OSW Commentary
Total Page:16
File Type:pdf, Size:1020Kb
OSW Commentary CENTRE FOR EASTERN STUDIES NUMBER 378 11.02.2021 www.osw.waw.pl The Bohemianisation of the media The acquisition of the Czech media sector by local billionaires Krzysztof Dębiec The deal finalising the sale of Nova TV to PPF on 13 October 2020 completed the process of key Czech media organisations being taken over by local capital. At the beginning of 2008, foreign entities controlled the vast majority of the Czech media market. However, a wide section of the popular press titles and radio and TV stations was taken over by domestic billionaires in the following years. They took advantage of the problems the owners of traditional media outlets had to face: both temporary (the decline in advertising revenue during the economic crisis) and structural (the increasing popularity of the Internet at the expense of the printed press). The expansion of domestic business empires in this sector was quickly branded as an oligarchisation of the media in the Czech Republic. Local billionaires treated their new assets as tools of political influence. They do not rely on the mass media as a source of profits. Instead, they use it as a means for protecting their businesses from attacks by competitors or state interference. The mass media has even become a tool for gaining or consolidating a political and business position. There are many indications that, for similar reasons, the richest Czechs are also buying media outlets abroad in countries where they do business. Foreign media corporations became the owners of the vast majority of the Czech mass media (see Appendix, Chart 1) due to the limited opportunities for development on their respective home markets, the significant resources of capital and knowledge they had, and due to the absence of restrictions on entering the Czech market. The strategy most of them used was to take over the local media in order to restructure them. Less frequently, some new titles were created (e.g. the ‘Blesk’ tabloid). The period of foreign capital expansion and competition for the Czech press continued until around 2000. It was followed by a consolidation process, which was characterised by the strengthening mar- ket position of several major foreign players and the standardisation of the offer within publishing houses. This lasted until 2008. Foreign capital in the Czech media market before 2008 The excessive presence of foreign capital in the Czech media market did not become a major issue in the public debate. However, this was criticised from time to time both at home and abroad. The European Federation of Journalists (EFJ) wrote in its 2003 report that such an extensive presence of EDITORS: Mateusz Gniazdowski, Konrad Popławski, Tomasz Strzelczyk, Szymon Sztyk TRANSLATION: Ilona Duchnowicz CO-OPERATION: Nicholas Furnival Centre for Eastern Studies DTP: Urszula Gumińska-Kurek ul. Koszykowa 6a, 00-564 Warsaw, Poland tel.: (+48) 22 525 80 00, [email protected] The views expressed by the authors of the papers www.osw.waw.pl do not necessarily reflect the opinion of Polish authorities. foreign capital prevents the Czech media from exercising a controlling function in the public sphere, as foreign investors shun controversy that could be provoked by supporting investigative journalism or criticising the government.1 It also pointed out that this state of affairs adversely affected the pluralism of opinions presented in the media. The Czech media market was criticised more harshly by the historian Bořivoj Čelovský, who argued in his books that the media, predominantly controlled by German capital, was being used to push through a ‘German agenda’ or ‘Germanisation’ of the Czech people.2 Some studies partially backed these allegations, pointing out that the journals of the German-owned publishing house Passauer Neue Presse had avoided controversial topics related to Czech-German relations.3 On the other hand, there was no evidence of pressure being exerted on the editorial staff, nor was there an excess of information favouring Germany. Most of the mass media presented a similar, positive approach to European integration, developing cooperation with Germany or the free market economy, and the stance on these issues had not changed much since the acquisitions. Czech journalists who were working in editorial offices at the time emphasise that the owners shunned political affiliations and as a rule did not interfere with the content of the ma- terials while trying to improve the financial result by influencing the form in which the content was presented. International media corporations usually did not want to be identified with any specific political entities in a given country because their direct interference with current affairs in one coun- try might affect their credibility on other markets. However, the problem of avoiding criticism from large advertisers has been noticed. For example, the main media outlets did not address