Who owns the Czech media?

In 2013, voters, politicians and businessmen dramatically redrew the Czech media map. How will these changes affect the quality of Czech democracy, of which a free, independent and responsible media are an integral part? Will the media irrevocably turn into trumpets of particular political and economic interests, carriers of advertising content and meatless infotainment? Or will they, despite these developments, retain a spirit of public service and determination to truthfully represent the world around us?

Foto: CreativeCommons/ Christine GOh

The transformation of Czech society that took place in the 1990s brought about dramatic changes in the world of media. At first, it seemed that the press would return to the obsolete, pre-1948 model of ownership-publishing relations. Each of the major political parties would own a periodical and use it to assert their political agenda. Plurality would then result from the competition of their ideas. Nevertheless, the efforts of the new or newly reestablished political parties to get the journals under their control did not have a long duration. ODS, the dominant right-wing party during the 90s, managed to set up and run the Denní Telegraf (The Daily Telegraph) newspaper between 1994 and 1997. However, the demise of the Klaus government and the related loss of necessary political-economic backing brought this ambitious experiment to an end. Communist Haló noviny (Hello News) is thus — ironically – the only periodical that has succeeded in retaining its strictly partisan nature.

Business was more powerful than politics. The periodicals were first privatized by journalists or newspaper managers, only to be later resold to foreign owners. The German media industry viewed the CEE region as an interesting investment opportunity. Thanks to the generally liberal attitude and the open economic policies of the Klaus era, Germans gradually gained in the Czech Republic one of their largest market shares in Central Europe.  Yet, in parallel with the laissez-faire rhetoric, Czech citizens and politicians reflected positively on the ‘family silver,’ and belatedly they expressed anxiety about the large-scale sale of Czech companies – including publishing businesses – to foreigners. Additionally, the issue of foreign ownership had a specific national and historical dimension in the Czech context. Harsh debates on the post-WW2 Beneš Decrees, which authorized the expulsion of the so-called Sudeten Germans from Czechoslovakia, and on the relations with Germany in general, led to an obvious shortcut in the public discourse, supported by lesser or greater conspiracy theories. It was said that  Germans had ‘bought’ the Czech press [1] in order to skew Czech public opinion to the benefit of the Sudeten Germans, with the aim to force the Czech government to agree to property restitution. Eventually though, the Sudeten problem became gradually depoliticized after the Czech-German Declaration was signed in 1997, and with that, the anti-German sting, with respect to the owners of MF Dnes or Lidové noviny, also subsided. On the contrary, some editors began to appreciate that they were not existentially dependent on party secretariats and that in case of a conflict, they could turn to an economically strong and independent entity. A new danger, however, started emerging from a different side. The basic paradigm of relations between media and their owners had changed since 1989, yet the greater diversity and mass media independence from state authorities was, to a certain degree, ‘traded’ for increased media dependence on the economic system and its principles.”  Party secretariats and state censorship bodies were replaced by advertising departments. Thus, even foreign publishers could not remain immune to the pressure of important advertisers who did not like a specific article or commentary. Nevertheless, this was mostly about particular business interests, and not about a long-term political-economic agenda, which, in the new millennium, was pursued by the powerful oligarchs.

Five families

More than a year ago, Eric Best, an American journalist living in the Czech Republic, came up with an interesting typology of ‘families’ controlling the country, referencing The Godfather, the famous Mafia novel by Mario Puzo. He counted five of them – Petr Kellner, the founder and majority shareholder of PPF Group, a private equity company; Marek Dospiva, one of Penta Investments’ partners; Patrik Tkáč, the J&T investment group vice chairman of the board; Karel Komárek, the director of the investment company KKCG; and Zdeněk Bakala, the largest shareholder of the BXR Group private equity company. Best also identified two oligarchs who could match the above-mentioned in terms of their wealth and influence. These are Martin Roman, the former head of ČEZ, a major state-controlled utility company, and Andrej Babiš, the owner of the food processing and chemical industry conglomerate Agrofert, and leader of the political party ANO 2011 (and today the new Finance Minister).

Thanks to their broad range of entrepreneurial activity, stretching from financial services and telecommunications to energy and heavy industry, these families and individuals enjoy enormous economic, and thereby also political, power. The ‘family’ needs, among other things, include appropriate ‘media backing,’ that is, the ability to enforce its interests via media, or to use these to attack its adversaries. It can achieve this by hiring PR agencies or taking advantage of its advertising power, or by simply buying its own media outlet. The first one to do so was Zdeněk Bakala, who, in 2008, purchased the daily Hospodářské noviny (Economic News), and the weekly Respekt (Respect) from the German company Handelsblatt. It was no coincidence that at the same time, Bakala was underwriting the initial public offering of his mining company NWR. The prestigious daily could help protect his key business on the media front, especially when there was an emergency crisis communication, as was the case when the management of NWR announced its plans to close down a coal mine in northern Moravia. Hospodářské noviny was then more than eager to echo the official PR line of its owner that Bakala was not a majority owner of the mining company and as such was not obliged to deal with nor represent the issue in public.

