International giants eyeing Polish TV station TVN

By bne IntelliNews October 20, 2014

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Media group ITI and French group Canal+ put their 51% stake in TVN - one of Poland's major television broadcasters - up for sale late on October 16. The asset is reportedly attracting international giants, a contrast with the recent trend in Central Europe in which local oligarchs have taken over media outlets.  

The majority owners of TVN said in a press release on Thursday evening that they "have been approached in recent months by various strategic and financial investors expressing an interest in acquiring the controlling stake in TVN Group, should it become available. In response to such interest, both the ITI Group and Canal+ Group have decided to jointly review their strategic options regarding the 51% stake in TVN Group."

The sale is at an advanced stage and could be completed by the summer of 2015, reported Polskie Radio. US giant Time Warner is the most likely buyer, according to Puls Biznesu, while 21st Century Fox, Discovery Communications, Bertelsmann and RTL Group are also mentioned as potential suitors. TVN is valued at around PLN3bn (€710m). 

Local power

The list of potential buyers marks the difference that the TV medium in a large market such as Poland makes. In recent years foreign owners - which jumped in to privatise media assets as the economies opened up in the 1990s - have fled as revenues declined in Central Europe, a process accelerated by the global financial crisis. Local oligarchs and politicians have snapped up the assets for the most part. 
The worry was made more concrete last year when Andrej Babis - billionaire owner of the Czech conglomerate Agrofert - bought Mafra, publisher of the best selling Czech non-tabloid newspaper Mlada fronta DNES and the influential Lidove noviny amongst others. Babis is now finance minister. Many other major titles are under the control of competing business interests, spreading alarm among journalists and some analysts. Babis is also reported to be sniffing around the two largest Czech commercial TV stations.

The latest case is next door in Slovakia. Powerful financial group Penta is reportedly on the cusp of buying Petit Press, publisher of the respected SME daily. The newspaper has had several run-ins with Penta in recent years over its reporting of the Gorilla scandal, which featured recordings of Penta's owners discussing deals with senior government officials. 

SME's editorial team walked out last week when it became apparent that Penta would win the deal for the publisher. They claim Penta is not acting primarily as a financial investor, but instead wants to use the influential SME to exert political pressure. 

Some of Slovakia's largest TV stations are also owned by closely-held and politically-connected financial groups. Claims abound that the owners of the likes of TA3 and TV JOJ have interfered in editorial decisions.

Foreign companies are still strong in Hungary, but how long they will hold out could be in question. Many might consider an exit to escape pressure from the Fidesz government. Criticised for a controversial Media Law in 2011, this year Prime Minister Viktor Orban introduced a controversial tax on advertising. 

Germany's RTL, which operates the country's largest private TV channel RTL Klub, claims the levy is unfair and specifically targets it because of its critical coverage of the government.

Local media ownership in Hungary is concentrated in the hands of supporters of Fidesz, claims Freedom House, a US NGO funded by the State Department.

RTL - Europe's largest broadcaster - has lowered its 2014 financial outlook over the issue, and on October 16 filed an official complaint with the European Commission against the ad tax.

Poles apart

Polish media has largely evaded the fate of its neighbours, according to a report named "Media and Democracy in Central and Eastern Europe" backed by the LSE and University of Oxford. 

"The largest of the CEE countries has been relatively shy of this particular type of media ownership, at least on the national level - apart, of course, from the towering figure of Zygmunt Solorz-Zlak, the second richest Pole, whose broadcasting and telecommunications empire Cyfrowy Polsat remains at the centre of his multiple business interests," the report noted. 

The key is GDP per capita, say researchers, and the subsequent ability to power advertising revenue. That has allowed foreign owners and specialised local media groups to thrive in Poland.

That said, some cracks have started to appear. The report noted Grzegorz Hajdarowicz's acquisition in late 2011 of 51% Presspublica, publisher of leading national daily, Rzeczpospolita amongst other titles.

Meanwhile, Solorz-Zlak's Cyfrowy Polsat announced on October 17 that its broadcaster Telewizja Polsat has signed a preliminary agreement to buy a 100% stake in radio station  for PLN4.3m. The new owner said its goal is to gain 1% audience share within a year from the launch of a new station, according to PAP.

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