Fight over the Hungarian airwaves or more than that?

For weeks now the Hungarian media has been full of news, editorials, and speculation concerning ORTT's decision not to renew the license of two popular radio stations, Sláger Rádió and Rádió Danubius. ORTT (Országos Rádió és Televízió Testület = National Radio and Television Commission) is the body that administers Hungary's airwaves. I must admit that I paid relatively little attention to the whole affair, partly because I don't have much interest in popular hits ("sláger" actually means "hit") and partly because it seemed to me too much guessing and too little hard data on the circumstances of the case.

The story briefly is as follows. The frequencies used by these two radio stations are strong enough to broadcast nationwide. So someone traveling by car could listen to his favorite music uninterrupted from the Austro-Hungarian border all the way to Romania or Ukraine. Strong stations like that are exceedingly valuable. There are very few frequencies allotted to Hungary capable of broadcasting over such a wide range. Most of the stations like InfoRádió or KlubRádió can be heard in only about a one hundred-mile radius from Budapest. Sláger and Danubius are exceedingly popular. By the way, anyone who's interested can listen to practically all Hungarian radio stations on the Internet at http://delicast.com/, which seems to me the easiest way.

The licenses that had been given out for seven years expired this year in the case of these two stations, but almost everybody took it for granted that they would be renewed. After all, Sláger Rádió's owner Emmis Communications claims that Sláger Rádió is the number one station in Hungary. Emmis is a publicly traded company (NASDAQ) that owns and operates radio stations in the U.S. in addition to three stations in Bulgaria and Radio Expres in Slovakia. Danubius is owned by Accession Mezzanine Capital, an investment fund based in Vienna. Accession Mezzanine also owns the Hungarian company Borsodchem, a leading European integrated producer of isocyanate-based specialty chemicals for various industrial markets. The company is also a major regional PVC producer. In addition, Accession Mezzanine owns Lux Med (Poland's leading private health care provider), a telecommunications company in Bulgaria, Solaris Bus and Coach S.A. in Poland that manufactures low-floor city buses, Devin bottled water company in Bulgaria, and a company manufacturing aircraft surveillance technology in the Czech Republic. ORTT went up against real heavyweights.

As I said, facts are sadly lacking in this case. I'm not at all sure that the guessing game in the liberal Hungarian media about some kind of a deal between MSZP and Fidesz concerning the fate of these two music stations has any merit. But according to the widely accepted version, one of the winning bidders, Advenio, belongs to a group that owns pro-Fidesz media outlets. The other winner, Econet, a modest player on the Budapest Stock Exchange, owns a listings magazine that has no identifiable editorial bias. The conclusion observers reached was that Fidesz was hell-bent on getting one of the stations and since half of the members of ORTT are delegates of Fidesz, the MSZP delegates made a deal with their Fidesz friends and voted to pass both stations on to the new owners. In brief, they made a dirty deal. If Fidesz gets a station they ought to get one.

Being a pragmatist, I wasn't especially upset about the "deal" if there was one. If the media law is written in such a way that it allows politics not just to interfere in but to direct the media outright and one party is taking full advantage of this situation then the other side must act accordingly. The other side is practically forced into making "deals" however distasteful that maybe. However, independently from political considerations, it seems that not everything was legal. László Majtényi, chairman of the commission, resigned because according to him licences were awarded to companies that are not fit to run the stations. Majtényi told the Financial Times that "they had business plans which had no chance of succeeding…. They were offering 50-55 percent of net revenues as licence fees… About 20 percent of net revenues is the maximum a commercial station can pay and still be profitable." The current owners offered 10 to 15 percent, which is apparently a realistic sum.

I heard Majtényi being interviewed several times, and the reporters always pressed him to admit that some kind of political hanky-panky had taken place. However, he refused to get embroiled in any political squabble and kept repeating that he as a lawyer could only say that the award of the licenses was not legal. That's why he resigned. However, both foreign-owned radio stations claimed that before the tender process began they received visits from people claiming to represent the two parties offering a deal that their licenses would be extended if the parties received 50 percent of the companies' equity. "We were approached by a political party and it seemed clear that a deal was being offered in return for the party's support in the tender," said Barbara Brill, senior vice-president of Emmis Communications' international subsidiary. We hear here only about "one party" and Sláger but, of course, it is possible that both parties were involved.

