Home > Uncategorized > Strangling the media in Hungary: How it works

Strangling the media in Hungary: How it works

June 20, 2012

Bence Rétvári, undersecretary in the Ministry of Administration and Justice, only today complained, not for the first time, about the report of Freedom House which the current administration finds unfair to Hungary. Behind Rétvári’s unctuous smile is an unbending attitude that can be characterized as reactionary Catholicism with a rigid worldview. According to Rétvári, Freedom House should have an office in Hungary. Then the officials of the organization would know that “there is media freedom in Hungary.”

Well, let’s see how this media freedom works in practice. Here I will focus on a music station that cannot be accused of broadcasting anti-government programs as Klubrádió does. Yet the Orbán government decided to kill it. How? Financially. Why? Because the owners were not their men. It is that simple.

Let’s go back a little in time. In 2009 there was quite a scandal in the Hungarian media world over the licenses of two powerful radio stations owned by foreign companies that were up for renewal. Rumor has it that the two parties, MSZP and Fidesz, made a deal. One of the stations went to people close to Fidesz and the other to MSZP allies. The owners of the “Fidesz station” were Tamás Fellegi, future minister of national development, and Zsolt Nyerges, who together with Lajos Simicska, former treasurer of Fidesz, owns Közgép, a company that seems to get a huge chunk of European Union public works subsidies. The MSZP station is called NeoFM and the Nyerges-Fellegi owned station Class FM.

According to an April finding of Ipsos/GFK more than 3 million people out of 7 million listen to these two stations daily. Half of the three million listen to NeoFM and the other half to Class FM. However, the NeoFM listeners are more faithful to their favorite radio station. On average they spend 4.2 hours on NeoFM while Class FM fans spend only 2.6 hours. Yet Class FM is thriving and NeoFM just declared bankruptcy. How can that happen?

Easily, if the owners of the radio station are not considered to be devoted supporters of the current government. Last year alone NeoFM lost 1.2 billion forints. The station owes 700 million forints just to the Media Authority for its license fee. Magyar Nemzet, upon hearing about NeoFM’s financial troubles, blamed the station. The author of the article, Levente Bucsy, claimed that “from the large advertising revenues the owners refuse to pay the state for its frequency.” The paper quoted a spokesman of the Media Authority who said that the owners of the station “simply don’t want to operate the station.” The owners of NeoFM must either pay by June 18 or it will be shut down.

The Media Authority from the very beginning decided to make NeoFM’s situation as difficult as possible. In 2010 the station had to pay an almost 100 million forint fine for two reasons. First, because they allegedly broadcast more ads than allowed and, second, because they didn’t devote sufficient time for news. The real problem, in fact, was a lack of advertising revenue.

Strangling / flickr

The other music station, the Nyerges-Fellegi owned Class FM, receives enormous amounts from money set aside for advertisement by the government and state-owned companies. The largest advertiser is the state-owned Szerencsejáték Zrt (the state lottery) that has an advertising budget of 708 million forints. It spends 82% of it (580 million) on Class FM! On the other hand, NeoFM didn’t receive a penny this year from the government or state-owned companies.

According to Kantar Media, a company that follows the size of advertising revenues, last year sixteen government organs or state-owned companies advertised on Class FM. Among them, the Prime Minister’s Office, the Ministry of Administration and Justice, the Ministry of National Development, the Paks Nuclear Power Plant, and the Agrármarketing Centrum. In the same year only six state-owned companies advertised on NeoFM, and this year none.  Class FM is still doing just fine.

The most telling sign is the advertising outlay of Szerencsejáték Zrt. In 2011 NeoFM received  8 million forints worth of ads from the state lottery company as opposed to the 580 million that went to Class FM. Seventy-two times more than NeoFM, which covers 81% of the country, received.

By June 18 NeoFM asked for bankruptcy protection, but that didn’t make the Media Authority change its mind. Although a company under bankruptcy protection cannot be unilaterally shut down, this is exactly what the Media Authority of Annamária Szalai did. NeoFM offered a 500 million forint promissory note, but the spokesman for the Authority announced that it was no more than “a scrap of paper.” Today the Media Authority terminated NeoFM’s contract.

I think this story provides an excellent illustration of the Fidesz mindset. Fidesz politicians go after all who are not their supporters or who were in any way  associated with parties opposing Fidesz. One of the current owners of NeoFM is a former SZDSZ politician. While János Kádár in 1963 announced that anyone who is not against us is with us, Fidesz’s motto is exactly the opposite: anyone who is not with us is against us and we will treat them accordingly. We will ruin them. We will ruin their reputation, we will ruin them financially, we will do everything in our power to make these people understand that there is no mercy.

