Media ownership and control, kind of a big deal

The radio show Peščanik is no longer broadcast on B92, another side of the disconcerting slide of that station to the political right. But it is still one of the most informative broadcasts coming out of Serbia — interviews that give the speaker time to say something substantive, commentary that is always provocative — and it is still available to people who want to listen to it online. This week’s broadcast (MP3) had an especially interesting feature: an interview with Verica Barać, the president of the state commission against corruption.

She was discussing a report that the commission had just released about control of the media in Serbia. The report is available online (go to the bottom if you want a PDF) and details several dimensions of control that might have been guessed from signs but are brought together here into one place. What follows is a very brief summary of the report.

The members of the commission identify three main sets of problems:

A lack of clarity regarding ownership of media
The economic influence of state institutions over media, and
The closeness of the state broadcaster RTS to political parties and state institutions

A few details on each of these points.

Ownership: Of the 30 largest media houses, 18 have owners who are unknown, primarily because they are formally held by offshore companies whose ownership structure is disguised from the public.Those companies “usually serve as fronts and have no corporate infrastructure in the country where they are registered. The owner is sometimes a person from Serbia, and sometimes the owner of a firm registered on Cyprus hides in a network of other companies registered around the world. Beyond that, if an offshore company is registered in one of the world’s tax havens, it is nearly impossible for anybody to find out the name of the owner, because instead of the name they will be more likely to find the name of the law firm that represents them”.

To give a few examples — the newspaper Večernje novosti, formally owned by three offshore firms, all of which are owned by the tycoon Milan Beko. Or the newspaper Press, registered to a company of unknown ownership on Cyprus, with some speculation putting the company in the hands of tycoons Miroslav Mišković or Milka Forcan, or possibly the Belgrade mayor Dragan Đilas. Or TV Prva, bought from Rupert Murdoch by Greek tycoon Minos Kyriakou and entirely owned by two Cyprus-registered companies under his control. Kyriakou also seems to have disguised ownership of RTV B92, arranged through a complex of firms registered on Cyprus. Or TV Avala, with its ownership by TV Pink owner Željko Mitrović disguised through a company registered in Austria. The list goes on, but the most interesting detail from it may be the magazine Vreme, formally owned by its employees but owing a large debt to a company owned by Miroslav Mišković.

Influence of state institutions: Up to 40 million euros goes from the state budget to media, either for assistance to media or as money spent on advertising. That amounts to about a quarter of the value of Serbia’s entire advertising market. A good portion of this goes not for advertising in the public interest but for promotion of the work of particular ministries and ministers — the commission gives the example of the “Očistimo Srbiju” campaign, organised by the ministry of the environment, which functioned as a promotion vehicle for environment minister Oliver Dulić.

Looking at money that is not spent on advertising, it seems that a good portion of this is support for media to research various social problems, most of which already have state institutions and budgets already dedicated to research. The result is that again the projects look like political promotion. And the money that is spent on advertising? That largely goes through the Agency for Relations with Media, which reserves publicity space en bloc in advance at a reduced fee, then pays the media outlets in pieces as it uses the space. Or does not pay them if it does not use it. When the space is used the material appears to be channelled through a small number of politically connected advertising agencies, of which one of the largest (but not the only one) is McCann/Erickson, which is owned by president Tadić’s adviser Srđan Šaper.

State institutions as party vehicles: Parties name their candidates to the boards of directors of state-owned media, who then decide as to the awarding of production contracts for material to be broadcast by these media. Although the commission was not provided with all of the information they requested, they have indications that these contracts seem to be driected to firms connected to political parties, or in some instances to members of the board itself. Here it seems that the line traced from the production houses that have the greatest success in obtaining contracts often seems to involve somewhere the mayor of Belgrade, Dragan Đilas.

So that is the commission’s account of the situation — disguised ownership and close relations with politicians and tycoons.  You would think that the report would cause a bit of a fuss, but since it was filed on 19 September today’s broadcast is the first that I heard about it. No doubt if the members of the commission got something terribly wrong, that will be covered.

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