Majtényi in his interview with the Financial Times happened to say that "these are people [meaning the party leaders] who will fight to the death over a village radio station licence." While "these people" were playing their provincial little games they somehow forgot that there was a world outside of Hungary's borders. They forgot that these two stations are owned by foreign companies and the way the Hungarian authorities dealt with them might not easily be forgiven. In fact, the games they are playing might have very serious repercussions. It is enough to read the headline of The Economist (November 5): "Are populist politicians turning on foreign capital?" The beginning of the article is not too promising either: "Foreign investment helped catapult central Europe to prosperity over the past 20 years. To escape the current recession it will need more of it. But a populist response to the economic crisis is pulling in the opposite direction, as several recent incidents in Hungary illustrate."

According to The Economist Fidesz is responsible for this state of affairs because the party "has stoked discontent with privatization, foreign investors and, to an extent, free-market capitalism in general." And then the paper gives examples: in 2008 Fidesz helped stop Apollo, an Indian company, from building a tire factory in Gyöngyös that would have created 900 jobs but that Fidesz argued– wrongly–used technology banned in the European Union. Fidesz also backed a referendum to block private investment in the failing national health service.

Fidesz of course denies that it is anti-business. The paper mentions Fidesz's enthusiastic support of a big new Mercedes plant in eastern Hungary. What the paper forgot to mention is that while the Apollo plant was to be built in Gyöngyös, an MSZP-led town, the Mercedes plan will be built in Kecskemét that is run by Fidesz. So, the way I see it, this is not just a simple populist anti-capitalist upsurge because of the recession but rather the result of petty, provincial party struggles that pay not the slightest attention to the country's interests or to the possible international reaction. This is a very dangerous game, and the foreign press considers Fidesz responsible for these developments. As The Economist concludes its article on Hungary: "Outsiders must hope that Fidesz can contain the genies it has so casually unbottled." I'm not at all sure whether it can.

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Hank
Guest
“I don’t have much interest in popular hits (“sláger” actually means “hit”) and partly because it seemed to me too much guessing and too little hard data on the circumstances of the case.” Firstly I think the issue is not whether you or me like Sláger and Danubius, but that 3.5 million people in this country do and they are being told to go f*** themselves. The discontent is huge, with 100.000s of people signing petitions, sending sms-es, beeping the horns of their cars at 8.00 in the morning in Budapest (it was a huge racket last Friday) etc. Secondly, I think the evidence that this was a political deal is overwhelming, actually the party representatives concerned hardly deny it. ORTT is an institution governed by party representatives and MSZP and Fidesz representatives voted unanimously and without serious debate (!!!)to award the frequencies to “their” stations. According to a political insider close to the MSzP, the parties’ reasoning probably was that this way they would at least have one friendly radio station in the run up to and the aftermath of the elections in April 2010, after which the ORTT will probably be dominated entirely by Fidesz and Jobbik and… Read more »
NWO
Guest
Eva: I agree with Hank that you efforts to try and minimize MSZP’s responsibility is worthy of scorn. The MSZP is the Government. And while the MSZP and FIDESZ may claim their representatives on the ORTT Board are independent, that is ridiculous (as we all know). The fact is that FIDESZ behavior is contemptible, but equally so is that of the MSZP. Anyone who is stupid enough to try and do business in Hungary surely knows that in the last 18 months the level of bribing required is sky rocketing. Many in the MSZP understand they are likely to be in the political wilderness for a long time, so now is the time to take what one can. It is not that I think FIDESZ will be better, but they are not yet fully in power. The lessons from the radio travesty are manifold. First, neither major party is at all interested in rule or law based capitalism. Second, for each party and its many hangers on, politics is very much a for profit business. Sadly, given EU accession and the cohesion funds, it is now an even more profitable business than before. Third, this country is full of people… Read more »
Andras
Guest

Györny Bolgár, a well-known left wing follower, made an interesting comment in a program in the Klubradio. He told, that maybe the rationale behind the decision was no t so much having right or left wing oriented commentators and news broadcasting by the new stations, but financing other news related media outlets out of the profit of these music radios instead of letting the profit to go abroad.

Hank
Guest

Eva: “If one lives in a country where Fidesz can operate as it does, it is self-defeating to act as if one lived in some other country where things like that don’t happen.”
Surely, that is a license not only to grab a radio station because the other side does, too, but also to be corrupt (the other side is too), to be nationalist (the other side is too), to be authoritarian (the other side is too), and yes, to establish Guantanamo, ignore due process and torture (to parafrase Bush, the other side does too.
I find that an extremely shortsighted and self-defeating way of thinking.

