The next board of directors meeting of Central European Media Enterprises (CME) will gather several new faces. A new chairman and three board members were appointed at a special general board meeting in Bermuda, where CME is tax domiciled, last week (April 14). The appointments follow the mid-March exit of company founder Ronald Lauder as non-executive chairman and board member.
Former Time Warner Cable COO John Billock was named non-executive chairman. The three new directors are Time Warner people: Gerhard Zeiler from Turner Broadcasting, Iris Knoblock from Warner Bros. France and Doug Shapiro from Time Warner. Time Warner has increased its shareholding in CME through several capital injections and holds a voting share of 49%.
Operating television channels – plus production houses and a few radio stations – in the Czech Republic, Slovakia, Bulgaria, Romania, Croatia and Slovenia has been a challenge between recessions and digital transition, certainly not specific to CME. Finding a stable footing has been a struggle. Company CEO Adrian Sarbu was discharged last August and replaced by co-CEOs Michael Del Nin and Christoph Mainusch, both known as change agents with ties to Time Warner.
Country directors have been replaced, some managers and staff following. In Romania, where CME owns the Pro TV franchise, new director Aleksander Cesnavicius irritated the news department by taking up an office next to award winning news director Gabriela Popescu. More impolitic, last week, was informing staff members that the traditional Easter bonus, RON 500 (about €110), must be returned or it would be deducted from the next pay period, reported reportervirtual.ro (April 17). Those who returned the money were given nice cakes. Some staff members responded by making equal donations to an orphanage.
Former CME board member Igor Kolomoisky made a bit of news in Ukraine this week. After being named governor of the Dnipropetrovsk Oblast, Mr. Kolomoisky offered cash to pro-Russian militants in return for their guns and buildings seized. In 2007 Mr. Kolomoisky, a banker by trade, invested US$110 million in CME, brought along TV channel Studio 1+1 and took a board seat. He exited the CME board on acquiring 100% of the Ukraine broadcast assets in 2010.
Digital radio of the DAB variety is “well on its way” to reaching the required 50% listening threshold triggering a shutdown of the FM platform for national and regional broadcasters,” said DAB support group Digital Radio Norge director Ole Jørgen Torvmark, in a statement quoted by Kampanje (April 11). The Norwegian government approved a switch-over from FM to DAB for all but local radio stations in 2017 if the threshold is met by next year. A TNS Gallup survey conducted between October 2013 and March 2014 for Digital Radio Norge indicated 45% of radio listeners using DAB receivers.
Public broadcaster NRK has led the DAB charge, adding coverage and channels. Commercial broadcasters have followed, clearly seeing the handwriting on the wall. Local radio stations will remain on the FM band regardless and, interestingly, newspaper groups have acquired several, clearly seeing the handwriting on the other wall. (See more on digital radio here)
Norway’s Culture Ministry set four basic requirements for DAB migration: national and regional commercial DAB coverage must reach 90% of the population, “digital radio services must represent added value to the public,” half of Norway’s radio listeners must be using DAB services daily and radio reception in automobiles must be “reasonable and technically satisfactory.” If all are in place, including the rather vague automobile reception requirement, Norway will be the first to, more or less, switch off FM.
A purchase and sale agreement for the assets of New Bulgarian Media Group (NBMG) has been signed, according to local reports, with Dublin-based Media Maker Limited. NBMG publishes several newspapers and is principally owned by one of Bulgaria’s most colorful media owners, Irena Krasteva. Media Maker Limited is linked to former Communicorp CEO Paddy Halpenny, said Capital.bg (April 11).
Bulgarian media watchers have long had their eyes on Mrs. Krasteva, who entered the media business after running the state gambling agency. She may or may not have controlled television channel TV7. And she may or may not have financed NBMG through Corporate Commercial Bank, owned by the equally colorful Tsvetan Vassilev. Everybody denied all entanglement after the Economist (March 4) published a description of former TV7 news anchor Nikolay Barekov’s political entry with an anti-corruption and populist platform. (See more on media in Bulgaria here)
Mr. Halpenny exited Communicorp at the end of 2012 after leading expansion through acquisition in several Eastern European markets. The company has exited almost all non-Irish broadcast holdings, stations in Bulgaria and Latvia remaining. Media Maker Limited registered for business in Dublin two days before the agreement for NBMG assets was announced with Mr. Halpenny and Irish hotel owner John Raymond Phelan as directors.
