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Železný takes Slovak plunge

Czech media baron Vladimír Železný, a man who has taken the Czech Republic to international arbitration and is facing a litany of legal action over his business activities, is promising to be a new force in the world of Slovak television after his September 16 purchase of a 70% stake in Mac TV, operator of regional Slovak station TV Global.
His leap onto the Slovak market immediately caused a stir. Pavol Rusko, owner of Slovakia's most popular station, private TV Markíza, and thus Železný's biggest rival, has derided his potential competitor station as a "trash can for the unsuccessful programmes" of Czech TV Nova.
Železný's acquisition of Global fulfilled the Czech businessman's long-publicised aim to break into Slovak television. General manager and shareholder at TV Nova, the most watched station in the Czech Republic, Železný's arrival promises a shake-up in what is a troubled market almost monopolised by Markíza, say some of his potential competitors and media watchdogs.


TV Nova's Železný has sensed demand in Slovakia for more competition.
photo: TASR

Czech media baron Vladimír Železný, a man who has taken the Czech Republic to international arbitration and is facing a litany of legal action over his business activities, is promising to be a new force in the world of Slovak television after his September 16 purchase of a 70% stake in Mac TV, operator of regional Slovak station TV Global.

His leap onto the Slovak market immediately caused a stir. Pavol Rusko, owner of Slovakia's most popular station, private TV Markíza, and thus Železný's biggest rival, has derided his potential competitor station as a "trash can for the unsuccessful programmes" of Czech TV Nova.

Železný's acquisition of Global fulfilled the Czech businessman's long-publicised aim to break into Slovak television. General manager and shareholder at TV Nova, the most watched station in the Czech Republic, Železný's arrival promises a shake-up in what is a troubled market almost monopolised by Markíza, say some of his potential competitors and media watchdogs.

Rusko's Markíza dominates the Slovak airwaves, commanding an 85% slice of the TV advertising market and an equally dominant 74% of the country's viewership.

The enmity between Rusko and Železný, evidenced in comments by the Markíza chief since news of the Global purchase, is likely to run deeper, say some observers, as parliamentary elections in September 2002 come closer and Rusko's documented use of his channel to support his own political party, the Alliance of New Citizens (Ano), is countered.

When launching Ano in April this year Rusko promised that he would not use Markíza as a promotional tool for his own party. However, monitoring from April 22 to May 20 by the Memo 98 independent media monitoring organisation found that Markíza had given Ano the third most airtime (6.7% of newscasts) of any political party, more than double that which Rusko's party was afforded by public STV and private TV Luna put together.

A report from the same organisation, which was due to be released September 28 as The Slovak Spectator went to print, was expected to confront Markíza with evidence of further biased coverage of Ano over other political parties.

"Basically, Ano is the only political party receiving positive coverage on Markíza," said Rastislav Kužel of Memo. "And before the elections, you can be sure Rusko will not want to see another TV channel producing clear information."

Železný's entry into Slovakia is also expected to cut a swathe into Markíza's dominant share of the advertising market.

"Markíza's share of the advertising and viewing markets is bound to be diluted. It will remain the most important commercial station in Slovakia, but there are other niches which Global may fill. I am personally thrilled by the prospect of a new competitor on the TV market. I wouldn't say that the situation on today's market was unfair - it's more a reflection of Slovakia's economic situation - but there is definitely room for a new station," said Dan Jurkovič, creative director at media agency Universal McCann.

Some other competitors have even welcomed their new rival. Head of the recently launched all-news channel TA3, Martin Lengyel, told The Slovak Spectator that he was "in favour of Mr Železný's arrival" and that he had already contacted Global TV to offer them his support.

"Right now, Markíza has a monopoly on the popular TV market, and that monopoly is killing the advertising market. Železný's arrival will eat into that share. Advertisers will be motivated to split money between different clients," he explained.

"Yes, it will affect us in that there will be more competition on the market, but the market actually needs to have broader competition. Global is a more general station [than we are], and there are many more positives for us in Železný buying Global than negatives."

Trying times

However, Železný will be entering a market at a time of upheaval. While Markíza has dominated viewing figures since its launch in 1996, other attempts to launch rival TV stations have faltered badly, while state run station STV has found itself mired in huge debts.

Only last week the private TV Luna, which has been looking for an investor for more than a year, stopped broadcasting. Staff had allegedly not been paid for months. VTV, a station launched in 1995, ceased broadcasts in autumn 1999 after running up debts of over 1.3 billion crowns.

STV has been forced almost to the brink of bankruptcy with debts of 700 million crowns, 600 million of that to former state-owned telecoms company Slovenské telekomunikácie (ST). It has since managed to pay the debts to ST, but remains desperately short of cash. Its second channel, STV 2, generally does not begin broadcasting before 4pm.

The quality of programming by Slovak stations, especially news coverage, has also been questioned. "In terms of the news, for information you're not getting much out of Markíza other than car accidents. All you really see on their news [broadcasts] is a lot of blood," said Kužel.

"Many of TV Nova's shows are of a much higher standard than those shown on Markíza, for example prime time news is much better, comparable even to similar broadcasts in the West."

Not all clear

Rusko declined to comment on Železný's purchase when contacted by The Slovak Spectator, preferring to wait until the Czech government made an official announcement about international arbitration rulings on Železný's dispute with Central European Media Enterprises (CME), and the Slovak Council for Broadcasting and Retransmission's approval of his entry. A decision is expected to be issued by the council on October 8 or 9.

CME has been in legal battles with Železný's CET21 company since 1999 over Nova broadcasting. Železný broke with CNTS, CME's Dutch subsidiary and former servicing company for Nova that year, taking the station's licence for himkself, and beginning Nova broadcasts without CNTS. CME claimed the move was in breach of contract, and later demanded the Czech Republic return the money for its investment.

On September 14 an international tribunal in Stockholm ruled that the Czech Republic had breached an agreement with the Netherlands on mutual protection of investments. Commentators in the Czech Republic have said that the dispute with CME has damaged the reputations of both Železný himself and the Czech Republic as an investment destination.

Železný has shrugged off the recent set-back in Stockholm and remains confident of what he can do in Slovakia. "The plan we have long been talking about is becoming reality. We are looking forward to at last being able to offer Slovak viewers television of a quality so far known only to some Slovak citizens," he said. Global plans to take a 15-20% share in advertising within 18 months.

However, Rusko is equally confident of retaining Markíza's dominance, dismissing Železný's plans in local newspaper reports as nothing more than a "media ploy". Any fears he has over the impact Global's new owner could have on Markíza's position as the number one Slovak broadcaster should be allayed in the short term at least, Kužel pointed out.

"TV Global is a local station, and there is a question mark over how much competition it can provide to Markíza. Železný is powerful, but he also lost a big legal case recently with CME, and as you can see with Luna and VTV, it's hard to fight against Markíza," he said.

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