Soft Censorship Hungary 2015

Introduction – Crony capitalism and the media market

The methods and trends of the state’s interventions in media policy and the media system after 2010 were both a reflection of and a blueprint for the general workings of the government. When the Media Act was adopted, it provided one of the early glimpses into what would soon emerge as the predominant model of lawmaking, which essentially involved the hollowing out of the legislative process. The system of institutions created by this law made clear that positions that had previously been filled based on political deals between parties would now be filled based on unilateral decisions by a hegemonic governing party. The European debates surrounding this law, and the trajectory of the confrontation with European institutions, was an important experience for Orbán in showing where the boundaries lie which he cannot transgress without causing backlash at the European level. However, it simultaneously also delineated the boundaries of the area within which he can do as he pleases, including the adoption of any autocratic measure he sees fit, as long as he is mindful of the boundary he may not cross. The expansion of media enterprises that are in a symbiotic relationship with Fidesz, and the concomitant squeezing out of foreign investors from the media market, serve as a model for the general scheme whereby the governing party has sought to take control of other markets as well.

The media policy/media market developments after the 2014 elections once again serve as the master plan for the changes ongoing in all areas of political and economic life. Fidesz’s economic hinterland and media empire had been assiduously built over the years by Prime Minister Viktor Orbán’s friend Lajos Simicska. In 2015, however, a spectacular conflict erupted between these two protagonists, and this was the signal for launching the efforts at dismantling the Simicska media empire. The underlying process was a massive restructuring of Fidesz’s internal power relations. Up until 2014, media policy decisions and media policy developments manifested a peculiar intertwinement of politics and business, which was in fact reflective of the way in which political and economic life in generally worked inHungary: political power rested with Viktor Orbán, while economic power was concentrated in the hands of Lajos Simicska. Nevertheless, these two centres of power could not be fully independent of one another, and they could not coexist without major friction. The need to exercise economic power more effectively, and the assertion of economic interests – where Orbán and Simicska’s economic interests mostly coincided – made it increasingly necessary for Simicska to become involved in the political exercise of power as well. An obvious result is that over time parallel structures of power emerged, which also grew increasingly less respectful of their mutual boundaries.

The pre-2014 situation is aptly characterised by the concept of state capture. Simicska, who controlled the economic segment of power and was hegemonic in his own area of control, increasingly began to shape political decisions in his own image. Nevertheless, even in this situation the fundamental problem from Orbán’s perspective was not that the efforts of certain economic/business circles to reshape the legal-political environment – which provides the framework wherein the entire economy operates – were directed at promoting their own interests. These efforts were, after all, largely aligned with the interests of those exercising political power. Orbán and Simicska’s interests and goals were presumably largely similar until shortly before the 2014 elections. Orbán – and in a broader sense Fidesz – was just as instrumental in the process of state capture as Simicska, even though his control was limited to the other segment of the arsenal these players used to further this goal.

Nonetheless, by 2014 the breadth of Simicska’s power, economic and recently political as well, had apparently become too overwhelming, and it had emerged as a greater constraint on the prime minister’s own power than any other legal, international or political limitation. This led Orbán to conclude that he had to push Simicska out of both spheres of power – economic and political alike – at least to the furthest extent possible without triggering a conflict that was massive enough to bury them both. The Orbán-Simicska conflict is a typical Cold War-like situation, in that that the parties take turns at arming their nuclear warheads but Armageddon ultimately never ensues.

The most important lesson for Orbán was that power cannot be bipolar. Orbán will never again allow a situation to emerge where anyone within Fidesz apart from the prime minister himself will be in a position to exercise power autonomously. The Simicska period rendered it obvious that such a constellation makes the party and Orbán vulnerable, economically and especially in terms of access to media platforms.

Correspondingly, since 2014 Orbán has been consistently dividing economic power – and, as part of that, media power – between a group of persons who are unconditionally loyal to him and who are at his mercy. The previously centralised system was replaced by a decentralised system consisting of several players, and after 2014 the new “cronies” began to take over almost the entirety of the power and economic positions previously held by Simicska. In this particular constellation Orbán is finally left without any checks on his power or countervailing poles. By redistributing resources, Orbán has built a „crony capitalism” in which no one controls sufficient resources to emerge as an autonomous power factor.

To reshape the media system, Orbán inherited the set of instruments that had been first designed by Simicska. There is a market expansion of the pro-Fidesz interests at every level of the value chain, be it through a politically biased distribution of radio frequencies or the manipulative allocation of state advertisements – we have seen these before 2014 as well. The lesson of 2015 is that the same set of instruments can be turned against the previous beneficiary at a moment’s notice, and it can be used simultaneously to bolster the positions of new favourites. The same financial, legal and informational resources that previously served the Simicska-type of media empire now serve new players.

Nevertheless, the replacement of the Simicska empire is not at all a completely smooth process. Simicska controls sufficient financial means and has enough influence over other players to ensure the survival of his media business at least until the next election, even as these are gradually morphing into media that are now occasionally critical of the government – to an extent that is still acceptable to their audiences – even as they retain their fundamentally right-wing political outlook. Moreover, relying on the remnants of his previously extensive positions, Simicska is even capable of slowing the consolidation of the new players’ positions. One obvious instance of this is the litigation over the ownership rights of TV2, which might lead to several years of legal wrangling.

This study is specifically aboutHungary, but the events there might also be instructive in understanding broader processes in the central and eastern European region. In a country with a small market, where the level of political culture is traditionally low, a newly ascendant capitalist stratum can inflict massive damage on the public sphere. The goal of the new elite is to expand and consolidate its economic positions; absurdly, EU subsidies provide the basis for these newly won economic positions. This is what the struggle, which uses essentially all potential avenues of corruption, is about. To make this possible, the players involved also need to control the levers of political power, which would not be sustainable without limiting the free operation of the public sphere. Thus the Orbán government implemented a tripartite structure of power: it has stable political power through its appropriation of EU funds and the pressure it exerts on the media.

Soft censorship has not at all diminished in the Hungarian media system in 2015, nothing has changed in this regard but the players involved. The manipulations of the media structure and of media market processes for political ends continue to be the main propellants of media policies. The refugee crisis and the incitement in the government communication against migrants left no doubt that the transformation of the media system would turn a significant portion of the media system into nothing more than the instruments of the basest political intentions. The role that state media have assumed in this process is reminiscent of the darkest periods in history. The levels of public funding for state media, which exceed anything seen before by a large margin, and the legal-institutional framework that allows for spending these funds essentially without any control, has in fact yielded its own rewards.

The only encouraging signs were the victory scored by RTL over the issue of the advertising tax – a victory that was nowhere near as beneficial for other players in the market – and, more importantly, the professional achievements of independent investigative journalism outfits (Átlátszó, Direkt36).

The project was supported by Democracy& Media Foundation.