NWO
Guest

Eva
Since the regime change, the MSZP has led the government for 60% of the time, including the last 8 years. Your defense of the MSZP as being forced to do what they did here is outrageous. Orban and FIDESZ will likely do a terrible job managing the country, but to excuse the corruption and incompetence of the MSZP on pressure and tactics of FIDESZ is really pathetic. If the MSZP had been honest and competent over all of the last 8 years (instead-on the competent side at least-the last 6 months), we would not even be having this discussion now and we would not be concerned about Orban achieving a 2/3rds majority.

Member

I must agree with the previous commentators here.
One of the main reasons why corruption is so tolerated in Hungary is because the political divisions in the country allow politicians to divert attention from their own bad behaviour by scaring their supporters with threats of what the other side will do if they get into power.
This sort of action should be the sort of thing that could launch an anti-corruption platform by one of the smaller parties such as MDF or even SzDSz, but unfortunately they just don’t have credibility on the issue given their own pasts.
On a more general side note I believe that when cynicism becomes sufficiently ingrained it tends to metamorphose into extreme gullibility for extreme solutions (eg Jobbik).

Mark
Guest
Hank: “I think the issue is not whether you or me like Sláger and Danubius, but that 3.5 million people in this country do and they are being told to go f*** themselves. The discontent is huge, with 100.000s of people signing petitions, sending sms-es, beeping the horns of their cars at 8.00 in the morning in Budapest (it was a huge racket last Friday)” I think in some ways this is the point. These two radio stations are what one hears in the background in shops and workplaces in Hungary, they have huge brand identification across the political spectrum, and they are the market leaders for what is, across Europe, the most popular form of radio – pop music, quizzes, easy listening, and a little bit of news, but as little politics as possible. It would be unthinkable in any other European country that stations with this following could have their licences removed. The trend in most countries has been to grant more licences, at both national and local level. With the spread of digital radio technology (which has been marked in western Europe), there will be more, not less choice. If there is anything capable of convincing the… Read more »
Andras
Guest

Eva, maybe you are right that at this point, at the end of a horrible 8 years, they did not have any option left. But still, people in this deal are recognizing the inherent nature of MSZP – which certainly contributed to a great deal to her demise: possibly corrupt backdoor dealmaking following obscure goals by a dealbroker in an oligarchic party taking into no account what would be the right and fair act, not to speak of wish of the majority (of listeners in this case). MSZP has governed this way for eight years. Maybe, with more luck, absent of world eeconomic crisis, they would be in little bit better shape. But they did not have luck. Maybe FIDESZ not at all better, but FIDESZ is on opposition, and the population only sees the responsability of the government, and the governing party. This phenomenon is largely the self-made – unwanted – consequence of the unhonest 2006 elections campaign and Öszöd.

Mark
Guest
Éva: “I still maintain that you people can’t think like politicians.” That may be because I’m not one! But even then I don’t think it is so simple, as there is a hard logic of realpolitik. There is more to successful politicians than cutting deals. My criticism is the MSZP is that, like András, it is good at backroom deals and machine politics. Perhaps because of the legacy of ruling in non-democratic conditions it is very bad at reconciling this is to the imperatives of securing democratic legitimacy. And beyond doing inter-party deals it has no long-term strategy. Legitimacy – as a set of unwritten rules between rulers and ruled – is very important in a democracy. In an election campaign, for example, in democracies parties cannot promise one thing before the election, and do what most people regard as the exact opposite when they get back to power. At least not without consequences. This is something that the MSZP clearly doesn’t understand, even though it has effectively destroyed their term in government since 2006. Furthermore, if the settled will of an electorate is statist and collectivist, in a democracy the party in power must pursue poliies that are consistent… Read more »
Andras
Guest

Eva, what you have asked is a crucial question. Yes, I do remember the 1998-2002 period. Also I remember, that the Fidesz government was voted out in 2002. That is democracy. Now, the turn is on MSZP. But: MSZP would not be in such a terrible shape, if it had had a honest government policy between 2004-2006, up to the elections of 2006. But, under the leadership of Gyurcsany, they made a tragic mistake. A tragic mistake, which, in one hand, justifies anything in the mindset of the opposition, and, on the other hand, disintegrated the moral standing of left-wing liberal supporters, voters. A real greek tragedy in modern guise: those who picts themselves as defenders of democracy is seen as undemocratic bunch of oligarchs against whom any measure is allowed.

