David Binar in Prague -
Almost 25 years after the Velvet Revolution, the Czech Republic, like other countries in the old Soviet bloc, is seeing a concentration of ownership in the media that many fear is its “oligarchisation”. But new, mostly internet-based outfits, many led by disaffected journalists, are springing up to counter this worrying trend.
The man who triggered the talk about oligarchisation and personifies the trend is Andrej Babis. Slovak by birth, Babis is today a Czech citizen, minister of finance and billionaire owner of the Agrofert group – a conglomerate of companies active in the agricultural and chemical sectors.
Angry at the dire political situation in the Czech Republic and the ubiquitous corruption, he formed his own political party called ANO (“Yes”) in 2011. The movement succeeded in the parliamentary elections in October 2013, becoming the second strongest political party in the country and making Babis finance minister and vice-premier of the coalition government.
Alongside this success came something more worrying in 2013. In a surprising coup, he succeeded in acquiring Mafra, publisher of the best selling Czech non-tabloid newspaper Mlada fronta DNES, the influential daily Lidove noviny and other media, turning him overnight into a media tycoon. The combination of commercial, political and media power in one person makes Babis probably the most powerful person in the country.
The public doesn’t seem to care much about his numerous conflicts of interest, but obviously it is more of an issue for journalists as well as for his political and commercial opponents. It’s probably not by chance that only weeks after Babis’ Mafra deal was announced, the billionaires Daniel Kretinsky and Patrik Tkac, who earned their first millions with the Slovak investment group J&T, acquired the publishing activities from the German-Swiss Ringier Axel Springer CZ with its popular tabloid dailies Blesk, Aha and Sport, and the popular weekly magazine Reflex. According to its new owners, the Czech News Center – as it is called today – is the largest media outlet with the most readers on the Czech market.
However, the first of the country's so-called "godfathers" (there are seven, including Babis) to become an important media owner was the financial investor Zdenek Bakala, who in 2008 bought the publishing house Economia from the German Verlagsgruppe Handelsblatt for what was considered a premium price of between €70m-90m. This deal means he owns the influential economic daily Hospodarske noviny and the opinion magazine Respekt, as well as other specialised and electronic media.
Bakala's acquisition began this new era that replaced the previous one of the 1990s, when Czech media outlets were often sold by the new post-communist management to foreign publishers. At that time concerns were raised about the "Czech family silver" being sold to German companies; reading between the lines lay fears about revisionism over World War 2. This was never proved, with foreign owners appearing only concerned about financial results and not about the content of their publications, but the fear of media being used for some hidden agenda has lingered.
Today, concerns are being raised again, but this time the fear of German revisionists endangering media freedom has been replaced by domestic oligarchs using their media power to support commercial and/or political interests. Arguably, there's probably more grist for the mill here.
"The concentration of major print dailies in the hands of two business magnates, one of whom fared well in the 2013 general elections, points to growing ties between business, politics, and the media," US watchdog Freedom House said in a recent report on the state of democracy in the post-Soviet bloc.
When Babis announced his Mafra deal in June 2013, he promised not to interfere in his journalists’ work. “If I wanted to influence media, the journalists would tell each other and I’d be a dead man,” he wrote on his Twitter account.
Actually, this promise lasted only a few hours. The very next morning he called a Lidové noviny reporter to enquire why the daily hadn't reported on an ANO press conference from the previous day. “I hope the boys know what they’re doing. They probably don’t know who they have the privilege to deal with,” he reportedly told the journalist, referring to the newspaper’s management.
To be fair, that is the only known case of Babis' interference with Mafra media, and he has since done much to emphasise their independence. The new editor-in-chief of Mladá fronta DNES, the well-known and respected journalist Sabina Slonkova, took on the role of guaranteeing the daily’s independence and she doesn’t tire of saying that any interference by Babis would result in her immediate resignation.
She confirmed her stance to bne, reiterating that Babis doesn't interfere with the paper's news coverage. “If there were any interventions, I wouldn’t be working here,” says Slonkova, adding that she doesn't even see any self-censorship tendencies among her colleagues. “On the contrary, from time to time they're even more critical in order not to be accused of siding with the newspaper's owner.”
Even so, most journalists from outside Babis' media empire find it hard to believe in Mafra’s total independence.
