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.