Business and politics rule over press freedom
Media is set to consolidate as a new empire lays its foundations: but don’t expect press freedom to be the winner
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Media in Romania is consolidating into large groups mostly owned by local businessmen, while small publications and TV stations are up for sale.
Yet there are still wealthy businesspeople poised to enter the media market as a new player rises in the Confort Media Group.
Consolidation of the media may bring more professionalism to the industry, but it could also place key news outlets in the hands of businesses with interests outside of reflecting a true picture of Romania.
Ioana Avadani, executive director at the NGO the Centre for Independent Journalism (CJI), believes that a concentration of the media market is necessary.
“Romanian media was born at the beginning of 1990s without a vision or development strategy,” she says.
Although radio and TV stations are regulated by the National Audio-Visual Council (CNA), outside of granting licenses, this body has a passive role. In the print media, anyone with a printing press and access to the market can publish a magazine. Due to these factors, the market in Romania has become saturated with many small and barely profitable players. On a national scale, there is also a glut of publications. There are 15 national dailies in Romania – five more than in the UK. This is despite a lower advertising revenue and readership per capita in Romania than in Britain.
However the press’s growth has been assisted by a growing advertising market, which has developed as purchasing power increased. This year the total advertising market is set to rise by 20 per cent to 600 million Euro, according to the Open Society, with half of this figure going to TV spots.
But this is not a perfect free market system of demand for media and advertising space supporting trusted publications and TV stations.
Despite growing ad revenues, daily newspapers and business publications are losing money. One profitable exception is the best sold daily in the country, Libertatea, with over one million readers. Most newspapers are supported by TV channels, niche services or other businesses and interests. Print media is a loss-leader.
“There are many media groups which are financed by other businesses of the owner such as oil,” says Ioan Margarit, editorial director of on-line daily Hotnews.
In Romania, media is a resource for politicians and, until 2005, they or their sympathetic supporters bought up media groups. Most major media owners have close connections with business or political circles and use TV and press as platforms for political aims and objectives. In some situations, the press is a tool for businessmen to find sympathy with public figures and journalists in order to stay out of prison, in others, it is a forum for blackmail.
“Media companies in Romania have developed and still operate on political criteria supported by economic interests,” says Avadani.
The bulk of the media is owned by several influential businessmen. These include Sorin Ovidiu Vantu, a controversial figure who has evaded prosecution for allegations of defrauding 100,000s of Romanians in a mutual funds scam. There is also oil and gas group Rompetrol’s ex-majority owner Dinu Patriciu, businessman Bobby Paunescu, Viorel and Ioan Micula, owners of European Food&Drinks Group, and media guru Adrian Sarbu.
“There are also leaders of political parties, MPs or businessmen with strong political interests, ties or ambitions who wield their media outlets like broadswords,” reads a report by the Open Society.
For example, former Senator Dan Voiculescu, the founder of the Conservative Party, exerts powerful influence on the media group he founded, Intact, which now controls TV stations Antena 1, 2 and 3 and newspaper Jurnalul National.
In May 2007, during a political show on Antena 3, Voiculescu was allowed to phone in unexpectedly and insult ex-Minister of Justice Monica Macovei, stating she was ‘pretending to be a virgin’. These national TV stations regularly carry news of Conservative Party conferences and policy decisions, despite the party polling only two per cent in elections. Many other parties, such as the Social Democrats, court the Conservatives because it is understood that this could help them secure positive coverage on Intact’s TV stations.
New business player
Some companies are unabashed in stating they want to promote their businesses through a media outlet. Funded by a hotel, real estate and building material business, the Confort Media Group has started its activity through a free daily newspaper in Bucharest, the tabloid Ring, with a print run of 100,000. In July the owners, Ionut and Robert Negoita, obtained a license for a new TV channel called Ring TV, which will launch by Spring 2009.
The group is planning a radio station, a paid-for quality daily newspaper and two niche magazines targeting the tourism market and women.
“Ring is distributed only in Bucharest in the metro, in hypermarkets and newsrooms and it addresses all social demographics,” Ionut Negoita told The Diplomat.
He plans to extend Ring’s distribution to large cities in Romania with a print run of 400,000. However Hotnews’s Margarit argues that a tabloid needs to print at least one million copies to be successful.
How much does this cost? Negoita says he will pay about three million Euro to acquire a new printing house. “To launch a TV channel costs about five million Euro, but the operational spending will be much more significant – about 30 million Euro in the first two to three years,” Ionut Negoita says.
He expects the TV channel to make a profit in the sixth year of broadcasting.
“Media is a tool which makes the owner matter in society,” says Negoita. “It can make him be heard and listened to. Firstly [with our media] we want to do business and secondly we want to lobby mainly for our other businesses.”
In Romania some companies take on the cross-media funding structure of organisations in the west. The print business of Swiss group Ringier is profitable and, aside from Libertatea, the group owns one of the best-branded newspapers in Romania, Evenimentul Zilei, free Bucharest newspaper Compact and lifestyle and business magazines.
With a broad base, a group can make a profit from some publications and loss with others. In such a structure, some products act as a ‘prestige’ publication, which bring a loss for the company, but gain credibility and power for the group.
Diversity is key. An integrated media group which owns TV and radio stations as well as newspapers and on-line publications will be the most successful. Large media groups can move their profit from one business to another and can make a combined advertising offer. This means smaller publications often only have the chance to be profitable if they focus on a niche.
Ready for sale
Some smaller players are ready to be snapped up. TV channels such as National TV and N24, owned by European Foods founders Viorel and Ioan Micula and chat show TV station OTV were rumoured to be on sale at the end of 2007. Another example is Business Media Group, which controls publications Business Review and BusinessWeek Romania and which has been available on the market for about three years.
