A major step towards an authoritarian media regime in Hungary

The publisher Mediaworks has suspended the publication of Népszabadság, Hungary’s leading opposition newspaper and highest circulation broadsheet. Though the measure was officially referred to as a suspension, in reality it probably implies that Népszabadság has been shut down for good. It has been rumoured for a long time now that a key friend of the prime minister, the public contract oligarch Lőrinc Mészáros, will become the owner of one of the largest media corporations in Hungary by buying the Mediaworks publishing house. There was some speculation as to how exactly this business would transpire, but no one envisioned a scenario where the country’s largest broadsheet would be shut down at a moment’s notice. It is highly unlikely that we err in assuming that the newspaper’s shutdown and the planned change of owners are connected, even if the latter has not even been formally announced yet. By Gábor Polyák and Ágnes Urbán

The significance of Mediaworks in the Hungarian media market is indisputable. Its revenue was 16.4 billion forints (roughly 55 million euros) last year. Just a few days ago it bought the Pannon Lapok publishing house (all links are in Hungarian), which is also a major player in the newspaper market with a revenue of 7.8 billion forints (roughly 26 million euros) in 2015. As a result, Mediaworks’ complete portfolio now comprises 12 regional newspapers, in addition to the national newspapers Népszabadság, Világgazdaság (a business daily) and Nemzeti Sport (a sports daily), as well as countless magazines and online portals. Even prior to this day, theconnection between Mediaworks and Fidesz was often apparent, but thus far the company’s operations did not ultimately impact the working of the Hungarian media landscape.

The influence of Mediaworks’ broad portfolio on public opinion is essentially based on two pillars. Népszabadság’s circulation and readership is rather small today; this is what the publisher’s press release on the issue cited in trying to justify its decision to close the newspaper. It is true that the past two decades were not a success story for the newspaper, and an audit by Matesz, an organisation that monitors newspaper circulation, shows that Népszabadság, which distributed 208,000 copies at the turn of the millennium, has dropped to only 38,000 copies in the second quarter of this year. Nevertheless, the press release on the whole is cynical to the utmost, reminiscent of a previous scandal, when the owner fired the editor-in-chief of a leading online newsportal, origo.hu, after the site had made damaging revelations about a top government minister, and claimed that the decision was due to changing media consumption patterns (since then, origo.hu has been politically streamlined and has become reliably pro-government in it reporting).

The continued operation of Népszabadság is of symbolic importance for the public sphere due to its history and professional prestige; for many, it remains the emblematic leftwing newspaper to this day. What renders the situation especially dramatic is that as readers we saw ourselves that the paper has markedly improved recently. Several excellent journalists have recently started to work at Népszabadság, and they successfully investigated cases that ended up shaping the public agenda in Hungary.

In terms of reaching readers directly, the regional newspapers in Mediaworks’ portfolio are far more important, and for the time being we have no idea what will happen to them. According to the most recently published figures by Hvg.hu, the regional newspapers that make up the new, joint portfolio have a circulation of 258.000, while the number of their readers exceeds 1 million. Research by Mérték has shown that regional newspapers continue to play a key role in news consumption. These newspapers will definitely not be shut down since reaching their one million readers is of cardinal importance for Fidesz. But in light of Népszabadság’s closing, we should not be under any illusions about who will work for them; only journalists who are unreservedly loyal to the government will be allowed to stay on. The impact of this change will be vast because – not counting a few local commercial radio stations – regional newspapers are the last vestiges of the local public sphere that are not directly controlled by a mayor or the government’s media point man, Árpád Habony.

The decision to shutter Népszabadság will go down as a historical step in the annals of the Hungarian press. It is also instructive, however, to take a look at the events that lead up to this development. A few years ago, in 2010, two publishing houses with significant stakes in the Hungarian market, the German Axel Springer and the Swiss Ringier, applied for a merger clearance. Based on the recently adopted media law, the National Media and Infocommunications Authority denied their application. As a result, Népszabadság could not sold to a well-capitalised investor with a strong background in the media market, but to an Austrian businessman, Heinrich Pecina. Pecina is hardly known in Hungary, but journalists have managed to unearth ties between him and the Hungarian government. It was obvious that this had in fact been one of the important goals of the legislator from the very start: the law mandated that the Authority would have to approve merger applications that were pending at the time when the new legislation was adopted. Since this was the only merger application pending at the time, media authority’s refusal to authorise the deal was widely anticipated.

