January 7, 2016 / 11:30 AM / 2 years ago

After split from ally, Hungary's Orban strives to muster media muscle

The newscast of TV2 is seen on television sreens in an electronic store in Budapest, Hungary, December 18, 2015. REUTERS/Bernadett Szabo

BUDAPEST (Reuters) - As Hungarian Prime Minister Viktor Orban seeks to retain power in 2018, he faces a struggle to muster the broad media support that has underpinned his rule in recent years.

When Orban won a second consecutive term in 2014, with a two-thirds parliamentary majority intact, he owed much of that success to leading TV and radio stations either swinging behind his right-wing Fidesz party or largely refraining from criticism.

As well as state media, he enjoyed the support of several private news outlets - bolstered by his long-time friend and supporter Lajos Simicska, a media tycoon whose empire includes news channel Hir TV, national and local radio stations and advertising companies.

But Orban can no longer bank on this backing.

Relations have soured with Simicska, who publicly turned against the prime minister after the election over changes to Hungary’s advertising tax that hit his sprawling holdings.

“We have lost our media, the right-wing media that helped the supporters of Fidesz,” Orban said last year. “There is a conflict between the government and the owners of the dominant right-wing media. That is the truth.”

And as he looks to extend his premiership once again in 2018, he faces a formidable task to regain the level of influence over the media offered by Simicska.

Three of the premier’s close allies are leading efforts to do so, according to several media sources. They are former Hollywood producer Andrew G. Vajna, now the government’s film commissioner, Orban’s head of communications Antal Rogan, and Arpad Habony, the premier’s long-time adviser, the sources said.

Vajna, Habony and Rogan did not respond to requests for comment.

Orban’s spokesman said the prime minister had nothing to add to his comments last year, when he called for “right-wing civilians” to create supportive media outlets.

BATTLE FOR TV2

A crucial battleground is TV2 Group. It includes TV2 - the country’s second-largest privately-owned television station after German-owned RTL RRTL.DE - as well as three other smaller cable channels, representing a big slice of the Hungarian media market.

Simicska has never owned the company, but a close business partner of his had a contract that gave him the option to buy it at any time he chose - in practice giving the tycoon significant influence over decisions at the group.

Vajna bought TV2 in October from two executives of the group, only for the agreement to be contested immediately by Simicska’s partner, who said he had exercised his option to buy the company two days before the deal was announced.

The resulting legal battle has yet to yield a clear outcome. But industry players say loss-making and debt-laden TV2 badly needs extra revenue from state advertising and also the long-anticipated introduction of a cable distribution fee - both of which they say are more likely if Vajna owns the firm and not a competitor.

“Acquiring TV2 now is hardly good business without the proper government connections,” an executive at a leading TV station said on condition of anonymity.

TV2 and its senior executives declined to comment.

Hungary’s government denies exerting pressure on the media and says it meets EU standards on media freedom.

Vajna, who made his name producing movie franchises like Terminator and Rambo and now owns four of five Hungarian casino concessions, told the daily Nepszabadsag this week that TV2 was one of several media projects he was involved with, and denied he was doing Orban’s bidding.

“Of course I mentioned this undertaking to him but it would be a stretch to say we discussed it,” the 71-year-old said.

Vajna has also said he would put up the investment needed to make TV2 successful and profitable, without giving details.

NEW MEDIA GROUP

Meanwhile 48-year-old Habony - who has helped orchestrate several Fidesz election victories as an unofficial spin doctor for Orban - has launched a new media company, Modern Media Group (MMG).

The group has denied it will be a mouthpiece for Orban, but its launch last year came shortly before the premier publicly appealed to his supporters to create new outlets through which the government can get its message across.

MMG so far consists of two news websites, 888.hu and Lokal.hu, which often carry state advertising, and a free weekly magazine that prints 500,000 copies in Budapest.

The group’s CEO is Peter Keresztesi, also communications chief at the government-affiliated think-tank Szazadveg. He said the owners had seen a gap in the media market - he did not elaborate on that, and declined to discuss the group’s plans.

Asked whether MMG would support the government, he said: “The company is organized on a market basis. Any subject that goes down well with media consumers could be interesting.”

Rogan’s role in the trio’s media drive is on the advertising side, according to the industry sources.

As part of his job as the government’s communications chief, he oversees a 25 billion forint ($85.5 million) advertising budget - making him the biggest player in Hungary’s 189 billion forint advertising market.

The executive at a leading TV station said the large state advertising budget served as a big attraction for investors in the media industry.

“But it takes knowing when to shut up, and 25 billion will influence that too. If you shut up you can proceed to the cash desk,” said the executive, adding: “There is no independent media in Hungary.”

While Habony, Vajna and Rogan are pursuing separate paths, industry sources say they have worked have closely together for years and are now co-ordinating their efforts. The three are friends and are often seen and photographed together.

“That these three people move in concert is beyond doubt,” said Gabor Polyak, a media analyst at think-tank Mertek. “Rogan doles out the money, while Habony and Vajna build a media network, using their connections and capital.”

Rogan and government spokesmen did not respond to repeated requests for comment about the allocation of the state advertising budget.

Editing by Pravin Char

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