Online news in Romania is still in its infancy, but with ad revenues increasing on the web, this is where cash in the future could be made. “Internet holds the future because it offers the whole package: written, audio and video,” says online newspaper Hotnews’s Ioan Margarit.
Hotnews targets readers between 25 and 44 years old with graduate education. It supports itself through advertising and turned a profit in 2006, after two years on the market. Access to the website is free. “In Romania people are not used to paying for information,” says Margarit.
Freedom quashed
Freedom of the press in Romania has suffered since 2000. During the Social Democratic (PSD) government, which ended in 2004, much advertising revenue depended on the Government. It tended only to grant ads to media outlets favourable to the party. Thus media groups orientated their editorial line in support of the PSD to capture revenues.
After 2004, when the DA Alliance of the National Liberals and Democratic Party won power, restrictions on the press loosened. This was also at the behest of Brussels, which encouraged a free media as a condition of Romania joining the EU.
But since Romania entered the EU in 2007, this honeymoon has been coming to an end. “In the last 18 months the pressure to be fair and democratic and to think freely has disappeared,” Avadani argues.
For example, in 2007, Social Democratic politician Alexandru Sasu was appointed president and general manager of the Romanian public television company SRTV, which owns TVR1 and TVR2. This was the first time since 1989 that a politician with a leading position from the largest party in Parliament controlled the marketing, advertising and editorial of public news. There was not even the pretence of independence.
MPs have decided to punish with prison sentences journalists working for TV stations which broadcast images of people without their approval. The decision was taken after a report was broadcasted on public channel TVR1 with then-Minister of Agriculture, Liberal Decebal Traian Remes, taking a bribe.
Meanwhile, the Parliament has voted for slander to become a criminal act, as opposed to a civil infraction. This means journalists could risk prison time if they print something untrue, even if this was not their intention. No reporters have been locked up yet, but the threat is clear.
Last June a bipartisan bill was proposed in Parliament declaring that all news programmes should broadcast an equal number of positive and negative news stories. This brought condemnation as a clear attempt to meddle with the free expression.
“The Parliament’s intention to reduce the transparency and the freedom of the media and of the journalist is clear,” says Avadani.
Report by Ana-Maria Nitoi
TV rules but loses ground
Romania has an inflated audience share for TV compared to other European countries. “Romania has the characteristics of a third world country in terms of media consumption because in Europe only us and Albania have an 80 per cent audience for television,” says Ioan Margarit, editorial director for online newspaper Hotnews. However in the last three years TV stations have lost about ten per cent of their audience. Now around 3.5 per cent of the Romanian audience uses the Internet as a primary source of news. This figure is increasing. Radio accounts for about five per cent. Print is second to TV with eight to nine per cent, but is losing ground to the Internet. “There is a migration from news consumption from print to computers and mobile phones,” says Margarit.Media: who’s in charge?
Although transparency of media ownership has improved since 2004, some companies still hide their proprietors through a complex network of off-shore accounts
According to the Media Index website, Bucharest TV channel B1TV has as its major shareholder Ismar International, based in the Netherlands Antilles, even though on the market it is understood to be controlled by businessman Bobby Paunescu.
Radio Total belonged until recently to a company called Comac Ltd Cyprus, which was reportedly in the hands of businessman Sorin Ovidiu Vantu and his associates, until it entered officially in the Realitatea-Catavencu media group. Local Pratech TV is owned by the Cyprus-based Central and Eastern European Investment Fund Ltd.
Below is the breakdown in ownership of the largest media groups:
MediaPro and CME
Owners: Central European Media Enterprises (CME) - NASDAQ-listed company based in Bermuda - and Romanian businessman and ex-journalist Adrian Sarbu
TV and Radio:
Pro TV (TV market leader)
ProCinema, Acasa TV
TV Sport, MTV Romania
Pro FM and Info Pro
Print:
News agency Mediafax
Business daily Ziarul Financiar
Newspaper Gandul
Local weekly newspapers including Banateanul, Ieseanul, Bihoreanul, Sibianul, Hunedoreanul
Weeklies including Business Magazin, Time Out Bucuresti
Sports daily Pro Sport
Ringier Group (Switzerland)
Print:
Daily Libertatea (Market leading
newspaper)
Daily Evenimentul Zilei
Economic weekly Capital
TV:
Minority share in Kanal D (majority owners Turkish Dogan Media)
Adevarul Holding
Owner: Dinu Patriciu
Print:
Daily newspaper Adevarul
Weekly Dilema Veche
Magazines Dilemateca, Adevarul Literar si Artistic, Foreign Policy
Realitatea-Catavencu Media Group
Owner: Sorin Ovidiu Vantu
TV and radio:
News channel Realitatea TV
News channel Money Channel TV
Romantica TV
Radio Guerrilla, Radio Realitatea FM
and Radio Total
Print:
News agency NewsIn
Newspaper Cotidianul
Business newspaper Business Standard
Weekly magazine Money Express
Satirical weekly Academia Catavencu
Weekly listings magazine B24Fun
Magazines Tabu, Unica,
Superbebe, J’adore,
Aventuri la Pescuit,
Bucataria pentru Toti
and Psihologia azi
Intact
Owners: the Voiculescu family
TV and radio:
Antena 1, 2 and 3
Euforia TV
Sports channel gsptv
Radio stations Romantic FM and Metropol FM
Print:
Daily newspapers Jurnalul National
Sports daily Gazeta Sporturilor
Daily business newspaper Financiarul
Business weekly Saptamana Financiara
Lifestyle magazines Felicia and Tango
SBS Romania
Owner: German group ProSiebenSat.1
TV and radio:
Prima TV and Kiss TV
Kiss FM, Magic FM and One FM
