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25/09/2016

Serbia’s media privatisation leaves bitter aftertaste

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Serbia’s media privatisation leaves bitter aftertaste

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The privatisation of media in Serbia has left the sector looking bleak. Many media providers have been shut down, more than 1,000 journalists and other media professionals have lost their jobs, and the survival of many in the privatised media is uncertain. EurActiv Serbia reports.

The reforms in the media sector were long awaited after the democratic change of October 2000. They began, with much difficulty, no sooner than in 2011 with the adoption of the Public Information System Development Strategy by 2016, the so-called ‘Media Strategy’.

The scheme envisaged the withdrawal of the state from the media, except in very limited and special cases, as well as a transfer to project co-financing from public funds. A set of media laws regulating the privatisation process, among other things, was enacted three years later, in August 2014.

Consequently, the media privatisation process in Serbia was launched in autumn 2014 and wrapped up in October 2015, after a three-month extension of the deadline.

The process included media that had been owned by the state, in various forms. They had mostly been created and financed more or less according to the system inherited from the period of Communist Yugoslavia, i.e. largely from state and local public funds.

On several occasions, the European Commission urged Serbia to consistently implement the Public Information Act and Media Strategy “properly and swiftly, in order to ensure the easiest possible withdrawal of the state from media ownership and a fair, transparent and permanent privatisation process”.

Public calls

Of the 73 media outlets that were up for privatisation, public calls for sale were made for 50, while 34 were privatised. In the meantime, one privatisation has been annulled, but there is still no reply from the Ministry of Economy as to whether a new privatisation procedure will be launched.

The process saw 20 media shut down, officially including state-owned news agency Tanjug, which however continued to operate in the grey zone by using state resources – office and equipment, with unclear financing procedures.

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Two media providers have changed their field of operation in the privatisation process, even though the new owners are legally obligated to keep up the current operation for the following five years, while 16 have been given the option of privatisation through the transfer of capital without any payment to the employees, which was the last resort for the survival of the media.

That procedure did not turn out to be successful either and the country’s two largest journalists’ associations, the Journalists’ Association of Serbia (JAS) and the Independent Journalists’ Association of Serbia (IJAS), hold the former Privatisation Agency and the Ministry of Justice accountable for that.

According to estimates by the two associations, both members of the International Federation of Journalists, during privatisation, some 1,000 journalists left their jobs with severance pay, whereas the number of journalists left jobless has in the meantime gone up to 1,100.

“People are still leaving, because the owners, despite the number of media employees having been halved, are not ensuring the media’s sustainability,” JAS Secretary General Nino Brajović told EurActiv.rs.

Survival of privatised media uncertain

Now, more than ten months after privatisation, the question is raised as to whether the new owners respect their obligations and whether some of the privatised media will even survive. The privatisation agreement binds the buyer to pay out salaries to employees for at least two years, invest in the purchased medium’s fixed assets and to operate in the information field for at least five years.

The IJAS has announced it is putting together a report on the state of the privatised media, i.e. the implementation of sale and purchase agreements and that the initial results are not at all encouraging.

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IJAS President Vukasin Obradović said that the sale and purchase agreements were mostly breached in the payment of employees’ salaries, i.e. that they were paid out irregularly and in a minimum amount.

Nino Brajović of JAS adds that the salaries, besides being minimal, are several months late, but that the employees have not complained to the Ministry of Economy about that.

Obradović also said that the IJAS had asked the Regulatory Authority for Electronic Media (REM) and the Ministry of Economy to control the privatised media as soon as possible and inform the public of the results.

“Only then will we have the full picture, which, I can already say, is devastating, with a few honourable exceptions,” he said.

Brajović went on to say that it should be pointed out that “the best local media, such as several local televisions, have weathered the bad privatisation”.

“One could not have expected them all to survive. The problem is that not even the best ones will make it unless the municipal and city governments earmark two percent for the project financing of media,” he added.

Local Rupert Murdoch?

In late August, JAS and the IJAS raised the issue of Radoica Milosavljević’s failure to respect obligations to the media he had purchased. The Kruševac-based businessman has been dubbed the local Rupert Murdoch, because of his purchase of eight media in the privatisation process.

According to JAS data, of the eight media bought by Milosavljević, two are not broadcasting any programs despite not having been shut down, one local TV station has announced a suspension of programming, while the survival of Radio Television Kragujevac, a regional TV station in central Serbia, has been brought into question due to debt and overdue salaries.

Under pressure from the employees and unions, Milosavljević offered the RTK employees, whom he owes 4.5 salaries, a severance package for voluntary departure, which was chosen by 45 of the 67 employees. Milosavljević said that the question of whether RTK could survive and keep operating with a smaller staff was open.

Trading influence

Brajović and Obradović agree that property was not the dominant reason for the purchase of media, but rather a trade of influence.