Bence Rétvári might convince some American officials that there is media freedom in Hungary by showing them articles from the opposition papers, but foreign observers should really study the books of those newspapers, radio stations, and television stations close to the government and compare them with the books of the opposition media outlets. That would tell the true story.

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  1. June 20, 2012 at 4:42 pm | #1

    Orbán can afford to have a ‘free’ press, for the simple reason that very few people read newspapers these days, and only a few hundred thousand (if that) read papers that might be critical of the government.

    Whereas nearly everyone watches TV and listens to the radio.

    So, an easy ploy – let the opposition newspapers do what they like, so you can demonstrate ‘press freedom’, but retain total control over the media that actually matters.

    Those reading this who live in the UK and other countries that do have a reasonably free media might argue that a ‘free’ press is still dangerous to Orbán because the press can start a story or slant the news and this is then picked up by the TV and radio and becomes ‘news’. But, of course, if the government control radio and TV this can’t happen.

    Orbán is quite happy for the papers (and blogs) to keep criticising the government and exciting the few who read them because it makes him look good, and because he knows they don’t really matter.

  2. petofi
    June 20, 2012 at 5:06 pm | #2

    A fine article, Eva. I hope you sent a copy to Freedom House as well.

  3. gdfxx
    June 20, 2012 at 5:06 pm | #3

    I have to admit, I have mixed feelings about this post. If radio stations can only survive by getting government financed advertisements, they should be ALL out of business. It is not the government’s role to finance music stations. I am particularly outraged by the lottery office spending money, especially such large amounts, on advertising. I am sure there are other more worthy causes where the gambling money could be spent.

    On the other hand the government charging such fees for the airwaves is also outrageous. The airwaves belong to the people, they should be distributed to the people based on the people’s preferences.

  4. Gretchen
    June 20, 2012 at 5:22 pm | #4

    ~~gdfxx So it is all about control: awarding construction contracts, awarding advertising funds.

  5. Smithborough
    June 20, 2012 at 5:53 pm | #5

    ‘According to Rétvári, Freedom House should have an office in Hungary. Then the officials of the organization would know that “there is media freedom in Hungary.”’

    I thought they did have an office in Hungary. I certainly visited their Budapest office in 2006. Has it closed down since?

  6. June 20, 2012 at 6:24 pm | #6

    Smithborough :

    ‘According to Rétvári, Freedom House should have an office in Hungary. Then the officials of the organization would know that “there is media freedom in Hungary.”’

    I thought they did have an office in Hungary. I certainly visited their Budapest office in 2006. Has it closed down since?

    Yes, they closed it since.

  7. kincs
    June 20, 2012 at 6:37 pm | #7

    It goes to show how foolish the MSZP were in going along with the frequency stitch-up with Fidesz in 2009, forcing two independent, commercially viable stations off the air in favour of party interests on both sides.
    Fidesz has always been much cleverer than the MSZP – also more ruthless, more cynical and downright nastier – and were always going to come out ahead.
    The MSZP should not be the least bit surprised at this most predictable outcome.

  8. petofi
    June 20, 2012 at 8:44 pm | #8

    kincs :
    It goes to show how foolish the MSZP were in going along with the frequency stitch-up with Fidesz in 2009, forcing two independent, commercially viable stations off the air in favour of party interests on both sides.
    Fidesz has always been much cleverer than the MSZP – also more ruthless, more cynical and downright nastier – and were always going to come out ahead.
    The MSZP should not be the least bit surprised at this most predictable outcome.

    The sad part about the parties’ connivance is that neither one is trustworthy or has the best interest of the country at heart. No wonder that the ordinary citizen is baffled and knows not where to turn!

  9. Some1
    June 20, 2012 at 9:24 pm | #9

    gdfxx :
    If radio stations can only survive by getting government financed advertisements, they should be ALL out of business.

    But that is exactly that tactic of Fidesz. No stations can afford the inflated fees from regular net profits. Fidesz knows this well, so they created a “free market” airwave that only stations can stay with who they artificially keep alive by paying for useless promotions.

  10. LwiiH
    June 21, 2012 at 1:49 am | #10

    gdfxx :
    If radio stations can only survive by getting government financed advertisements, they should be ALL out of business.

    Indeed.

    The whole thing was legalized robbery… And isn’t it once again, a nice example as to how to funnel government funds through a corporation into your bank account?

  11. June 21, 2012 at 8:49 am | #11

    LwiiH :

    gdfxx :
    And isn’t it once again, a nice example as to how to funnel government funds through a corporation into your bank account?

    Well quite. Regardless of media freedom, this is also about profits from the state lottery eventually ending up in the hands of Orban Viktor’s old school friend and university supervisor.

  12. Qaz
    June 21, 2012 at 5:48 pm | #12

    So well summarized by the timeless French adage: Bien mal acquit ne profite point (at least for MSZP)

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