In situations such as this the Authority has to examine whether the right to diverse information will continue to prevail following the merger. The official body may deny its consent if it assesses that the merger violate this right. The Authority’s statement at the time is especially instructive today. The document lays down certain key principles, to wit:

“There is a substantial relationship between the level of media concentration and the ability of a plural media system to prevail. A high level of media concentration will diminish the diversity of available media contents, the plurality of opinion, and, as a result of the aforementioned, it will lead to a decline in society’s communication welfare. High levels of ownership concentration carry the risk that public opinion will become one-sided as certain views will either disappear from information and opinion formation, or will be given less space in media coverage. High levels of ownership concentration could engender an environment that favours the monopolisation of the advertising market, impedes the market entry of new media providers, and could also lead to the uniformisation of media contents, which in turn would stifle creativity and entrepreneurial spirit in the media sector.”

It is undeniable that diversity is very important in the media, yet the Authority’s statement was professionally exceptionable, as is readily apparent from a study published at the time. We would be very curious to find out what the Authority’s experts who argued that diversity was a value worth protecting at the time, and who still work there, are doing now, as Népszabadság is being shut down. Well, as a matter we have no illusions: They probably lean back with a sense of intense gratification that the Népszabadság problem has finally been taken care of.

The previously quoted passage about the importance of diversity was written in 2011. Today, five years later, we know that since that statement was written diversity has become the value that the Hungarian media policies have most spectacularly trampled underfoot. The unfettered acquisition spree of politically connected media entrepreneurs, the activities of the Media Council in reshaping the radio market, the facilitation of massive market-distorting state advertising spending, and the astonishingly propagandistic operations of the state media all work to diminish diversity of opinions in the media. These processes were to some extent apparent already in 2011. That is why the media law led to such an outcry. What some may have perceived as overblown hysteria at the time was in fact an astute reading of the law and the media policy goals underlying it. We could not know back then that the country’s second largest television channel, TV2, would end up in the hands of a government commissioner, or that the country’s largest leftwing newspaper would be shut down without informing either the public or the newspaper’s staff, but we suspected that this is what the creators of the media law had in mind.

The shutting down of Népszabadság is a stunning turn of events, but it nevertheless fits into the pattern that Fidesz has worked to establish since 2014, when the prime minister fell out with his erstwhile ally, the oligarch and media tycoon Lajos Simicska, with the result that Fidesz lost part of its media empire. Now control over the pro-government media is dispersed among several players, rather than being concentrated in the Simicska business empire. The new people in charge are personally dependent on Viktor Orbán and lack even the limited measure of economic autonomy that Simicska’s businesses enjoyed. The governing party will consider this process as successful if the opposition voices are silenced. Népszabadság, with its increasingly daring investigative reporting that recently brought a host of major scandals to light, proved an ill-fit for this vision of the media market.

It is an intriguing question why the government side abandoned its strategy of subtle machinations that dismantle media freedom step by step, and instead decided to destroy Népszabadság in one fell swoop, thereby potentially risking international backlash. It is possible that the spectacular failures of building the new Fidesz media universe have led the decision-makers to the conclusion that it would make no sense to try to integrate Népszabadság into the rightwing media empire. Any efforts at bringing in journalists who are loyal to the government to Népszabadság could have caused operational problems at other pro-government media. And it is fairly obvious that no one on the current staff would have worked for Fidesz. In an especially perfidious move, the newspaper was shuttered (officially the publication was only suspended, but that explanation hardly seems serious) at a time when the newsroom was moving from one office building to the next, and the staff had all their things packed up. Those working in the newsroom no longer have access to their old offices, and in addition to humiliating the staff, the goal appears to be to make sure that they do not have access to the materials that they could have used to write their pieces in the coming weeks.

Following the economic crisis and the concomitant drastic decline in the advertising market, media market players in Hungary were in a difficult position, and Fidesz shrewdly assessed that this provided a historical opening for taking control of vast segments of the market. We should be under no illusions what is going on here: Formally speaking, Mediaworks’ current, Viennese owner may be responsible, but the pervasive speculations about the influence of Orbán’s most-favoured oligarch, Lőrinc Mészáros, were by no means coincidental. Such a drastic assault on press freedom in Hungary would have been hardly conceivable without Fidesz’s assent; indeed, it was almost certainly performed at Fidesz’s behest.

As foreign investors are leaving, ever larger segments of the Hungarian media market are being taken over by figures with varying degrees of public connection to the governing party. In the area of political news, only a few minor players persist, with RTL being the sole remaining major investor. When compared to autocratic regimes in previous historical periods, one redeeming factor in this situation is the existence of digital media. Even with the few sparks of hope that remain, the Hungarian public sphere is increasingly under the sway of total pro-government control as we saw during the campaign on the quota referendum. October 8, 2016 was another major step towards total government domination in the Hungarian media market.