Dirty deals in Czech media?

06.12.2011

A few scattered events that occurred in late November cast some light on the doings of Czech media. Unfortunately, the whole picture and all its implications are still far from sight.

On Nov.21 the specialized weekly Marketing & Media brought two pieces of news with relatively little in common. First, front page news – the publishing house Empresa Media, owned by the Czech entrepreneur Jaromír Soukup is buying the economic weekly Profit starting on Dec. 1. Profit has a 228 sold copy turnover and roughly 10,000 subscribers, according to audited figures. It was published by Stanford, a publishing house owned by KKCG, a gas & finance group belonging to Karel Komárek, the fourth-richest Czech.

What would be a normal transaction on a free market gains in implications because Soukup already owns Médea Group, the largest Czech media agency. On top of Profit, Empresa bought in October the news weeklies Týden, Instinkt and Mladý svět and their online versions. Competitive agencies consider the purchase of media titles by a media agency a conflict of interests. Yet, business goes on as usual.

Autumn cleaning  

The second piece of news from the troubled waters of the Czech media came on page eight of the same weekly. It reported the sale of Euronews, the publishing house of Euro, the third-largest economic weekly by the number of readers in Q2-Q3 2011 according to Media Projekt, a Czech media market research. Euronews was owned by the PPF Group, which sold a 100% stake to entrepreneur Milan Procházka, who is also a co-owner of the investment bank Wood & Company, the second-largest Czech brokerage.

Since June 2010 Euro went through a series of changes – a new managerial team, a new layout and decreasing readership. Moreover, the new editor-in-chief appointed in summer 2010 is Pavel Páral, former director of Stanford. Páral ran Profit’s publishing house from spring 2007 till the end of 2008 when Stanford’s management team was dismantled on account of poor economic results.

The best for last

The final piece of news came from the publishing house Economia. Its flagship, the economic daily Hospodářské noviny (HN), managed to embarrass itself by publishing a column of an external writer, Jakub Horák. The column vividly criticized the new social initiative ANO 2011 of Czech entrepreneur Andrej Babiš. Only that Horák is not a reporter, nor a political commentator. He is the co-owner of TBWA, the third-largest Czech advertising agency.

After the column was issued, Babiš published on his website a letter dated ten days before that he had received from Horák, in which the entrepreneur was offering him his services. “If you want us to work together – and I do want to – let’s meet. I can do really a lot for you and I enjoy your initiative,” Horák claimed. When the entrepreneur rejected his offer, Horák used HN to run his critical column.

Moreover, the weekly Týden noted that Horák managed the HN advertising campaign in 2010. Coincidences? “I stand by my ideas and comments,” Horák answered to the scandal. “Yet, I can also understand that it can look crazy to someone to change my mind so radically in ten days. Certainly it may look like revenge. However, I wrote my column out of sheer idealism; turning the second richest Czech angry certainly cannot have any economic sense,” he said.

Idealism or not, this is the last thing that Czech media can praise themselves for.  

The bigger picture?

After the fall of communism, media markets in Central and Eastern European countries have been taken over by two types of power – foreign media investors, often with their own agenda, and local nouveau riches. In the field of economic media, which if often the best indicator of the health of a media market, Czech Republic leads in the second segment. Economia is owned by Zdeněk Bakala, a lavish entrepreneur with CSR tendencies and interests in coal (New World Resources) and finance.

Euronews was owned by Petr Kellner’s PPF, now it goes to Procházka’s Wood & Company. Profit was owned by Komárek’s KKCG, Týden and Instinkt were owned by another local entrepreneur, Sebastian Pawlowský. Now they go to Soukup. Czech economic media change hands like horses in a medieval fair, and businesses are left with nothing but believing that their reputation is unstained and their information objective.

In reality, when media themselves have a reputation issue, it’s hard to tell people to use them to boost their own reputation. In the Czech Republic there is no legitimate body to supervise the doings on the local media market. There is no professional association to provide education and moral guidance to journalists.

Communication professionals and managers complain louder and louder about the poor quality of local reporting, but there is no one to listen. When companies and individuals cannot trust media outlets, why would they want to be visible in them? Why would they want to provide content and advertize with such outlets, except for having a hidden agenda?

If the media is dying, they have what they deserve. Unfortunately, together with it democracy suffers, and in this bigger picture reputation management is only an insignificant part of the puzzle.