A different approach was taken by Bakala's Economia. Their declared policy is to tackle their conflict of interest head on and simply not write anything about their owner’s activities. This approach is criticised as highly problematic given Bakala’s huge economic influence. Bakala is the owner of the country's largest coal miner, New World Resources, and the major employer's rocky finances have recently become a political hot potato.
The renowned independent journalist and media expert Karel Hvizdala believes the media becoming more of a business and being bought up by domestic billionaires is not in itself a bad thing. “This happened in Germany after WWII, the media in the USA are mostly owned by big corporations,” notes Hvizdala, who in the wake of Babis buying Mafra cooperated in the writing of a publishers' code that seeks to formalise editorial independence of their media assets. What is bad, he says, is when you combine politics and business in media ownership.
What the future holds
Few experts believe that the media shopping spree is over. Babis is reportedly interested in extending his empire to the most influential media – television.
The finance minister is said to have led negotiations with the owners of the two largest Czech commercial TV-stations – TV Nova, owned by Central European Media Enterprises (CME), founded by Ronald Lauder and now part of Time Warner, and FTV Prima, owned by the Swedish Modern Times Group (MTG). Despite claims from all parties that the owners have no intention of selling, experts still expect changes in ownership in the segment over the next few months.
In May, weekly news magazine Euro (owned by media tycoon Frantisek Savov) reported oligarchs and coal barons Jan Dienstl and Pavel Tykac were looking to set up their own TV station to counter Babis' influence. According to the magazine, the two businessmen intend to spend CZK2bn (€73m) to establish the broadcaster, and CZK2bn annually on the production of programmes.
An important player in this area is the public Czech Television (CT), whose news programmes are closely monitored by politicians, the Council for Radio and Television Broadcasting, and the Czech Television Council. The members of these institutions are approved by parliament and represent the political parties. Questions about political interference in news programmes crop up regularly, as well as journalists leaving and blaming politicians for their departure. The Freedom House report states that, "The election campaign [in October 2013] also featured attempts to curb editorial freedom at the public television broadcaster."
According to Hvizdala, the state-owned media – Czech Television and Czech Radio – have lost their oversight function of the political elite and have instead become what he calls “parliamentary media” – ie. mouthpieces for the parliamentary parties.
The recent changes in media ownership have subsequently led to journalists moving between existing media outlets and to the foundation of new, mostly internet-based media.
A number of journalists left Babis' Lidove noviny to establish the news server Echo24.cz, while Deník Referendum unites left-oriented journalists and publicists who feel they lack opportunities to present their views. Former Mladá fronta DNES editor-in-chief Robert Casensky has announced the launch of an investigative monthly magazine for September; unlike other media start-ups, his Reporter is supposed to be printed.
Ultimately, say experts, it's hard to believe that the new owners of the mainstream media won't seek to influence the output of their new assets.
The situation of the traditonal media in the Czech Republic is no different to that elsewhere in the world: falling circulation, viewers and listeners, and a desperate scramble to counter that trend and to at least stabilise revenues. It’s hard to believe the new owners weren't aware of this situation when they acquired their assets, even as they claimed to be making these acquisitions primarily for business reasons. With the assets losing money and relevance, it's only natural they will try to maximize any remaining influence these outlets still have.
However, this influence won't always work out as expected - as Babis found to his cost in April when his Mlada fronta DNES published a series of articles about the role of the current Prime Minister Bohuslav Sobotka in a privatization scandal in 2004.
Sobotka was finance minister when the Czech government sold the mining company OKD for a suspiciously low price, and some were predicting that the whiff of corruption would be enough to force the PM to step down. But because political foe Babis owned the paper making the allegations, Sobotka could claim the allegations were made up to harm him and his Social Democrat party. No other media pursued the issue and Sobotka remains in his post, occupying the premiership that Babis covets.
bne IntelliNews - The Visegrad states raised a chorus of objection on November 10 as the UK prime minister demanded his country's welfare system be allowed to discriminate between EU citizens. The ... more
bne IntelliNews - Following a smorgasbord of acquisitions in late summer, China Energy Company Limited (CEFC) is eyeing yet another small Czech purchase, with food ... more
Benjamin Cunningham in Prague - Even as the Czech governing coalition remains in place and broadly popular, tensions between Prime Minister Bohuslav Sobotka and Finance Minister Andrej Babis remain ... more