Hungary’s Orban Now Controls a Media Juggernaut

(Bloomberg) -- Hungarian Prime Minister Viktor Orban has created a media juggernaut under his political control, putting him at the forefront of a push by illiberal regimes in eastern Europe to extend their influence over the press.

Ten companies owned by Orban’s business and political allies announced this week they’d “donated” their outlets -- including news channels, radio stations, a tabloid, newspapers and a political weekly -- to a non-profit organization led by a pro-government editor.

The unorthodox alliance underscores a wider trend of nationalist governments clamping down on media pluralism in the European Union and coincides with officials in Poland clashing with the U.S. ambassador in Warsaw over criticism that they’re putting political pressure on private broadcaster. Orban has been at the forefront, harnessing a powerful propaganda machine to help him win a third consecutive election earlier this year.

“There’s an incredible centralization when it comes to the media,” Agnes Urban, a Budapest-based analyst at Mertek, which analyzes media trends in Hungary. “April’s election, when Orban ran an anti-migrant campaign without having a significant number of migrants here, showed that with propaganda you can achieve anything.”

‘Clear Risk’

Both Poland and Hungary are facing the threat of EU sanctions for posing a “clear risk” to the rule of law and other basic values, such as respect for media freedom.

Hungary tumbled to 73rd place in the 2018 ranking of press freedom by Reporters Without Borders. That was from 23rd in 2010, when Orban returned to power and built what he’s called an “illiberal state” modeled on nations such as Russia and Turkey. Poland, where Law and Justice came to power in 2015 pledging to turn “Warsaw into Budapest,” slid to 58th in the rankings, from 18th just three years ago.

While Poland is contemplating a push to boost national ownership in the media industry, Hungary is further along, with Orban now streamlining a vast pro-government media empire after his allies snapped up assets over the past eight years. Mertek’s Urban said the transaction would help streamline management and cut costs at what’s by now the biggest media empire in Hungary. It’s not clear how profits will be distributed.

The list of those donating outlets to the non-profit foundation is a who’s who of allies and oligarchs close to Orban. They include Lorinc Meszaros, Orban’s friend and the former mayor of his hometown who’s become one of the richest men in Hungary with the help of public contracts; Adam Matolcsy, the son of National Bank of Hungary Governor Gyorgy Matolcsy; and Arpad Habony, who’s long been an informal and influential strategist for Orban.

Other Countries

It follows years of Orban channeling state advertisements to pro-government media and away from critical outlets, often helping push the latter into precarious financial positions that made them targets for acquisitions by his allies. The assets were then typically turned into government mouthpieces or shut down, such as with Nepszabadsag, the most widely read opposition newspaper, which Meszaros closed down in 2016.

Other governments are also facing accusations of influencing the media. In the Czech Republic, the biggest broadsheet is part of billionaire Prime Minister Andrej Babis’s business empire. He came under fire last year from reports that he’d allegedly discussed the timing of the publication of stories potentially damaging to his rivals with journalists from one of his newspapers. Babis has repeatedly rejected accusations of interfering with media and has placed the holdings in trusts to comply with conflict-of-interest laws.

Poland, meanwhile, renewed its call for a “re-Polonization” of media, with Senate Speaker Stanislaw Karczewski telling the Rzeczpospolita daily that foreign ownership “isn’t healthy.”

Earlier this week ruling party officials criticized the U.S. ambassador to Warsaw, Georgette Mosbacher, over her support for Discovery Inc.’s TVN SA channel. The network accused the government of intimidating its journalists after security agents entered one of their homes. The envoy, in a letter leaked to pro-government media, called on Prime Minister Mateusz Morawiecki’s cabinet to stop attacking independent media.

“I hope that members of your government will refrain from attacking, let alone prosecuting, independent journalists who articulate public interests and strengthen our societies,” Mosbacher wrote.

--With assistance from Wojciech Moskwa.

To contact the reporters on this story: Zoltan Simon in Budapest at zsimon@bloomberg.net;Marek Strzelecki in Warsaw at mstrzelecki1@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net, Michael Winfrey, Andras Gergely

©2018 Bloomberg L.P.