Among local radio stations in Croatia, 67 percent are privately owned, while local governments are major shareholders in 25.5 percent of them (out of which 12 percent, or five radio stations, are owned solely by local governments). On the surface of it, these statistics may look as reasonably acceptable – especially given the fact that many local radio stations were licensed in the early to mid 90's (when private ownership of media was not yet legally defined), but there are other important elements to be taken into equation. Careful reading of the Register of Owners with the Agency of Electronic Media shows that almost one third (32) out of 103 privately owned local radio stations in Croatia are owned by eight individuals only. Furthermore, most local radio stations are members of a number of “networks”, owned/controlled by a handful of individuals; chiefly from the same group of “the most frequent” owners. The rationale behind this is obvious: networks can, ideally, increase the advertising income of local radio and/or TV stations by offering a “national” audience to local media or lowering costs through jointly produced programming, etc. In reality, however, networks tend to reduce the proportion of locally produced and locally-oriented programming, thus intervening in the very essence of local media: locally produced and “colored” programming aimed at local audiences. Efficient implementation of the “network” model is one of the main reasons for lack of interest in the process of local media privatization: individual owners and their respective business lobbies have already penetrated the ownership structure of (commercially viable) local media of their choice; other media are being efficiently controlled with “networking” mechanisms. Networks supply (news and other) productions and a portion of networks’ advertising income to more than 50 percent of local commercial radio stations. Without networks, commercial radio stations would have to increase the number of employees (for substituting network productions) with lower advertising income, which is simply not realistic.

 

Croatia is just about to enter the seventh year of recession that has literary halved circulation figures and advertising income. An end to the crisis is not in sight: in 2015 even “zero” growth will be considered a “success”, while not even the most optimistic scenarios foresee reaching 2006/2007 figures in terms of income and employment before 2020.

It is disputable whether the media industry should have adopted its business models and “survival kits” in the early stages of the crisis, rather than passively waiting for “good times” to come back. The fact is that most local media have managed to weather the recession (unlike some of the nearly iconic national media), but with consequences that have seriously affected their reliability, integrity and even – as elaborated above under “networks” – their very raison d’être.

 

The ownership structure is merely one, although important, element that seriously compromises local media integrity. It is obvious and almost self-explanatory that media with a local government ownership structure (which usually includes benefits such as free or under-market prices for office/newsroom space) are generally not considered prone to criticism towards the authorities they live off; even though this type of criticism, along with providing local service information, should be their core activity. The same goes for most local media, including those that are 100 percent privately owned: most local broadcast media, regardless of the ownership structure, have contracts with local authorities that subsidize, or entirely finance, some of the local news and information production. The financial crisis has nearly devastated small and medium size businesses and service providers and consequently has dramatically affected the local advertising pool, as one of three “constitutive” financial pillars of local media. The second pillar – the above mentioned financial support from local authorities – is, as elaborated, not only utterly questionable when it comes to media integrity, but is gradually drying up. New tax regulation will take from 8 -12 percent from local government budgets and direct it to the central budget. This means that local governments will have barely enough to cover basic infrastructure maintenance and salaries and there will certainly be less money for media and culture. In times of crisis, local governments naturally collect less tax; in addition, recent fiscal regulations left less local income at their disposal, with a higher percentage flowing into the national budget. This means that less money can “buy” more minutes of programming and more influence than ever. Fewer owners of local media (especially radio stations) and high dependence on networks controlled by the same owners additionally strengthen editorial control, making local media more vulnerable to business lobbies and interests of their owners. It should not be forgotten that local governments control the advertising market generated by local public companies, which gives them additional leverage to control local media.

 

Such an environment, characterized by absolutely insecure job positions and financial dependence on local authorities, media owners and connected business lobbies, is by definition a fertile soil for self-censorship or, more often, avoiding any “disputable” issues in reporting. Local journalists and editors are especially exposed to this type of “soft” but very efficient pressure: the risk of losing one’s job is high, while any type of professional protection seems to be light years away. A cynic could say there is no need for brutal attacks on journalists; “internalization” of censorship does the job more efficiently.

 

This is why the third pillar – financial support from public sources – has become increasingly important. It would be safe to say that exactly thanks to this “pillar”, many local media still exist and/or leave at least a few traces of quality production.