leifsson, the owner of World Class, were good friends, but they fell out. Björn has mentioned that after Magnús became known as an aerobics instructor and competitor, his ego got to his head. Magnús pays little attention to the contribution of other people who help him.
Lives on junk food
It is said that Magnús has a great obsession with perfection. He is dyslexic and said to be a hyperactive workaholic who sometimes sleeps only three to four hours a night. As with many other entrepreneurs, Magnús prefers to be in control of everything. He often has a hard time trusting other people for things he thinks he can do better. In a close-up that the magazine Mannlíf made in 2005 about Magnús, it was stated that his colleagues had looked up to him to cope with the workload.
The employees who worked in LazyTown’s film studio were surprised by how little Magnús thought about healthy food. “It’s been a long time since I saw a man who ate as much sweets and drank as much soda as him. The porridge was always ready, but I never saw him eat it. Of course he doesn’t smoke or drink. One still feels that a man who considers himself a role model of a healthy lifestyle should follow it himself,” said an employee of LazyTown in a close-up of Mannlíf.
A respondent that DV talked to, said that it was probably one of Magnús’ disadvantages that he was probably not a great operator. He would be going in too many directions with LazyTown instead of focusing first on a few places and completing those goals. “The LazyTown idea is an extremely noble thought. Magnús, on the other hand, has gone a bit far. Into food, drink and video game consoles. However, it has been lacking to focus on individual parts and finish them first before starting the next one. He’s been all over the place and hasn’t really finished anything,” says the interviewer.
Magnús has very strong opinions that he is doing the right thing. He finds it difficult to accept other people’s ideas about changes and suggestions for what could be done better. This is often a characteristic of ambitious entrepreneurs. You can probably find a bit of a similarity between him and Kári Stefánsson, the founder of deCode, in this regard. The respondent that DV spoke to, believed that the same applied to Magnús and Kári. It would be more suitable for them to be chairmen. Then find a CEO with a business education and the financial thinking that entrepreneurs often lack.
A versatile athlete
In an interview with DV, Eyjólfur Magnússon Scheving, Magnús’s father, says that from a young age he followed him in sports as well as in other jobs. Eyjólfur was the chairman of the fishermen’s association in Borgarnes, and Magnús took part in plays that were held in the town’s meeting house. Eyjólfur says that even though Magnús was very energetic, he would not say that he was hyperactive. “He was hardworking and could get things done. Magnus was very creative all his life. There was good discipline in sports activities in Borgarnes at that time and Magnús was never in trouble. He had a great desire to play and was also given the freedom to do so,” he says of his son. According to Eyjólf, Magnús was a very versatile athlete and competed in both football, basketball and athletics. “He participated in all sports. Magnus could have been good at any sport,” he says.
Wanted to be an architect
When asked, Eyjólfur says that he did not expect at all that Magnús would start working in something related to fitness. “I expected him to study architecture. He was creative,” he says. The reason why Magnús learned carpentry was because his father encouraged him to do so. Told him it would be good to know the handles before he started studying architecture. “I think it was just a coincidence that he went into what he works at today, like so many other things in life,” says Eyjólfur.
According to Eyjólf, Magnús’s architectural skills became apparent when he built his house at Lindarbraut in Seltjarnarnes. He built the house from scratch, because it was falling apart when Magnús bought it. “He saw the beauty in this house that you can see so well today. Magnús built the house when he was just over twenty,” he says. In an interview with DV in 1994, Magnús said that he does little construction work. Only for friends and acquaintances, as during those years he was busy teaching aerobics as well as training hard himself.
Both a family man and a loner
Eyjólfur describes Magnús as a great family man who, however, also needs to be alone. Magnus and Ragnheiður have two children. Kristófer who is 10 years old and Sylvía Erla who is 13 years old. “He is both a multi-family man and a loner at the same time, as is the case with many artists.” Eyjólfur says it is difficult to estimate how long Magnús will continue with the LazyTown project, which has been like a child to him. “I have often thought that he would let it die out, but I think it is difficult for him to let go of the child he has created.” However, this has come so far and much further than expected,” says Eyjólfur.
He says it’s hard to name Magnús’s disadvantages. He is organized and thinks things through. Acquaintances say that Magnús can thank Ragnheiður, his partner, a lot for LazyTown’s success. In Mannlíf’s close-up in 2005, it was stated that salary payments to the employees of LazyTown have always been made. This is often not the case in many cases in the film industry in Iceland. Ragnheiður is credited with the fact that salary payments have always been made.
Magnus had a daughter, Sunna Dögg Scheving, when he was 23 years old. Magnús and Halldóra Blöndal, the girl’s mother, have never been together. Sunna Dögg has had a lot of difficulties since she became deaf at a young age. Sunna Dögg and her mother were interviewed by DV in 2004. Sunna Dögg was abused at the Hearing School for the Deaf from the age of five and said in the interview that she had suffered a lot. She said she hated the bully, Hjálmar Örn Pétursson, who was convicted of abusing three girls at the Deaf School.
Sunna Dögg has been admitted to the Child and Adolescent Psychiatry Department of Landspítal and also to Stuðlar. She started drinking and using drugs to numb her pain. In an interview with Séð og heð in 2008, Sunna Dögg said that she was not happy with her father. Magnus has taken little care to nothing. She experienced a lot of rejection because she feels like her dad sees her as a secret that no one should know about.
