Hungary handover

SBS, CLT-Ufa win TV bids; CME loses

Two long-awaited private broadcast licenses in Hungary have finally been awarded.

The winner of the coveted first channel license is a consortium led by feisty satcaster Scandinavian Broadcasting System (SBS), which beat out its main Euro rival, Central European Media Enterprises (CME). SBS’ partners are the Hungarian production company MTM and the German producer-distribbery TeleMunchen.

A consortium led by the powerful combo of Luxembourg-based CLT and Germany’s Bertelsmann subsidiary Ufa picked off the second license, which does not yet cover as much of the country as the first. Its local partner is the Magyar telco Matav; other backers include British media conglom Pearson. There are strong economic and trade ties between Germany and Hungary.

CME, which is backed by cosmetics-turned-media kingpin Ronald Lauder and operates other stations in the Czech Republic, Poland and Romania, also made a failed bid for the second license. It too had local partners in its bid.

The announcement was made Monday by Hungary’s national radio and television board (ORTT), and brings to an end seven years of political in-fighting that has left Hungary’s media privatization trailing behind other former communist countries. Both Poland and the Czech Republic already have commercial national TV stations.

ORTT spokesman Gyorgy Lovas said Monday in Budapest: “The decision was unanimous but for one abstention,” adding that the bids had been “very close.”

The 10-year licenses for two national commercial TV channels were offered for 8 billion forints, ($42 million) plus taxes and were payable three years in advance.

SBS chairman-CEO Harry Sloan said in a statement Monday: “The award of the first private license in Hungary is an important accomplishment for SBS and marks a milestone in our expansion from western to central Europe.

“We already have in place the management, financial and programming resources to support our consortium’s efforts, and currently have no plans to access the capital markets,” Sloan added. (SBS, which went public four years ago, has a major shareholder in Disney/ABC.)

The ORTT decision to bypass CME, once considered a favorite to win a license, shocked the local investment community. Sources say CME recently fell into disfavor with the media and political leadership in Budapest.

Insiders suggested that CME’s frontman in Hungary, famed local broadcaster Gyorgy Balo, was overly assertive in his dealings with ORTT and the government. “I think Balo overplayed his cards,” a well-placed source told Daily Variety.

Other analysts argue that CME’s presence in other markets in central Europe was the chief reason for its failure.

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