Oligarchic Models in the Romanian Media Market

Summary

1. from anonymous 'Cypriots' to 'famous' oligarchs

2. how to investigate media ownership

3. legislation and monitoring activities to improve the transparency and prevent the concentration

2008: The Main TV ChannelsAudience share (%)

CME (Bermuda) 26

TVR (PSB) 22

Antena (previously Cyprus-based

owner – Voiculescu's family) 15.1

Pro Sieben 4.7 Blue Link

Comunicazione

(Cyprus) – Sorin Ovidiu Vantu 3.7

CME

TVR (1&2)

Antena(Voiculescufamily)Pro Sieben

Sorin OVantu

Others

Source: TNS-AGB, apud NMP, EUMAP 2008

2008: The Main TV ChannelsAdvertising share (%)

CME

TVR1

Antena 1

Realitatea TV

National TV

Others

CME (Bermuda) 33.8

TVR 12.9 Antena 1

(previously Cyprus-based owner) 11.0

Realitatea TV (Cyprus) 7.0

Source: TNS-AGB, apud NMP, EUMAP 2008

2011

Broadcasting: Almost similar like during the past years. Highly concentrated:

2 foreign groups 2 local oligarchs

The state-owned TV has decreased in audience.

Two foreign groups CME, ProSieben1; two oligarchs Voiculescu and Vantu.

Politician Dan Voiculescu

Sorin Ovidiu Vantu – prosecuted for allegedly illegal activities

OK, Cyprus and Bermuda Island. The question is: Why?

What is the main reason for choosing tax-heaven?

Possible reasons:

1. to decrease taxes: (supposedly) legal.

(i.e. CME / Mediafax news agency)

2. to hide ownership and the money traces – suspect

(Realitatea Media – Bluelink - Cyprus/ under investigation)

3. to 'wash' money and/ other illegal activities – illegal

after a final decision of a court.

Current regulations – audiovisual Law 504/2004Ownership Data – published on the CNA's website

Art 43 (5) 10% of the share capital or of the voting rights of a company holding - must notify the Council

(6) Shares shall be only nominal.

(7) The use in whatever way of another person’s name by a company is forbidden.

www.cna.ro.

Ownership data – available and regularly updated.

Evolution in Romania: From Cyprus anonymity to 'transparent' oligarchy

2000 - 2004Cyprus-bases companies, New J ersey, Bermuda,

Virgin I sland, Switherland etc

Currently: the Broadcasting

Regulator obliges the players to

disclose ownership – physical person

Pressure from civil society

Print media: from Media Investors to 'Famous' Oligarchs

2006: 72.3%

Media ownership

Media ownership in the media business (% of the circulation

market share)

...

2006: 27.7% Non-media ownership

2010:7.5% Media Ownership

2010: 92.5%NonMedia Ownership

Non- Media Ownerships in the media

Business

The specifics of the Eastern European market: unfair competition; artificial increase

in audience

Average circulation per issue increased in Romania 2009 towards 2008. (WAN in Stetka, Vaclav, MDCEE, lecture RISF, 23.02.2011)

Potential explanation: artificial increase by Patriciu's media group apparently on illogical economic reason. The leading media investor in print media (who made money from the petroleum industry) lost about 40 million euro/year in 2010 and he keeps investing in the media business. The question is: why?

Non-media ownership Influence

Indirectly, profit in other Business (evidences

required! Not obvious)

If not for other commercial interests,

then Why?

Who owns the media – way to look into it

How to investigate on media ownership:

Look into the trade registry data (the registry of companies)

Foreign-ownership: look into the registry in their country

Go on the field: Contact local media to learn more – is there just a 'postal box'?

Or does that company has an office abroad, employees etc

Where the money are coming from?Lack of legislation on transparency of financing

Transparency of financing sources

Art 30 (5) Constitution of Romania

(5) The law may impose upon the mass media the obligation to make public their financing source.

Never put into specific legislation.

Preventing media concentration

A. Quantitatively: audience share + revenues share Romanian Law: rudimentary - only audience share

The main limitation: 30% of the audience market share B. Qualitatively: horizontal, vertical, cross-ownership

Romanian Law: rudimentary – horizontal, verticalAbsent – cross-ownership

Art. 44 Audiovisual Law 504/2002 (as updated)(1) With a view to protecting pluralism and cultural diversity,

ownership concentration - limited to dimensions ensuring economic efficiency, but not generating dominant positions in forming of public opinion.

Official Gazette of Romania, PART I, November 19th, 2009

Mixture of interests behind media models – interesting case studies:

Lately, evidences about media owners' interference not only in the media business, but also in the 'triangulated' relation media-power-business have become common (e.g. transcripts in Sorin Ovidiu Vintu's case, showing he was discussing about portfolios in the next government (Gandul, 18.10.2010, available online, in Romanian language).

Case studies revealing what kind of 'other interests' are behind a media business have also occurred: The prosecutors and the judges fear of me, and if rumors that I do not own Realitatea TV anymore come out, they would judge me as if I was an ordinary burglar. (Sorin Ovidiu Vintu, media owner, in a phone talk with Cozmin Gusa, transcripts in Gandul, cit).

Content Monitoring studies showing high discrepancies between different media coverage. (e.g. Udovičić, Radenko, ed. (2007), Indicator of public interest: TV prime time domestic news - monitoring and analysis of TV news.

Ownership

although more transparent than in the past, the ownership analysis reveals:

significant structural changes - the dominance of non-media ownership in the print media business

dominance of structural oligarchic models

dominance of the influence-driven pattern

Concentration of influence-driven media businesses

Financing resources

Obscure resources – little information about money. No legislation to ensure the transparency.

Conclusions