the issue of the monopolistic practices used by Český Telecom, and the problems with the debt of another large advertiser, the Fischer travel agency, were reported almost exclusively by the public media.4 Economic crisis as a catalyst for change in media ownership The onset of the global expansion of websites at the expense of the press around 2000 was the first harbinger of a reversal of trends on the Czech media market. This was one of the main reasons why the share of the press in advertising revenues in the Czech Republic fell from 40% to 25% in 2000–2013 and then to 16% in 2019, while the share of news websites increased from zero to 20% and 27.5% over the same period. The loss of advertising revenues strongly affected the profitability of media outlets, which were becoming a burden for their foreign owners. Germany’s Handelsblatt claimed that it had sold its Czech assets in 2008 because it wanted to invest in internet channels on the German market due to the fact that revenues from traditional mass media had been contracting. The economic slowdown in the All the key media outlets in the Czech Republic have Czech Republic in 2009–2013 final- been controlled by local capital since last autumn. ly shattered the hopes of foreign capital that their Czech media assets could ever return to the path of sustainable profitability. This window of opportunity was used by local businessmen (see Appendix, Table 1). In 2014, the most popular radio station, Radio Impuls, was bought by Andrej Babiš, who currently serves as the prime minister. At that time, the company which used to control it had been struggling with a steady decline in revenues and profit for six years. The situation was similar with the Mafra media group, which Babiš acquired in 2013. The crisis on the media market was also used by the coal tycoon Daniel Křetínský, who took over the Czech division of Ringier Axel Springer Media the same year. The purchased assets 1 European Federation of Journalists, Eastern Empires. Foreign Ownership in Central and Eastern European Media: Ownership, Policy Issues and Strategies, Brussels 2003. 2 B. Čelovský, Konec českého tisku?, Šenov u Ostravy 2001. The next, expanded edition, was published in 2002 without the question mark in the title. 3 V. Kouřil, V. Štětka, Vlastnická struktura českého mediálního trhu s ohledem na globalizační procesy, Brno 2005. 4 See B. Petković (ed.), Media ownership and its impact on media independence and pluralism, Peace Institute, Ljubljana 2004, pp. 159–160. OSW Commentary NUMBER 378 2 included the largest local tabloid ‘Blesk’, which at that time had generated the lowest profit in five years. In 2015, VG Passau sold the largest regional daily (‘Deník’) to the Slovak-Czech investment group Penta for similar reasons. Changes that were taking place in Between 2008 and 2020, Czech billionaires took media ownership were passively over all the popular press titles, TV channels and watched by the government, dom- radio stations. inated in 2006–2013 by the right- wing Civic Democratic Party (ODS), which is opposed to state interference with the economy. However, the tax raise motivated by the desire to reduce the budget deficit adversely affected the profitability of the press: the VAT rate on newspapers and magazines was gradually increased from 5% to 15% in 2007–2013. Once the centre-right government lost power, a lower 10% rate was applied in spring 2017. The media as a springboard into politics The success of Andrej Babiš is the most striking example of the effectiveness of the strategy of gain- ing political influence by taking over the media. He created the ANO political movement in parallel to founding the media section of his Agrofert corporation (operating mainly in the agricultural, food and chemical industries) in 2011. Initially, it only published a free regional weekly. However, in 2013 it acquired a leading media group, Mafra. This made it possible for Babiš to acquire two leading opinion- -forming journals (‘Mladá fronta DNES’ and ‘Lidové noviny’) and the most popular daily newspaper in Prague (‘Metro’, which is available free of charge). This happened two weeks ahead of the election to the Chamber of Deputies, as a result of which ANO entered parliament and became the second strongest party in the government coalition. Babiš also took over the largest radio station, as well as the lifestyle media organisation which he bought in 2017 from the German company Bauer. He has been using it to improve his image (the previous owners shunned politicians). Recordings that were leaked to the public revealed that he has influenced the content published in the mass media outlets he owns. In the recordings, he suggested to journalists working for his media that they publish mate- rials discrediting his political rivals ahead of the elections. Proof of Babiš’s interference in the editors’ work includes accounts of his former employees, as well as the biased coverage of his cabinet’s crises (e.g.