Renationalization and concentration

At the end of the first decade of the 21st century, as a result of the global print media crisis and plummeting profits from advertising, long-term strategic investors began to pull out of the CEE region, turning their attention to the more promising markets of Africa and Asia. 2013 thus was the year of major shifts in the Czech media ownership structure. According to journalist and media manager Veselin Vačkov, it was only now that the interests of potential sellers and buyers had truly met. In June, the ambitious Babiš, whose party ANO 2011 had been by then fully engaged in a massive campaign for the upcoming parliamentary elections, acquired from Rheinische-Bergische Verlagsgesselschaft the dailies MF Dnes, Lidové noviny and the free daily Metro. Together, these account for 34% of the market share of newspaper readership. However, his acquisition objectives reached beyond the realm of press and the ultimate goal is to build a fully-fledged media house. After the most widely read serious daily and most listened to radio station Rádio Impuls, the next target is allegedly a TV channel with national coverage, most likely the most viewed commercial station TV Nova. In light of the success of Babiš’s ANO in the elections that brought the party six ministerial posts – including the Ministry of Finance for Babiš himself – it is precisely this concentration of political and economic power, coupled with significant media impact, that raises major concerns.

But the renationalization of Czech press by local oligarchs does not stop there. Two other billionaires, Daniel Křetínský and Patrik Tkáč, bought in December from Ringier Axel Springer the tabloids Blesk (Flash), Aha! (Look!) and Sport (as well as the weekly Reflex) that jointly represent about 30% of the market. A strange common trait of these recent acquisitions is the fact that the oligarchs overpaid for the publications significantly, since, as ironically mentioned by Best, Tkáč and Křetínský paid for Blesk and the others almost as much as Jeff Bezos from Amazon paid for The Washington Post. As a result of these transactions, only two relevant competing media were left on the national market of dailies: Deník (The Daily), published by the last remaining foreign owner VLP, with an 18% market share that makes it the second most widely read serious newspaper after MF Dnes; and Právo, with a readership of 8%.

According to his critics, the shadow of Babiš is beginning to hover also above the public media, which the politicians have always understood to be their property. The role of the converter of political influence is played by the so-called media councils, the members of which have the power to suspend the director of public TV or radio. March 2014 will mark the end of the mandate for one-third of Czech TV council members, who are mostly affiliated with the now out-of-power ODS, so one can reasonably expect a personnel earthquake in which both the Social Democrats, as well as Babiš’s ANO, will try gain control.

Media hunted by the ghost of self-censorship

This oligarchic renationalization of the Czech press – and potentially other types of media – is likely to have an interesting impact on public and political life. How will the new owners influence the content of their periodicals? What will they tolerate? And to what extent will the editorial staffs accommodate their visions? Will the readers trust the journalists of MFDnes when they write about a government in which Babiš is the Finance Minister, or their colleagues from Reflex, when they report on business activities of its owners? Consider the position taken by the weekly Respekt, formulated by its editor-in-chief Erik Tabery in a editorial from 21st September of the previous year. Tabery was asked how his weekly was going to cover the situation concerning the mining company OKD, that had just announced plans to close one of its major mines – Respekt’s owner, Bakala, is a major stockholder in the company. Tabery responded that Respekt would not cover the story. They would simply not deal with Bakala’s activities. This, of course, is the worst possible answer to the question of whether the new media ownership will destroy journalism.

A similar question mark may be hanging also over media owned by Andrej Babiš. He has been in the media business only for a short period of time, therefore, it is difficult to pass judgment. But some incidents so far can offer some clues. Only two days after his purchase of Lidové noviny had been announced, Babiš phoned one of its journalists and asked him angrily why a press conference of his ANO 2011 movement was not covered and who had made the decision. When this incident became public, Babiš backed down and promised to establish an ethical code within his media holdings to regulate the relationship between the owner and the editorial staff. More telling was the reaction of some renowned and experienced journalists at MFDnes and Lidové noviny, who resigned after the new owner was announced, including Editor-in-Chief Robert Čásenský; Tomáš Němeček, who oversaw the paper’s legal coverage; chief commentators Daniel Kaiser, Lenka Zlámalová and Martin Weiss; and investigative journalist Jaroslav Kmenta, who said, leaving his job: “Real investigative journalism will not be possible under the new owner.” And only recently one external journalist working at MFDnes was not offered future long-term contract, allegedly because he criticized Babiš for choosing a representative of the chemical industry as Minister of Environment. He also claimed that one of the chemical factories from Babiš´s conglomeate is one of the biggest polluters in the region. In order to stave off mounting accusations of partisanship and self-censorship, Babiš employed as editor-in-chief for MFDnes another big name in the Czech journalism – Sabina Slonková. She did her best to disperse any doubts that MFDNes would lose its independence and asserted that journalists under her leadership would investigate Babiš´s political or economic activities as everyone else´s.

The key long-term issues of the Czech media may consequently be self-censorship, enfeebled credibility and the public’s suspicion that editorial staff favor their patrons. The journalists themselves will have to defend their professionalism, based on impartiality and independence, in order to retain and regain the trust of their readers. Free, independent and professional media are essential for public control of the political process, yet nowadays the Czech commercial and public service media seems to be under a double attack, led from one side by powerful business oligarchs and from the other side by eager-to-control politicians.

[1]  The dominant corporations active on this market come, with the exception of Finnish Sanoma, from the Federal Republic of Germany – Passauer Neue Presse, Burda Verlag, Heinrich Bauer Verlag, Rheinisch-Bergische Verlagsgesellschaft, Axel-Springer Verlag or Verlagsgruppe Handelsblatt – or other German-speaking countries (Swiss Ringier).

Jan Adamec

Jan Adamec

is editor of the V4Revue, historian and political scientist. His area of expertise is the history of Hungary, USSR and Czechoslovakia 1948 – 1957. He graduated from Central European University in Budapest and Charles University in Prague where he currently completes his PhD degree with thesis about the Hungarian uprising in 1956.