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TV Markíza joins ranks of Swedish media giant

A major share in Slovakia's largest private TV station, TV Markíza, was included as part of a parcel of properties in a major, late March merger of Swedish television and radio broadcaster SBS and American-owned Central European Media Enterprises (CME). CME owns a 49% stake in the company which operates TV Markíza.
Jeffrey Silverberg, the financial director with TV Markíza and a representative of CME, said that the merger is a very positive step for the station.
"SBS will, after completion of the merger, become the largest television broadcaster in Europe. That will also help Markíza in its long term plans," he said.

A major share in Slovakia's largest private TV station, TV Markíza, was included as part of a parcel of properties in a major, late March merger of Swedish television and radio broadcaster SBS and American-owned Central European Media Enterprises (CME). CME owns a 49% stake in the company which operates TV Markíza.

Jeffrey Silverberg, the financial director with TV Markíza and a representative of CME, said that the merger is a very positive step for the station.

"SBS will, after completion of the merger, become the largest television broadcaster in Europe. That will also help Markíza in its long term plans," he said.

With the recent purchase of VTV by the relatively unknown Slovak investor, Ladislav Milko, still in the air, the past few months have seen considerable changes in Slovak media ownership. But the chairman of the Slovak Syndicate of Journalists, Ján Füle, said he believed the recent changes to Markíza ownership are unrelated to other recent media sales in Slovakia, and should not change the political direction of the station.

"SBS is a standard group which is interested in the television broadcasting business," he said, adding that that was why the merger with CME had purely commercial character. "It's just an expression of the crisis that CME was going through."

SBS made the deal to acquire CME in a procedure which started by signing a merger agreement on March 29, though details of the deal were only later released to the press. Woody Knight, vice chairman of SBS, told The Slovak Spectator that "the procedure should be completed by the end of this year."

The transaction will give current CME shareholders one SBS share in exchange for two CME shares, according to a source close to SBS who requested anonymity, "After the merger, CME will no longer exist as a company," the source said.

The merger was not a cash purchase, but an exchange of stocks only. The value of the deal was $615 million, which was the combined value of SBS and CME shares on the New York Stock Exchange on the day of signing the agreement, the source said.

Knight said CME had bought the company in part due to the strength of TV Markíza in Slovakia, and TV Nova in the neighbouring Czech Republic. "The merger was just a logical step in a process of SBS expansion on the Central European market," he said

Greater transparency may follow

The purchase of CME may cast new light on the intricate ownership details of TV Markíza, which has consistently evaded giving clear answers about the shareholders who control the company.

For example, the extent to which general director Pavol Rusko owns shares in the Slovak Television Company (STS), the provider company of Markíza, is unclear.

After STS's shareholder meeting on February 12, Rusko announced the change of the company's ownership structure, which gave 50% to a company called Mirox, controlled by Rusko himself, while only 0.5% went to Sylvia Volzová, Rusko's former business partner who used to hold an equal percentage of shares as Rusko. The change, however, was not confirmed by Volzová, who was not invited to the meeting.

"I denounce the meeting as a fraud on my person, done by Pavol Rusko and CME," Volzová wrote in a statement. She also withdrew the proposal of Minox from the Council for Radio and Television Broadcasting (RRTV), citing that it was not the legitimate legal representative of Markíza. The RRTV accepted her complaint and declined to ratify the ownership change.

Rusko stood his ground and announced his intention to resubmit the proposal to the RRTV. "That's what we've decided to do along with CME, because the only intention of Volzová is to bring the underworld into Markíza," he said.

Despite Rusko's unclear position in the ownership structure of TV Markíza, his role in a newly structured TV Markíza will likely stay the same.

SBS's Knight saw Rusko as a successful media manager. "Rusko is a very accomplished and capable broadcaster, so we don't have a reason to request a change at his position," he said, adding that SBS doesn't expect any changes to TV Markíza's programme structure.

Rusko welcomed the merger, explaining that since CME was a minor shareholder, he didn't expect any change to the programme structure. "There's no reason to make changes on a well operating engine," he said.

Regarding Markíza's television programming, Mistrík added that the SBS would probably bring better quality to Markíza and that it would make the station follow licence conditions more strictly than it used to. According to the RRTV, Markíza currently violates Slovak limits by containing more than 45% American-produced programming.

Rusko's long fingers

Besides Markíza, Rusko has been known for his general interest in Slovak media. Recently, he was connected with daily newspaper Národná Obroda, which he expressed interest in purchasing. In fact, Füle of the Slovak Syndicate of Journalists told The Slovak Spectator on April 7 that Rusko had already bought the daily.

When asked if he was the new owner of the daily, Rusko said, "I don't really know." He then explained that his intention is to "help Národná Obroda along with my friends, since we are a group of investors who are interested in this daily." He admitted that he would like to change the structure of the daily, as he prefers political news to business and economy stories.

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