Once she met Ragnheiður in a shop and she told her children that Sunna Dögg was just their cousin and not much related to them. When Sunna Dögg was pregnant, she called Magnús’ house and spoke to his roommate. When Magnús heard that she had called his home, he frantically called Sunna’s mother and said that she was no longer allowed to call him. Sunna Dögg had a child at the end of 2008 and told Séð and heard that Magnús had visited them. Magnús therefore became a grandfather at only 43 years old.
Hard to get refinanced
The biggest owner of LazyTown are companies owned by entrepreneur Róberts Wessmann. Róbert owns the company Latur ehf. which owns 23.2 percent in LazyTown. He also owns Salt Investments, which holds a 12.2 percent stake in LazyTown. Magnús Scheving and his wife Ragnheiður hold a share of almost 38 percent. Fjærfestingafélagið Gaumur then holds a 15.4 percent share, and the Innovation Fund for Business Life has a 1.9 percent share.
In an interview with DV, Róbert Wessmann says he can’t say much about LazyTown’s financial situation. As mentioned before, the bondholders have decided to sue LazyTown in order to get the unpaid debts paid. Róbert believes that LazyTown’s financial problems are not caused by the same problems as many Icelandic companies, such as currency risk. “I think this is mainly due to the fact that the club is trying to refinance itself. That market is of course heavy today,” he says.
Wanted to invest in a good cause
Róbert says that the reason he invested in LazyTown was that he thought it was an exciting idea. “It appeals to kids and the cause is good. It’s about a healthy diet and lifestyle. I found this an exciting project, and not only as an investment, but also as a project to make a difference. I believe that Magnús put a lot of weight on the scales both inside and outside of Iceland with this topic. Bringing the right message to children all over the world,” says Róbert.
He believes that the cause mainly made him decide to invest in LazyTown. Profitability considerations were not at the top of the agenda. The reason was also that after working for a long time in the health-related sector at Actavis, LazyTown was a nice addition to that.
Thinks that LazyTown will live on
Róbert says that Magnús is an extremely diligent and hardworking individual. He is with more fruitful men in many respects. “It’s really just a description of an entrepreneur who starts with a small project that has grown tremendously in the last few years,” he says. Róbert believes that regardless of the financial restructuring that Magnús is dealing with today, LazyTown and what the project stands for will live on for the foreseeable future. Regardless of how LazyTown manages to negotiate with bondholders and other things related to the company’s operations. “The ideology as such has become so strong that I believe that LazyTown will always live,” says Róbert.
Olympic ideal to invest in LazyTown
One of the first to invest in LazyTown was Jón Ásgeir Jóhannesson. The story goes that Magnús Scheving jumped into Jón Ásgeir’s car and managed to convince him of the excellence of LazyTown in five minutes. In an interview with DV, Skarphéðinn Berg Steinarsson, former managing director at Baugi Group, says that there was probably some kind of Olympic ideal behind Baug and Gaum’s investments in LazyTown.
As mentioned before, Gaumur still has a 15.4 percent stake in LazyTown. Skarphéðinn says that certainly Baugur and Gaumur wanted to get a return on their investment. However, there was not as much demand for it in the case of LazyTown as in other investments.
Shown in 130 countries
Magnús got the idea for LazyTown in 1992, but the adventure began in 1995. Its beginning is attributed to the fact that Karl Helgason, the editor of Æskunnar, encouraged Magnús to write the book Áfram Latibaer, which was published in 1995. In the fall of 2003, LazyTown built a 5000 square meter studio in Garðabær. In August 2004, the series began airing in the United States. Now, almost six years later, around 50 episodes have been produced and shown in 130 countries around the world. In 2008, LazyTown signed an agreement with the BBC in Great Britain to co-produce 26 episodes.
In an interview with Fréttablaðið in 2008, Magnús Scheving told about his trip to South America. Magnús was invited to meet the Minister of Health of Chile, and when he arrived in the country, he could not go through customs at the airport without giving autographs to customs officers and children. “The woman who booked my hotel room knocked one day and politely asked if she could bring her child, who was in a nearby kindergarten, to see me. I said of course, and when I came down to the lobby a little later, there were about eighty children between the ages of three and six who wanted to show me a play about movement. The people at the hotel didn’t understand what was really going on, but I sat down for a good forty minutes while the children showed me all kinds of movements, push-ups and jumps that they had practiced. Being an Icelander and coming to Chile and seeing that you have made an impact is absolutely amazing,” Magnús said in an interview with Fréttablaðið in 2008.
The most resilient in the face of adversity
It is not clear what the future holds for LazyTown. The future of the company now seems to depend on what the company’s creditors do. It would probably be a great shame if this noble project that contributes to improving the health of children around the world were to come to an end. However, most people DV spoke to thought it unlikely that this would happen. However, Magnús Scheving’s obsession with management seems to deter investors from investing in the project. Interviewees say that it is necessary to get a manager who has a better business vision. But probably no one should write Magnús off. He has more energy than most people and is said to be most energetic when he has to deal with adversity.