Discovery Vows to Defend Polish Unit as EU Slams Draft Media Law
(Bloomberg) -- Discovery Inc. pledged to defend its Polish unit from a draft law that would force the U.S. company to give up control of the country’s largest private broadcaster and could tighten the government’s grip on the media.
Last week, lawmakers from Poland’s ruling Law & Justice party filed legislation specifying that television and radio license holders can’t be directly or indirectly controlled by entities not in the European Economic Area.
It triggered rebukes from the U.S. government as well as the European Union, while Discovery unit TVN said the move aimed to silence independent journalism. Poland’s ruling party has been accused by critics of a power grab and its government has been repeatedly sued by the EU’s executive for undermining democratic standards.
“We will defend our business against the overreach of regulatory authorities, actions to the detriment of viewers and any uncertainty as to the situation on the market, which could have a negative impact on business in Poland,” Discovery said in a statement on Monday, according to TVN’s news website.
The legislation comes after months of foot-dragging by the regulator over extending the broadcasting license for TVN’s news channel TVN24, which has reported on alleged corruption in the nationalist government. It’s not clear if the draft law is compatible with bilateral treaties, with the U.S. eager to protect its investments.
According to the American Chamber of Commerce in Poland, U.S. companies have invested more than $62 billion in the east European country, second only to Germany, and provide employment for 267,000 people. TVN was worth 6.8 billion zloty ($1.8 billion) when Scripps Networks Interactive Inc. bought it in 2015. Two years later, Discovery acquired Scripps and took control of the Polish broadcaster.
“The new draft Polish law on broadcasting concessions is yet another worrying signal for media freedom and pluralism in the country,” Vera Jourova, European Commission vice president in charge of values, said on Monday. “We follow closely the situation related to TVN24, whose license has not been renewed yet.”
The legislation has shifted public debate away from the issues of nepotism in the ruling party and the return of Donald Tusk, Poland’s highest-ranking EU official ever, to local politics to take on Law & Justice. This has led some opposition politicians to speculate that the draft law will be ultimately dropped or watered down, especially if it risks eroding U.S. support for NATO-ally Poland.
Despite risks to relations with Washington, the ruling camp hasn’t yet scaled down its rhetoric. Lawmaker Marek Suski -- one of the sponsors of the legislation -- made clear the government seeks to influence the content at TVN.
“If this law is successfully passed and some of these shares may also be bought by Polish businessmen, we will have some influence on what is happening on this television,” he told pro-government newspaper Gazeta Polska.
State-run companies, including oil refiner and retailer PKN Orlen SA, have been buying up local newspapers and media outlets and firing journalists critical of the government. Poland has dropped in global press freedom indexes, with advocacy group Reporters Without Borders ranking the country alongside Armenia, Bhutan and Ivory Coast in its latest report.
Asked by daily Rzeczpospolita if state-controlled companies could buy TVN, Suski said: “I can’t rule this out or confirm it. I am not running these companies.”
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