- Title: Orban allies tighten media grip ahead of Hungary election
- Date: 6th December 2016
- Summary: (SOUNDBITE) (Hungarian) DELMAGYARORSZAG EDITOR IN CHIEF, ZOLTAN KOTI SAYING: "It looks a lot like this full-court pressure will reach Lapcom sooner or later, this is definitely on the cards. And it is clear that it is not market-driven. Prices have become abnormal. Companies are sold at 8-10 times EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization). To pay such a price in Hungary for a media company with a printed press portfolio is not normal, they can never recover that investment from the market." VARIOUS OF JOURNALISTS WORKING IN DELMAGYARORSZAG NEWSROOM (SOUNDBITE) (Hungarian) DELMAGYARORSZAG EDITOR IN CHIEF, ZOLTAN KOTI, SAYING: "The motivation is likely political. There will be elections here in May 2018. So if this is really an ordered intention to rule the whole media world, then Fidesz logically wants to grind all of us up by then."
- Embargoed: 21st December 2016 14:09
- Location: SZEGED, FELCSUT, BUDAPEST, HUNGARY
- City: SZEGED, FELCSUT, BUDAPEST, HUNGARY
- Country: Hungary
- Reuters ID: LVA0035BQYEK9
- Aspect Ratio: 16:9
- Story Text: People close to Prime Minister Viktor Orban are increasing their control over Hungarian media, raising concerns among government critics and international bodies over press freedom as an election approaches.
Some journalists who spoke to Reuters said they were alarmed last month when the Austrian owner of Hungarian media group Mediaworks closed Hungary's largest opposition daily newspaper and sold the rest of the group to an Orban ally.
Mediaworks suspended the 70-80 staffers at the leftist Nepszabadsag, then the new owners dismissed most of them and brought pro-government editors into other group publications. Mediaworks CEO Gabor Liszkay declined to comment.
Orban's drive for media supremacy began with a restrictive media law in 2010, continued with subjugation of the public broadcaster and entered a buyout phase when Orban fell out with his former ally, media baron Lajos Simicska, in early 2015.
By now, Orban's allies rule supreme, and they are expected to grow their holdings in time for the election campaign ahead of a 2018 parliamentary elections.
Mediaworks is the largest player in the provincial press by far, with a mandate to grow bigger.
Two of its three competitors seek buyers, setting up the prospect of a near-monopoly.
Russ Media, a family business of Austrian businessman Eugen Russ, holds three dailies in north-eastern Hungary and Lapcom, controlled by London private equity group Elliott Advisors, publishes two regional dailies and a national tabloid.
Russ has planned to leave the market for years, sources in the industry told Reuters on condition of anonymity and one source said he is already in talks with a buyer. Russ did not reply to repeated requests for comment.
Lapcom is also for sale at the right price - and there may never be a better time to get one.
"It looks a lot like this full-on pressure will reach Lapcom sooner or later; this is definitely on the cards. And it is clear that it is not market-driven. Prices have become abnormal," says Zoltan Koti, editor-in-chief of Delmagyarorszag, a Lapcom daily in southern Hungary.
"The motivation is likely political. There will be elections here in May 2018... Fidesz logically wants to grind all of us up by then."
Company filings link Mediaworks' new parent company - a publicly traded holding group called Opimus - to Lorinc Meszaros, a former pipe-fitter and now mayor of Orban's home village Felcsut. He is close friends with the premier.
Meszaros has denied links to Mediaworks or Opimus, but days before the Opimus takeover he told local news channel Hir TV that he could buy media assets at any time.
"Anything is possible," he said when asked if he plans to buy a newspaper or television station.
Meszaros, who has become a billionaire oligarch with firms in construction, tourism and the media since Orban took power, did not reply to repeated Reuters requests for comment.
If both Lapcom and Russmedia are bought it would leave small Nogradi Naplo, published in 4,500 copies in northern Hungary, as the only regional newspaper in the country with no clear ties to Fidesz.
"The public sphere structure of the late Kadar era (last communist leader era) is being re-built in the fine details as well. Now everyone on the government side says that in Hungary the press freedom is perfect because anything can be written down. And this is true exactly, indeed anything can be written. But they forget a 'tiny' point, namely, that the freedom to view content has little to do with the freedom to access it," Lapcom CEO Ferenc Pallagi told Reuters.
After Orban fell out with Simicska, he called on supporters in a radio interview to invest in media. Several top associates answered his call.
Since that parting of the ways, figures close to Orban have assumed prominent roles in the media industry after he used a broadcast interview to urge his supporters to invest in the sector. Those who support the ruling Fidesz party, he told Echo TV in May last year, should put their "personal and financial" energy into creating new media outlets.
Within a year, his closest political communications adviser, Arpad Habony, started Modern Media Group, which disseminates tabloid content on websites and free papers.
Andrew Vajna, the former Hollywood producer of the Rocky and Rambo movies and now the government's film commissioner, took over Hungary's No. 2 television group and acquired radio licenses.
A group of business associates with personal, financial or family connections to central bank Governor Gyorgy Matolcsy, another Orban ally, now runs two prominent news web sites. Liszkay, a former Simicska associate, bought a business newspaper which now backs the government after a makeover.
None of these entities or individuals had any comment in response to multiple Reuters inquiries about their ownership of, or influence over, the media.
Several outlets controlled by Fidesz sympathisers can function in sync, borrowing politically charged content across this wider network, especially about opposition politicians.
The radical nationalist Jobbik party's chairman Gabor Vona has found himself in the crosshairs of that network recently, with untrue reports of brawls at a party event or his private life reverberating across several outlets.
Vona, Orban's main challenger, put it down to government attempts to divert attention away from corruption.
The government works hard to deny involvement in the media transformation. Orban's spokesman rejected suggestions of undue government influence over the media.
"[O]wnership of the media has nothing to do with the issue of press freedom, we are talking about a different thing," government spokesperson Zoltan Kovacs replied to Reuters recently at a government press briefing.
"If it is not a problem elsewhere, why is it a problem always in Hungary?"
The new media companies often receive large amounts of advertising from the government, which has an $85 million annual advertising budget, making it the single largest player in the ad market, which totalled $3 billion last year in list prices before discounts.
According to media analyst Agnes Urban, head of the Mertek Institute in Budapest, that is probably the point.
"We are heading more and more towards the harsher methods, we are not talking about applying simple pressure but essentially about occupying the entire media."
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