The Orbán government and RTL Group: a cease-fire?

Soon enough it will be a year since the Orbán government decided to levy an exorbitant tax on the largest and most profitable commercial television station in the country, RTL Klub. I wrote extensively about the tug of war between the Hungarian government and the German-owned station. According to rumors, the government plan was to squeeze the station’s owners into selling and then have the station be purchased by some “well-deserving,” meaning pro-government, individual or individuals whose newscasts would be as lopsided as those of HírTV and the state-owned MTV. Apparently, RTL was not ready to sell, so the government had to settle for the second largest commercial station, TV2, which was eventually sold to a shadowy group of people. The special levy that specifically targeted RTL Klub was intended as a form of punishment. Knowing Viktor Orbán’s warped psyche, I’m sure that this story is more than mere rumor.

So, the war began. RTL Klub coughed up the money. What else could they do?  But they paid the government back many times over. Their newscast, which used to consist of short, mostly tabloid items and police reports, was extended to an hour with a heavy emphasis on political news. Suddenly the dirt that emerges daily around this government could be seen on a commercial station’s evening news, watched by 1 million people as opposed to the state television’s propaganda news with its 400,000 viewers. The people who in the past had watched RTL Klub for its “entertainment lite” programming suddenly were confronted with the kind of news that earlier had never reached them. The result was stupendous. Although some commentators wondered whether RTL Klub’s viewers would be turned off and would switch to TV2, exactly the opposite happened. RTL Klub’s viewership grew substantially. Political analysts are convinced that Fidesz’s tremendous loss of popularity is due, at least in part, to RTL Klub’s newscasts.

From the beginning RTL Klub planned to take its case to Brussels because, while RTL Klub’s share of the Hungarian advertising market is 13.5%, it is obliged to pay 90% of all revenues received from taxes on advertising. Indeed, last October RTL Klub lawyers turned in an official complaint to the European Commission. Yet for months we heard nothing. Then, on January 19, Népszava reported that some Fidesz politicians would be very happpy if Viktor Orbán “made peace” with RTL Klub. The paper added that “according to some sources, the Orbán government is counting on ‘a cease-fire’ before the arrival of Angela Merkel” in Budapest on Monday.

RTL Group headquarters in Luxembourg

A week later 444.hu learned that János Lázár had already had several conversations, not with the Hungarian CEO of RTL Klub but with Andreas Rudas, director of East European operations, and Guillaume de Posch, CEO of the international RTL Group. Earlier they met in Munich and last week in Budapest. 444.hu claimed to know that they will meet again in Berlin sometime this week. The government allegedly wants to end the war with the German firm, which complained about its treatment in Hungary to Angela Merkel herself. The paper also seemed to know that the top management of RTL Group was ready to make a deal but that Dirk Gerkens, the man who is heading the Hungarian RTL Klub, refuses to compromise. Gerkens was indeed outspoken and combative, which raised the ire of some true believers. Gerkens told Bloomberg that he received threats of violence, delivered via friends and e-mails. He added that he moved his family out of the country, left his apartment for a hotel in central Budapest, and hired bodyguards.

After the report of 444.hu about the ongoing negotiations, rumors began to circulate in the media, especially after Népszava yesterday came out with the alleged details of the deal. According to the paper, the 50% tax on RTL Klub will be reduced to 5-10% but only if the station “tones down” its newscasts and fires Dirk Gerkens. Not surprisingly, journalists are up in arms. FSP (Péter Földes), whose blog regularly appears on Népszabadság On Line (NOL), summarized the sentiment. If what 444.hu and Népszava reported is true, then “RTL is preparing to commit public suicide combined with betrayal.” I agree, and that’s why I think such an outcome is unlikely. It would not only be ruinous for the RTL Group’s reputation but would also make the Hungarian government’s interference in the media, which they steadfastly deny, blatantly obvious. I don’t think it is in the interest of either party to cut such a “dirty deal.”

Meanwhile, in the last few hours HVG learned that the Orbán government’s decision to retreat on the 50% levy on RTL Klub resulted from diplomatic pressure: both the German chancellor and the prime minister of Luxembourg, where RTL Group is headquartered, strongly suggested to Viktor Orbán that he settle his dispute with Europe’s largest media firm.

Apparently, contrary to Népszava‘s claim, negotiations have not yet ended and the deal has not been sealed. Lázár, who is negotiating for the Hungarian side, admitted that his job as negotiator has been very difficult because “the prime minister insists on upholding the advertising tax.” For Orbán “this is a question of principle.” But it looks as if principle will have to be sacrificed in the face of diplomatic pressure and the hopelessness of Hungary’s case if the RTL Group actually sues. It seems that the prime minister will sketch out changes in the advertising tax tomorrow morning during his regularly scheduled radio interview, with details about the exact figures to be revealed later.

So, another defeat, another retreat. These are hard times for Viktor Orbán. Moreover, I suspect that the newscasts of the Hungarian RTL Klub will not change substantially in the future. RTL Group cannot afford it. Neither can Viktor Orbán.