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VTV deal puzzles media moguls

After weeks of speculation over who would eventually buy the deeply indebted cable station VTV, the public woke up on March 18 to find the new owner was Ladislav Milko, an active member of the coalition Democratic Left party (SDĽ).
VTV was formed in 1995 as a private, commercial television channel broadcasting from Bratislava on cable via satellite, covering all of Slovakia and some areas of Europe.
Given that Milko's name was never included among those parties interested in buying VTV, at least one media figure said he suspected that Milko was only a front for another, as-yet unknown investor, whose interest in the channel was more serious.


VTV launched broadcasting on April 22, 1995, but never managed to make a success of the business. Now over one billion Slovak crowns in debt, VTV has been sold to Ladislav Milko, a member of the government SDĽ party.
photo: TASR

After weeks of speculation over who would eventually buy the deeply indebted cable station VTV, the public woke up on March 18 to find the new owner was Ladislav Milko, an active member of the coalition Democratic Left party (SDĽ).

VTV was formed in 1995 as a private, commercial television channel broadcasting from Bratislava on cable via satellite, covering all of Slovakia and some areas of Europe.

Given that Milko's name was never included among those parties interested in buying VTV, at least one media figure said he suspected that Milko was only a front for another, as-yet unknown investor, whose interest in the channel was more serious.

"The purchase is a puzzle," said Pavol Rusko, general director of the private TV Markíza. Rusko and Slovak financier Jozef Majský had been among the most vocal bidders for VTV until Milko's surprise purchase.

"I ask myself, who is Mr. Milko and where did he get his [financial] sources from, if he dares to buy and run a TV station which has a 1.3 billion Slovak crown debt, without previous negotiations with advertising agencies and media partners," Rusko said. "He is either a mediator for a strong foreign investor, which I think is less probable, or the whole thing is just a speculative venture."

Milko, in fact, is an entrepreneur from Bratislava and was an SDĽ candidate for mayor in the second district of Bratislava in municipal elections last December. In an interview with the daily paper Sme, the only public statement he has made to date, Milko said he had purchased a 100% stake in VTV for 338,000 crowns ($8,450) from former owner Vladimír Poór. His motivation, he said, was "to succeed on the Slovak media market." He denied that his SDĽ connections would influence how he ran the station.

"No television station which becomes a servant of a political party can survive," said Milko. "Money is what should matter in television."

Indeed, Milko said, money, or rather a lack of it, was behind Poór's decision to sell. "He wanted to get rid of his obligations and debts in VTV," said Milko.

Who's behind the scene?

Only four days before Milko's official announcement of the purchase, TV Markíza's Rusko was still talking about his plans to restructure VTV. "The creditors are looking for a revitalisation project and we could, under certain conditions, offer it," he said on March 14, adding that the real investor was not to be Markíza, but a group of people "with whom I have some say."

Despite Rusko's apparent confidence that he would get the nod from Poór, VTV was instead sold to the unknown Milko. In the absence of a clear explanation of how and why Milko had acquired the station, the Slovak media circulated rumours that he was backed by Gamatex, the company which attempted a brutal takeover of TV Markíza last September, a few weeks before parliamentary elections.

Milko would neither deny nor confirm the suspicion that Gamatex stood behind him. "My partners have spoken with different groups," he said. "Of course, they also communicated with the men from Gamatex. However, we are not personally related."

Gamatex co-owner Marián Kočner, asked whether his company was the real owner of VTV, replied "not yet," adding that "once Milko tries to sell it, we'll be interested."

Dashed plans

For Pavol Rusko, the sale of VTV to Milko dashed his plans of media expansion. Rusko said on March 14 that he had planned to connect TV Markíza, VTV and a local channel in northern Slovakia, TV Sever, to increase his broadcast coverage area.

TV Sever is majority-owned by Diana Dubovská, a close friend of financier Majský. Both Dubovská and Rusko's wife Eva Rusková sit in the Slovak Parliament as deputies for the same political party - the coalition Party of Civic Reconciliation (SOP).

Majský himself had also been considering a merger of TV Sever and VTV. "My idea for VTV would be to combine satellite broadcasting with the terrestrial broadcasting of TV Sever, and thus reach a larger signal coverage area than Markíza," Majský told The Slovak Spectator three weeks before Milko's announcement of the purchase.

Peter Juráš, chairman of the media watchdog group, the Radio and Television Council, strongly opposed any move to connect the three TV stations.

"A media empire in Slovakia is unacceptable for the Council," he said, adding that the Council had a duty to prevent mass media monopolies from forming.

Following Milko's purchase, however, both the government and the formerly interested parties changed their tunes to emphasize what a white elephant the new owner had taken on. Majský, for one, told Sme that "I'm not a stunt man, I'm a businessman," when asked why he hadn't bought VTV. "I don't see any future or economic success in VTV... a TV station with a 1.3 billion crown debt has no chance of surviving," he added.

Ján Budaj, chairman of the Parliamentary Committee for Media and Culture, supported Majský's judgement, saying now that the station had been placed in the hands of a member of one of the ruling parties, debt incurred by VTV under the previous government would be difficult to recover. "Now VTV's creditors can tear their hair out, because the loans given to this channel had a purely political character," he said.

Budaj said that it was up to the Radio and Television Council to investigate the real ownership structure of VTV and require the new owner to submit a proposal for the restructuring of the station, since "VTV has not been fulfilling some of its legal obligations for a long time."

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