“The state-owned media were actually party-owned. But because of financial exhaustion and non-transparent ownership, private media are becoming party-oriented, too. The media are being left without money and people. That is the main characteristic of this privatisation,” said Brajović.

“I think the dominant motive (of the purchase of media) was political, i.e. control of media and influence. There were also cases where the main interest was ownership of property, but that is a negligible percentage,” said Obradović.

He further said that based on direct insight into the editorial policy of the biggest media buyers, such as Milosavljević, one could clearly see that the editorial policy was “in some cases even distastefully in favour of the Serbian Progressive Party”.

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During the privatisation process, the public speculated whether Milosavljević, as a man close to the ruling parties, was creating a local media network that would be close to the authorities, but he claimed he was doing that out of business interest.

Milosavljević is a member of the Socialist Party of Serbia, which is part of the ruling coalition with Prime Minister Aleksandar Vučić’s Serbian Progressive Party. Milosavljević is seen as a man close to Bratislav Gašić, a Progressive Party official from Kruševac, and Vučić’s close aide.

Another case that attracted public attention during the privatisation process was that of Radio Šid, which was sold to cable operator Kopernikus, connected to the ruling Progressive Party.

Obradović also mentioned Studio B, Belgrade’s once popular city television purchased by Maxim Media, owned by the Krdžić family, and the media owned by businessman Vidosav Radomirović in the territory of Niš, the biggest city in southern Serbia, as examples of biased reporting.

He added that the media buyers quickly saw the funds they had invested return through competitions carried out by local self-governments, giving the example of the aforementioned “local Rupert Murdoch”, Milosavljević, who received at least 390,000 from local budgets.

Problems with project financing

Obradović said that project financing had in practice turned into its opposite. “Instead of improving the informing of citizens, in numerous cases, the competitions served as a way to give money to the ‘appropriate’ media,” he added.

Brajović pointed out that “media depletion and mortality are inevitable” in circumstances in which local self-governments bore no legal consequences if they did not organise competitions or if they earmarked symbolic funds for the project co-financing of media.

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“JAS timely pointed out that danger, which is why it did not support the set of media laws (passed in August 2014),” he added. At the time of the law’s adoption two years ago, JAS asked that local self-governments pledge to earmark 2% of budget funds for the media, which was not accepted.

He went on to say that this had to be changed by a new media strategy and that the regulation on state aid control, which limits financial support to media from all levels of government to around €187,000 for three years, had to be amended.

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Tanjug as a privatisation phenomenon

The journalists’ associations disagree on the status and future of the Tanjug news agency, which was annulled as a public enterprise by a decision of the government on 31 October 2015 but continues to operate.

Obradović said that Tanjug’s case was the most scandalous example of media privatisation, that it was an “open violation of the law and unprecedented political voluntarism, and there is no indication that anything will change in that case”.

“All that is happening with Tanjug is, in fact, an indicator that this government has no intention of regulating the media scene in line with the laws it has enacted itself. Obviously, the media reform has boiled down to repackaging political influence in the media and open pressure on journalists,” he told EurActiv.rs.

Brajović said that Tanjug was “a phenomenon of this privatisation”, but that it had survived despite the government’s decision on annulment because two important conditions had been met.

“First, that the government is interested in its survival rather than its closing, and the second that due to the reduction of the workforce it has become competitive. That is why Tanjug shouldn’t be shut down. The employees of this agency should also be entitled to free shares, which contrary to the law they were not offered,” he added.

In early September, the Minister of Culture and Information said that talks had been held with EU representatives on the topic of Tanjug.

Vukosavljević said that Serbia had to find its own solution to the agency issue, given that there was no single solution in the EU for the operation of news agencies. Tanjug, despite having officially ceased operation, continues to publish news.

Background

The influence of politics on the media has been an unavoidable subject in Serbia for years, regardless of which party is in power or how that influence is being exerted. The privatisation process, however, has paved the way for direct influence through the purchase of media.

The privatisation that ended some 10 months ago included many local media, as well as many leading media with a long tradition, such as the once state agency of the former Yugoslavia, Tanjug, International Radio Serbia or Dnevnik, the leading daily in Serbian in Vojvodina, Serbia’s northern province.

International Radio Serbia, formerly Radio Yugoslavia, one of the oldest shortwave radio stations in the world, founded in 1936 – six years before the Voice of America, was closed in July 2015. The station had broadcast its program on a shortwave frequency in 12 languages.

The Dnevnik daily which has been in circulation for 70 years has failed to find a buyer. It has been going through bankruptcy proceedings for months now, and according to the reorganization plan the debts are to be settled through the sale of the printing shop in Novi Sad, whose worth is estimated at around four million euros. Local media report that the future buyer will be able to erect a 10-story building in place of the printing shop.