Come this Thursday, November 19th, a monumental change is due to take place in Hungary – with the two most popular radio networks to be replaced by upstarts tied to the country’s two main political parties. That is, unless the courts intervene and block the confiscation of the value built up by US-based Emmis Communications and German/Austrian Accession Mezzanine.
Slager Radio has been a big success for majority owner Emmis for the past 12 years, but there were surprising developments this year when the two national licenses came up for rebidding. RBR-TVBR has been told that shortly before the bidding process began, Slager was approached by one of Hungary’s two largest political parties with a demand that it receive a controlling stake – essentially for nothing. Slager and Emmis refused, saying that would violate both US law and Hungarian law. The other party made a similar demand of Danubius Radio (backed by Accession Mezzanine), which also refused.
When the bids were submitted to the ORTT, Hungary’s version of the FCC, Slager and Danubius each proposed to pay approximately 15% of their revenues as a license fee. The challengers, each tied to one of the political parties, bid 50%. The higher bids won.
Obviously, paying 50% of revenues to the government is not a viable business plan and also would leave nothing to be paid to the political parties. But, with the two big political parties colluding to protect their partners, what is the chance that the ORTT would ever revoke their licenses for non-compliance? None.
The bidding process was such an obvious fraud that the head of the ORTT resigned in protest. Politicians from minor parties have called for an investigation. US Vice President Joe Biden has gotten personally involved, but got nowhere in trying to persuade the Hungarian government to abide by its own laws. Former FCC Chairman Bill Kennard has been asked to intervene at the European Union (EU), of which Hungary is a member, and where Kennard is now the US representative with the rank of Ambassador.
Slager filed legal action seeking an injunction to block the change of licensee. Since this is entirely new legal ground, it is unknown at this point whether any court hearing will take place before the 19th.
As it stands today, the two political parties involved in the radio takeover are ignoring critics and the new licensees are preparing to go on the air later this week.
RBR-TVBR observation: All this sounds a lot like the return to Stalinist thuggery that we’ve seen in Russia under Vladimir Putin. But while Hungary was once part of the Soviet empire, it is now a member of the EU and is supposed to follow the rule of law.