The economics of journalism, more times than not, is a subject near and dear to media owners. Journalists, too, think about economics, in a personal way. Media watchers have long witnessed the negative effect on journalism from practitioner’s economic insecurity, integrity at odds with the “brown envelope”.
Media owners in Slovenia benefited from €500 million in government subsidies in the ten years from 2002, said media watcher and academic Sandra Basic Hrvatin to a recent meeting of journalists in Ljubljana. ”Only cows have been more subsidized,” she added, reported by public broadcaster RTV SLO (April 12). “Where did this money go?”
Slovenian journalists working full-time earn €1,200 monthly on average, the conference of the Association of Slovenian Journalists and the Trade Union of Slovenian Journalists was told, while some media owners take home significantly more. Part-time status, always criticized by unions, has become the norm for many media workers, benefits and pension contributions disappearing.
“Precariousness has become a business model,” suggested Ljubljana law professor Luka Ticar. “For employers, it’s cheaper.”
Poland’s public television broadcaster TVP has selected an outsourcing firm to take at least 400 employees, between 12% and 15% of its workforce. For a decade various TVP management teams have attempted to reduce the full-time headcount, more often than not falling to stiff union resistance. A final agreement with outsourcing vender LeasingTeam is under construction and is expected to take effect in July.
Employee outsourcing is relatively common in the private sector, commonly used to reduce benefit and pension costs for lower-level workers. According to local sources, the outsourcing firm will employ graphic designers, makeup artists and some newsroom staff under a two-year contract, intention being to persuade workers into independent contractor status. TVP is officially owned by Poland’s Treasury Ministry, always under pressure to reduce public service costs, and reported a €4.9 million loss in 2013. First year savings is expected to be about €1.5 million. (See more on media in Poland here)
Unions aren’t pleased, criticizing the TVP Board for choosing the outsourcing option over negotiations. “It’s a scandal on a global scale,” said trade union Polish Vision chief Barbara Markowska-Wojcik, quoted by Wirtualnemedia.pl (April 11). Unions staged a one-hour work stoppage in February when the outsourcing tender was announced.
In parallel with attempts at reducing TVP’s workforce have been suggestions of eventual privatization. The bulk of TVP’s revenue stream is from advertising and program sales. Despite a recent history of top management turmoil TVP continues to produce a world-class output and enjoys considerable popular support.
From Last Weeks ftm Tickle File
Big Swiss publisher Ringier has acquired the shareholding of the other big Swiss publisher Tamedia in Swiss-French regional daily Le Temps, said a joint statement (April 11). In mid-2013 the Swiss Competition Commission (COMCO) ordered a change in ownership after Tamedia acquired most Swiss assets of publisher Edipresse. Transaction terms were not disclosed but estimated at less than CHF 10 million, roughly four times revenues.
Le Temps was formed in the late 1990’s by the merger of Journal de Geneve, owned by the local bankers association, and Le Nouveau Quotidien, Lausanne daily majority owned by Edipresse. No expense was spared in the Le Temps start-up, the publishers intended journalistic if not business competition for Zürich daily NZZ. Tamedia, which began a long and deliberate acquisition of Edipresse assets in 2009, owns three competitive dailies in the French-speaking region of Switzerland. French daily Le Monde continues to hold a 2% stake as do Le Temps employees in aggregate. Geneva banker Claude Demole holds a 3% stake, leftovers from the Journal de Geneva.
“Reluctantly we have separated ourselves from Le Temps, “ said Tamedia chairman Pietro Supino at a press conference hastily called after the deal had been leaked. Though Ringier CEO Marc Walder called the transaction “a matter of heart,” reluctance also in evidence. Several rich people circled around Le Temps after COMCO pushed for Tamedia to either divest or fight on in court. None came up with the cash; asking price at the time roughly twice the estimated final figure. Tamedia will continue to print Le Temps under contract through the end of 2016.
Spain’s digital TV broadcasters are preparing to shutdown nine channels as ordered by a Supreme Court (Tribunal Supremo) decision. At the end of March the Ministry of Industry ordered broadcasters to comply by May 6th. The broadcasters, including Atresmedia and Mediaset, are not pleased.
