$50 mil sates Hungary TV

BUDAPEST – Despite press hysteria that precious pieces of Hungary’s soon-to-be-privatized TV industry would sell for as much as $150 million, the government has announced that 10-year concessions for the two national frequencies up for grabs will go for a cool $50 million.

The announcement, which appeared in draft tender documents published in a newsletter by the Hungarian Minister of Culture and Education, comes as welcome news to U.S. media investors with an eye on Hungary.

Among those are cosmetics magnate Ronald Lauder, chairman of Central European Media Enterprises (CME), a TV development company that has announced plans to launch a private TV station in the nascent Hungary market. (CME currently owns broadcast interests in the Czech Republic, Slovenia, Slovakia, and Poland.)

According to the draft tender document, foreign investors in Hungary will have to establish a local TV company that is 26% Hungarian owned; 35% of the station’s programming must be domestically made (not including movies, advertising, and sports); 50% of the programming must be European-made; and 25% of the lineup must be devoted to public service programming, including 25 minutes during primetime (at least 20 minutes of which must be news.)

Other stipulations: advertising cannot exceed 15% of the program schedule, and no more than 12 minutes of advertising can run per hour. In addition to ending months of speculation concerning the price of a station’s concession fee, the government’s sneak preview promised quick action to expedite the birth of the commercial TV industry in the moribund Hungarian TV market.

According to the ministry newsletter, the official tender, which will make way for bidding on Hungarian state TV’s Channel 2 (one of two public television stations in this market) and the former Russian-language frequency known as Channel 58, is scheduled to be released Dec. 23.

For many foreign investors with an eye on Hungary, this announcement heralded the beginning of the end of a six-year wait for TV privatization in Hungary. But more waiting may be in store: Analysts caution the government will have to end its political meddling within the broadcast sector if privatization is to progress.

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