In post-1989 Hungary, breaking the “leftist-liberal media supremacy” as well as establishing a state-funded “counterbalance” to it was a long-standing political demand from the conservative right. Although in the early 90s, the notion appeared on the far-right fringe, Viktor Orbán endorsed it in his “conservative turn” around the mid-90s, and started to systematically working on bringing about a pro-rightist media system. After the first Orbán-government was elected in 1998, the prime minister spent a considerable amount of time and public money strengthening the daily print newspaper Magyar Nemzet and establishing the weekly Heti Válasz as the cornerstones of an openly pro-Fidesz media. Lajos Simicska had already surfaced on the scene at this time, as the owner of one of Hungary’s major billboard advertisement companies, Mahir Cityposter. This, together with a traditional pro-government alignment of Hungarian public television provided a considerable support for the right during election campaigns, compared to previous years.

 

Orbán’s 2002 election defeat started a major restructuring and rethinking of pro-Fidesz media. In 2005, a private news channel, Hír Televízió was established from public donations and significant investment from rightist businessmen. With the collapse of Hungary’s Socialist-Liberal political network, the road for dominating the market was opened for these media owners. Around 2010, businessmen around Fidesz started to expand their assets, buying other outdoor advertisement companies (Publimont, Euro Publicity), and securing a nationwide commercial radio frequency (Class FM) following a notorious backdoor deal with the socialists. By 2011, Hungary’s free handout journal Metropol was acquired by Károly Fonyó, Simicska’s associate businessmen, complementing a Fidesz-portfolio already containing five billboard companies, a national and a Budapest radio frequency, three daily newspapers, two weeklies, and two nationwide television channels. In addition, media regulations by National Media and Infocommunications Authority) were amended in such a way that it would become entirely pro-Fidesz.

 

The objective afterwards was to make this portfolio financially operative and viable. For this, Fidesz started to use its legislative two-thirds majority and replaced private market advertisement, a market that got hit hard by the global recession with its very own state advertisement support scheme. A series of legal amendments, new legislation and the share of public advertising made it possible for these media companies to become key players on the media market. The laws often targeted private competitors, making it easy to sideline them. What is more, Fidesz secured the cooperation of several media agencies and the tacit cooperation of media advocacy organizations during its takeover. The laws created a media environment that was less transparent than before, creating obstacles for source-protection and for accessing information to those outside its friendly circle. For a long time, the majority of private media outlets accepted the new situation as a given, trying to cooperate to keep their existing operations unharmed. The relative silence was broken when in the summer of 2014, the government forcefully removed the editor-in-chief of online journal Origo, a Deutsche Telekom-owned news outlet.

 

The major issues that the situation and its assessment raised include the “revolving door-effect”, an non-transparent overlap between the persons and interests in the private sector stakeholders and public officials, as well as lawmakers, suggesting what amounted to a state-capture. This in effect minimizes competition on the market, causing funds to flow only in one direction from the state to a single interest group. The simulation of competition, the lack of transparency and decreasing opportunities for legal remedy all suggest a very high level of “legalized corruption” in the system.

 

 

After a very general introduction, the article provides detailed conclusions about the present state of Hungarian media and advertisement ownership structure, it also presents key players. The biggest circle of owners is Lajos Simicska and his close associates, Zsolt Nyerges, Károly Fonyó and Gábor Liszkay followed by a second, rival group of interest lead by government-spin doctor Árpád Habony. People connected to the former group can be found in several major state companies (image 1.) (National Lottery, State Debt Revovery Center, Hungarian Tourism, Hungarian Electricity, National Development Agency, Hungarian Bank of Development, Hungarian Post) and ministries, state institutions which were the biggest state advertisers also. The head of Hungary’s media authority, Monika Karas is a former lawyer coming from Simicska’s media empire. The head of Public Procurement Authority, Róbert Gajdos can be linked to the oligarch as well.

 

The Habony-Rogán group is still embryonic, not having a proper media portfolio as of the end of 2014, only enhancing its interests by acquiring the economic daily Napi Gazdaság.

 

 

 

Nearly half of all public communications funds (HUF 30 billion out of the total 60 billion) between May 1 2010 and April 30 2014 were distributed to a single applicant, or without a formal competition. The more money there was at stake, the fewer applicants there were. Moreover, over two-thirds of the whole amount of state funds was secured by three media/advertising agencies: I.M.G., Vivaki Group (Starcom, ZenithOptimedia) and Bell & Partners. Five out of the ten biggest winner agencies can be linked to interest groups close to the government. Before the second Orbán government, none of these agencies were among the primary beneficiaries of public tenders; 62.6% of the whole state communication budget has been awarded following little or no competition. Amongst the greatest winners, I.M.G. received 77.9% of its state contracts without a competition, while Bell & Partners received 70.43% in the same manner.

 

 

The fact that 60% of the funds were secured by three agencies, (70% by five of them) and the very visible lack of even formal competition during the process already raises significant corruption risks in the system. I.M.G. often enjoyed exclusively beneficial treatment on behalf of the government.

 

 

 

According to detailed analysis, 51.66% of state advertisements ended up at the public media, as well as private media owned by businessmen close to Fidesz. The amount was the highest at those media segments where these businessmen have companies: radio (86.06%) followed by outdoor advertising (74.12%) and daily newspapers (68.23%). Wherever Fidesz-allied groups have an interest in the media, it is their outlets where the state and its preferred agencies will spend advertising money. While tendencies were the same under the previous government, the picture before was much less disproportionate. Prices in this pro-government media environment, however, are extremely high and consequently would be defined as uncompetitive in a free-market environment. While Hungarian private and independent media sector was by and large a loss/generating industry in the past four years, pro-government media was making HUF 20 billion in profit based mostly on state advertisements throughout the whole period, and the Hungarian state effectively kept these enterprises alive and well. As a result, media outlets and advertisement companies close to Fidesz reached an overwhelming majority by the 2014 general elections.

 

 

 

 

 

 

The article concludes that many elements of the Hungarian system can also be found in Bulgaria, Russia and Turkey, and even though serious violations of press freedom (imprisonment, assassinations, etc.) are not characteristic in Hungary, press freedom is seriously violated during everyday operations. Suggestions for a way out of this situation include a redistribution of media regulatory powers to the sub-national and EU levels.