The Supreme Court ruling voided digital terrestrial television licenses “not having been granted through tender” by authorities of former Prime Minister José Luis Rodríguez Zapatero in 2010. Commercial TV broadcasters association UTECA broadsided against the Ministry of Industry deadline as “unprecedented, without any known antecedent in democratic countries…drastically reducing audiovisual pluralism and meaning serious injury to the principles of legal certainty,” quoted by El Mundo (March 27). (See more on media in Spain here)
Responding to UTECA the Ministry of Industry said it was correcting “actions of a previous government…of dubious legality,” reported EuropaPress (April 7). The Supreme Court order specified hefty fines for non-compliance.
“Something is wrong,” said Atresmedia vice president Mauricio Carlotti, quoted by EuropaPress (April 9). “The digital dividend, releasing the 800 MHz band for 4G telcos, has nothing to do with the closure of nine channels. The Ministry of Industry forgets to consider eight years of work and investment to move from analogue to digital and that error is fatal.”
In a clear sign that the battle over news coverage in Russia is reaching some sort of pinnacle, the Russian Federation’s chief propagandist Dmitry Kiselev informed the US Broadcasting Board of Governors (BBG) that the contract to carry Voice of America (VOA) in Moscow has been cancelled. “We are not going to cooperate,” said Mr. Kiselev, in a one-sentence letter to the BBG dated March 21st. In a separate comment, Mr. Kiselev referred to VOA as “spam on our airwaves.”
“We urge Mr. Kiselev and other Russian authorities to open Russian airwaves to more of our programs and those of other international broadcasters,” said BBG chairman Jeff Shell in a statement on the BBG website (April 4). “We’re asking for an even playing field,” he added, noting that Radio Voice of Russia, under Mr. Kiselev’s control, in broadcasting in New York City and Washington DC.
Mr. Kiselev is best known in Russia as a well-known fire-breathing TV talk show host, vamping on various anti-Western conspiracy theories. In December Russian Federal president Vladimir Putin elevated him to head of Russia Today, which now includes the international TV channel of the same name, news agency RAI Novosti and international radio broadcaster Radio Voice of Russia. (See more on media in Russia here)
The European Union added Mr. Kiselev to its list of Russian figures sanctioned (March 20) after the take-over of Crimea. Mr. Kiselev had planned to attend a media conference in Norway at the end of the month but the Norwegian government declined to issue a visa, reported thelocal.no (April 7). Mr. Kiselev referred to the visa rejection as restricting his freedom of speech, to Izvestia (April 4), plus it ruins his vacation. The Barents Press organization, representing journalists from Norway, Sweden, Finland and Russia, called the Norwegian Foreign Ministry decision “a shame.”
TV channel “broken to bits”
Second verse, same as first
As tensions rise in eastern Ukraine, news media is again a target. Prior to the Russian invasion of Crimea, local broadcast outlets were set upon, forced to replace local programming with Russian channels. Monday a group of “unidentified persons” with bats stormed offices and studios of Kharkov TV channel ATN demanding on-air time. Refused that, the offices and studios were trashed before police arrived.
“We will be unable to get on the air today or in the coming days as all hardware is completely broken to bits,” said a station spokesperson, quoted by Telekritika (April 8). The attackers pressed station manager Oleg Yuft to resign, which he refused. “They said they know where he lives, know all about his family and will put pressure on him. In addition, the attackers took some personal files of employees, addresses, copies of passports and other data.”
About 30 police continue to guard the Kharkov tower and transmitter facility after evicting “unidentified persons” Monday night (April 7) demanding Russian language channels replace Ukrainian channels. Earlier on Monday “armed men” attempted to enter Donetsk regional state broadcaster RSTBC but police chased them away. (See more on media in Ukraine here)
Two and a half years ago ATN (Agency of Television News) was pulled off the air for failing a “sanitary” inspection. The channel had broadcast news reports critical of Kharkov mayor Gennady Kernes and regional governor Mykhailo Dobkin. Mayor Kernes and ex-governor Dobkin briefly disappeared when deposed president Victor Yanukovich removed to Russia. They have since returned.