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Wave of ownership changes sweeps Slovak print media

The month of July has seen changes in the ownership schemes of three of the nation's largest daily newspapers: Národná obroda, Práca, and Sme. Of the deals, insiders said that only one could be considered "standard."
Print media observers said that the Slovak media was viewed by international investors as a promising area of investment because the companies owning the print media were in a general state of struggle. They added, however, that the newcomers investing into Národná obroda and Práca were unlikely partners, and that they were likely making efforts to purchase Slovak papers as a means of turning them into political mouthpieces.
"The quality of Slovak press companies is poor," said Ján Füle, head of the Slovak Syndicate of Journalists. "This makes it a good target for potential investors. But there are two kinds of investors: standard and non-standard. If you look at the investors into Práca and Národná obroda, they represent the latter because they have no previous experience in media."

The month of July has seen changes in the ownership schemes of three of the nation's largest daily newspapers: Národná obroda, Práca, and Sme. Of the deals, insiders said that only one could be considered "standard."

Print media observers said that the Slovak media was viewed by international investors as a promising area of investment because the companies owning the print media were in a general state of struggle. They added, however, that the newcomers investing into Národná obroda and Práca were unlikely partners, and that they were likely making efforts to purchase Slovak papers as a means of turning them into political mouthpieces.

"The quality of Slovak press companies is poor," said Ján Füle, head of the Slovak Syndicate of Journalists. "This makes it a good target for potential investors. But there are two kinds of investors: standard and non-standard. If you look at the investors into Práca and Národná obroda, they represent the latter because they have no previous experience in media."

A previously unknown firm called 1st National Media (1NM) bought a 50% stake in the labour unionist daily paper Práca. One media insider, who spoke on the condition of anonymity, said that the firm had close ties to brokerage house Slavia Capital, which he said was "pouring money into 1st National Media." Slavia Capital has also in the past been linked to former Economy Minister Ľudov't Černák.

But although 1st National Media head Vladim'r Miškovský, now also the general director of Práca, is a Democratic Union party mate with Černák, officials from both Slavia Capital and 1MN denied any political links.

"Mr. [Dušan] Drobuliak [member of 1NM board of directors] and Mr. Miškovský are my good friends," said Rudolf Č'žik, head of Slavia Capital's strategy department. "But we have no stake in 1NM. We gave them a loan for the purchase of Práca, but I know that what we gave them did not cover the whole price they paid for the daily."

Č'žik added: "The decision was made both because 1NM has an advertising contract with Slavia Capital [distributing Slavia ads in Slovak printed media] and because we have friendly relations with them. Politics were not involved in this at all."

Drobuliak said his company intended to expand its media influence through investment into Slovak dailies, weeklies and electronic media like radio stations. "Práca is the only title that we have acquired so far but we are negotiating with other papers too," he said. The goal of the Práca venture, he added was "to make the paper an opinion-forming newspaper."

But Füle remained sceptical: "1NM are not publishers and they have no experience in journalism," he said. Grigorij Mesežnikov, head of Institute for Public Affairs, added that "when somebody invests into a paper, they definitely expect some sort of profit."

The second 'non-standard' printed press deal involved the daily Národná obroda, which sold a 50% stake to Slovak Leopold J. Danihels who currently lives in the US. The sale, which when the Spectator went to print was expected to be announced on July 16, was confirmed on July 12 by Štefan Jaška, general director of the paper.

Jaška would not reveal a contact for Danihels, who has attempted to attain a stake in the daily two times already. But in an interview he gave to his new paper, Danihels said that his motivation was "not driven by the desire to get into the Slovak media scene at any price. I just want to participate a little."

Füle said he doubted Danihels' ability to effectively run a Slovak business. "I don't know if Mr. Danihels has the sufficient experience nor the contacts necessary on this scene to do well," he said.

The final newspaper transaction occurred with the Slovak publishing house VMV, which merged on July 1 with the German publisher Verlagsgruppe Passau (VGP) in an attempt to become one of the major players on the Slovak print press market. Two joint enterprises - known as Grand Press and Petit Press - were created, with the German side promising investments of roughly 40 million German Marks ($19.4 million) over the next 3 years.

According to Füle, the deal had been "standard. Experienced publishers get together because small and weak ones never survive in the media."

VGP, which owns stakes in regional and national newspaper chains in Italy, the Czech Republic and Poland said the venture should establish a foothold for the Germans in Slovakia. "We decided to make the deal because our strong newspapers together with the Sme-group can become a very important Slovak player," said Wolfgang Chmelir, assistant to VGP's general manager.

Ed note: Grand Press owns 51% of shares in The Rock s.r.o., which publishes The Slovak Spectator.

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