Selling Népszabadság

With a daily circulation of 62,000 and a daily readership of 220,000 (2011 Q4 data), Népszabadság is Hungary’s largest daily devoted to politics and public affairs. Népszabadság Zrt., the publisher, is a company in which Ringier is the majority owner and the Free Press Foundation, controlled by the Hungarian Socialist Party, has a 27 percent interest. In this way, Népszabadság is an admittedly left-wing paper, if only because of its association with the largest opposition party.

The merger of Ringier and Axel Springer, the two great European publishers, would have had a major influence on the Hungarian daily market, in which both companies have been major actors. In 2011, preempting a decision by the Hungarian Competition Authority, the National Media and Infocommunications Authority (NMHH) issued a position against the merger in the capacity of competent specialized authority, citing fears of a less diversified media. This amounted to thwarting a process of consolidation — one that, from the point of view of market actors at least, is a natural reaction to a shrinking market and dwindling revenues.

The circulation, readership and revenues of Népszabadság have been diminishing for years, and the paper has been producing losses. The frustration of the Axel Springer-Ringier merger has made it reasonable to expect something to happen with a paper clearly unable to stay in business for much longer in its current state. Recently, ambivalent accounts have surfaced about the potential new ownership. At first, Ringier was widely rumored to go for a 100 percent interest. This made sense, given the good position of the Swiss-based company to set the paper on a sustainable course by cutting costs.

By July there were reports of a diametrically opposed scenario in which Ringier would give away its majority stake to the Free Press Foundation for the nominal sum of 1 Euro, rendering the paper a party organ to the bone. According to stories published in the Hungarian press, Népszabadság owners went to Berlin to negotiate with the mediation of former Chancellor Gerhard Schroder, here acting as advisor for Ringier. If this scenario had been carried to its logical conclusion, the specialized authority would probably have approved the merger upon a resubmitted application, given that the leading political daily would no longer have been interested in the transaction.

August saw yet another turn, with socialist-turned-right-wing politician Sándor Csintalan, who is close to the current government, emerging as a potential buyer.  Surprisingly enough, Csintalan has vowed to maintain democratic conditions in the media, although he stopped short of telling reporters how he would shore up the funds to buy the paper. 

In recent days, there have been reports that Ringier is looking to sell its stake to the Free Press Foundation after all, albeit no longer for the symbolic price of one Euro. The new price is proposed to be HUF 1.5 billion, or approximately 5.4 million Euro, although only 3 million, or 10,700 Euro of this would be payable by the party foundation upon the execution of the contract. Additionally, the contract would stipulate the use of certain printing and distribution services, as Ringier owns modern printing facilities and holds interests in distribution.

As we speak, in early September, 2012, the fate of Hungary’s biggest daily remains in the wings. The outcome is of particularly keen interest if only because the other three nationwide political dailies (Magyar Nemzet, Magyar Hírlap, Népszava) are clearly linked with political parties by virtue of their ownership — two with the political right, one with the left. In the event that the last professional investor pulls out of the market of nationwide political dailies and Népszabadság is acquired by a party foundation, the last iota of a chance will be lost for any political daily in the country to operate as an independent business venture. More likely than not, this would cause incalculable damage to democratic transparency and hardly precipitate the emergence of a pluralistic media system.