Hungarian government reportedly looking to swell media empire further

Hungarian government reportedly looking to swell media empire further
Orban has been accused of clamping down on Hungary's press freedom
By bne IntelliNews October 26, 2016

Speculation in Hungary on October 26 suggested that after pushing the main opposition newspaper into government-friendly hands the ruling Fidesz party is already planning to further expand the pro-government media empire.

The recent closure of the 60-year-old Nepszabadsag and the sale of its publisher to a company reportedly with close ties to Prime Minister Viktor Orban sparked concerns home and abroad. The criticism, however, does not seem to have dented plans to extend the government’s influence ahead of the upcoming general elections in 2018.

"There are four sectors where national capital must grow above international one: media, the banks, energy, and retail. We are done with the first three," Orban said at Poland's Kyrnica economic forum in September. However, the PM does not seem to mind if national capital - especially that friendly to the government - continues to stake out space in Hungary's media landscape.

Unnamed allies of Fidesz are now planning to buy the Lapcom media company, Magyar Narancs reported on October 26. Lapcom publishes the country’s biggest tabloid Bors, together with large regional papers such as Kisalfold and Delmagyar.

The current owner of Lapcom is Radio Bridge Media Holdings Ltd., a company registered in the Cayman Islands. A delegation has already negotiated with the owners in London, the report claims, although it did not disclose details about the identity of the possible buyers.

Similar talks were reported ahead of the sale of Nepszabadsag publisher Mediaworks. While seller VCP claimed that buyer Opimus made an offer to acquire the publisher only after the suspension of the paper earlier this month, there had been speculation since the start of the year that Mediaworks was set to be sold to figures close to the government.

Critics note VCP's claim suggests it took just a couple of weeks to agree and organize a deal for a company with annual turnover of HUF25bn. The country’s competition watchdog then apparently needed just a matter of days to approve the takeover.

Mediaworks’ portfolio includes the Vilaggazdasag business daily, Nemzeti Sport daily and tabloid magazines. The company also recently bought Pannon Lapok Tarsasaga, publisher of regional papers in 12 of Hungary’s 19 counties. It suspended the publication of Nepszabadsag arguing that the paper has a negative impact on group results.

Many doubt, however, that there were purely economic reasons behind the shutdown of the newspaper, which recently broke stories highlighting suspicion of corruption involving a senior Fidesz official and the governor of the Magyar Nemzeti Bank (MNB), a close Orban ally. The theory was that the government demanded the immediate closure of Nepszabadsag prior to allowing the publisher to be sold to Fidesz-friendly hands.

The buyer of the paper, Opimus was originally formed from a pharmaceuticals group, and is currently engaged in a wide range of activities including property management, agriculture, media and the auto sector. Its major shareholders include Cariati Holding Ltd registered in the Cayman Islands and TAC Investments registered in Nigeria. The head of Opimus holds leading positions in various business ventures owned by oligarch Lorinc Meszaros, who is a close ally of Orban and mayor of the PM’s home town.

Opimus said in a statement that it has “no intention (..) to influence in any way the content [of papers published by Mediaworks], having regard in particular to the freedom of expression and freedom of the press,” adding that it will examine “with special emphasis how daily newspaper Nepszabadsag may be re-launched.”

However, the appointment of a pro-government journalist – currently the managing publisher of the openly Fidesz-friendly Magyar Idok - as one of the new members of the board of directors of Mediaworks only deepens fears that even if the paper is re-launched, it will take a government-friendly turn. The same u-turn has been seen at several other outlets that have changed hands since the ruling Fidesz party came to power in 2010.

Following the surprise decision of Mediaworks to shutdown Nepszabadsag, thousands protested in front of the Hungarian parliament. Left-leaning MSZP claimed that the closure of Nepszabadsag was a “black day for the press”, while small leftist DK decided to boycott parliamentary sessions in protest against the paper’s closure.

The announcement of the sale brought international concern out into the open. “The suspension and sale of Nepszabadsag show the government’s growing influence over Hungary’s media,” US government-funded NGO Freedom House said in a statement late on October 25.

“Hungary’s government uses ownership as a political tool to silence critical coverage. The EU and the United States should forcefully condemn this attack on the press,” Robert Herman, vice president for international programs at the think tank said.

While Freedom House has often raised concern over the media landscape in Hungary it rarely comments so forcefully on specific cases. In the most recent Freedom of the Press report, the NGO warned that the country’s media is only “party free”. Hungary’s overall press freedom score dropped three points in this year’s report.

Washington officials were also outspoken on the announcement of the deal. Mocking Budapest’s claims that complaints over Hungary’s press freedom are “baseless,” Tom Malinowski, US assistant secretary for democracy, human rights, and labor tweeted: “Clue: "base" = sale of #Mediaworks / #Nepszabadsag to gov't-aligned oligarch.

The government, however, is sticking by its story. "Opimus is an open, exchange-traded company. It has several owners and invests extensively. The government does not wish to comment on any Hungarian company's investments," Orban's spokesman told Reuters. 

Lorinc Meszaros - a quickly risen gas repairman - has not commented on the deal. Just a few days earlier, however, he had failed to deny an interest in acquiring Mediaworks.

“I don’t know, nothing is impossible”, he told on October 21 when asked about such a deal. He added that a couple of years ago he also would not have imagined buying hotels, so he could not exclude buying a paper one day.