In the Czech Republic, New Masters for the Old Media

I used to write as a media critic for a couple of English-language business newspapers in Prague, both now defunct.

I was always writing about pressures on journalists and print media outlets in the Czech Republic, although of a different sort than in, say, the Balkans, where businessmen and politicians would take journalists by the collar and dictate what to write.

The Czech method was a bit more sophisticated and left fewer fingerprints. It relied on the complicity of publishers, advertisers, media buying agencies, politicians, sometimes journalists themselves, and the omnipresent PR soldiers.

Back then, in the noughties, Czech print journalists would tell me about pressure from their publishers, who were often businessmen with interests in major industries like real estate and finance. Their counterparts in foreign-owned media often complained their bosses had made clear which advertisers could not be touched in news stories.

But the sector has changed dramatically in the past few years as a slew of mainstream newspapers and magazines have changed owners.

The big shift started four years ago. In 2008, the German Handelsblatt group sold its majority stake in the Economia publishing house to mining tycoon Zdenek Bakala. Economia published the country’s most popular business paper, Hospodarske Noviny, and the weekly Ekonom, among others.

Then last year, three major titles – Tyden (The Week), Instinkt, and Profit – were bought by Empresa Media, a growing media group controlled by Czech entrepreneur Jaromir Soukup.

The latest in this series of acquisitions was the purchase of the popular Euro business weekly in early June by the Mlada fronta publishing house. Mlada fronta is the publisher of the popular daily E15 and was looking to add a business title to its stable, its representatives said.

It was the second time in a year Euro had changed hands. In the autumn, the mighty PPF financial group sold it to Milan Prochazka, owner of a major brokerage house.

Bakala has been making headlines in the past year with his crusades against corruption and investments to sponsor skills education for young people. So far, I’ve seen nothing to suggest that he leans on any of his media outlets. On the contrary, major changes are planned for Economia’s titles aimed at boosting readership and sales.

However, this wave of sales consolidates ownership and shifts some major media properties from one sphere of influence to another. Euro was a stalwart in PPF’s empire, Tyden and Instinkt were controlled by real estate entrepreneur Sebastian Pawlowski, and Profit was held by oil magnate Karel Komarek.

All these bigwigs are now gone. In their place have emerged two poles of influence in the media, one grouped around Bakala and his Economia publishing house and the other around Soukup’s Empresa Media.

Some media observers have warned about the impact of the ownership changes on the independence of the media. In a September column for the aktualne.cz news website, veteran journalist and author Karel Hvizdala called the connections between businesses and media “unhealthy.” He warned about a new model of media conglomerate where the barriers between journalism, business, and politics no longer exist.

He may be right.

First, there is Soukup’s entry into magazines to consider. His ownership of the country’s largest media buying agency raises all manner of red flags. Advertisers have their own calculations and rational way of planning, but is it realistic to believe that Medea will not favor its own sister media outlets when looking for placements?

To say nothing of the chilling effect that cohabiting with a media buyer could have on journalists now employed in the same conglomerate. Medea has served more than 600 businesses in its 18 years, from banking to airlines to retailers to airports – you name it.

Second, the concentration of ownership in the hands of these two men and the prolonged economic downturn will combine to make disputes within the industry even more acrimonious than in the past. There is already bad blood between them: According to one analyst, Soukup’s Medea tried to steer advertisers away from Economia’s publications in 2008 after antitrust regulators received a complaint about alleged collusion between Medea and another media buyer.

Third, political bickering over the media is likely to intensify. Czech Prime Minister Petr Necas wants to strip Medea of its lucrative ad contracts with state-controlled companies, including electricity provider CEZ, forest manager Lesy CR, rail operator Ceske Drahy, and the postal service. Necas and his party colleagues are peeved, I’m told, that Medea handled the advertising for the opposition Social Democrats in the 2010 parliamentary elections campaign.

Not exactly fertile ground for independent journalism.

Editor’s note: This version clarifies the name of the daily newspaper published by the Mlada fronta company.