Andras
Guest
Eva, In the last year of Medgyessy the government begun to introduce austerity measures. This is one of the major reasons that he lost his support. In 2004, Gyurcsany had forced a U-turn. Had you read the book of Debreczeni on Gyurcsany? He describes how it was. Gyurcsany summoned Draskovics, than finance minister, and asked him what will be the deficit for 2005. Draskovics replied: 4.5% Gyurcsány told him: that is not good, please come back tomorrow with a right answer. Next day, Draskovics told him 5.5%. Gyurcsany told him come back tomorrow, with a right answer. Literally this is the story (the figures not, but I write this without the book at hand). and for 2006 the deficit went up above 10%. If there would not be such an irresponsible policy, there would not be such a big U-turn. Not to speak of, if MSZMP would have lost in 2006, Fidesz would have won with a slim majority, and, now, MSZP would have two-third of the voters in her camp. Instead of this, we are witnessing the disintegration of the left-liberal wing under the burden of lie and incompetence, disorientation. Actually, reply to your question: have a look on… Read more »
Mark
Guest

András: “Actually, reply to your question: have a look on what Cameron promises.”
Cameron is yet to win an election, but the broader point you make is correct. Magaret Thatcher was elected in 1979 on promises to hike VAT to fund income-tax cuts for high earners and across the board cuts in public expenditure (she was not able to deliver these, because, as Hungary is going to find, cutting budgets depresses the economy and this leads to higher, not lower spending).
I don’t know what would have happened in the 2006 elections had the MSZP been more honest with the electorate, but had FIDESZ been elected it would be they, not the MSZP, that would be in a state of meltdown now.

Mark
Guest

Éva: “MSZP didn’t get into such trouble because it was corrupt or because Gyurcsány made a speech in Őszöd but because it had to introduce an austerity program.”
Of course it wasn’t his speech that got him into trouble, he was in deep trouble already. But it wasn’t the austerity programme per se either; it was that he spent most of the election campaign promising tax cuts; no user fees for health care; and denying FIDESZ charges that gas prices would go up. Within days of forming his second government these were thrown out of the window. In a democracy, where people expect some relationship between what they vote and what they get for the system to work, no-one can expect this can be done without serious consequences.

Andras
Guest
Now this a very real issue: the meltdown of the left-liberal parties. The problem is really not that FIDESZ would win the next elections. Democracy is just like this, and alternation of political parties in power leads to learning of the mistakes of the past. The problem is the meltdown of the left – liberal parties of the current (nowadays rather tacit) coalition. SZDSZ will most likely disappear. The MSZP likely would be a small party, led by some combination of the current leadership, without any legitimacy due to the current stalamate. How to come out of the meltdown? I am afraid, that just waiting for the failure of the Orban government is not enough. That would rather help Jobbik, which party probably would pursue the politics what Orban is doing now and would catch many of the disappointed voters of FIDESZ (and MSZP). This is a real problem, especially, given that the logic of the electoral system drives small parties out of the system in the long run. How to reconfigure the left? That is the real problem, and I am afraid that just Orban-bashing and populist promises would not be enough, which receipt was offered by Gyurcsany in… Read more »
Hank
Guest
As to why the MSZP started loosing its following, everybody seems to forget that this already started (and heavily) under Medgyessy! In the 2002 elections, the socialists had promised heaven to the electorate and they kept their promises under Medgyessi (remember the 100 steps program? Remember the ridiculous one-off wage rises for doctors, nurses, teachers, civil servants, policemen?) The MSZP thought they would gain the eternal trust and support of the voters and they were willing to sacrifice budget discipline for it. But what happened was incomprehensible (to them, and to me as well) cause in spite of keeping their promises, raising wages,social benefits etc etc, voters started walking away from them en masse in the polls. That is when and why Gyurcsány came along, and he saved the day for the MSZP by clinching the victory from Fidesz. But already one and a half year before these elections Gyurcsány was quite open about what he wanted: first win the election and then repair the budget mess that had been created under Medgyessi, so budget cuts, reforms in health care, pensions, education etc. etc. And as I wrote once before, it was Tibor Navracsics who – around the same time… Read more »
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