BUDAPEST — Just when U.S. and west European media investors believed Hungarian TV privatization to be a done deal, the National Radio and Television Board (ORTT) has delayed the bidding process and shaken confidence in the Magyar broadcast market.
Last week, the ORTT, Hungary’s broadcast regulatory commission, which is currently overseeing the sale of two state-owned channels, announced that the bidding process for two national TV frequencies up for grabs would be divided into two separate rounds. Given that bids had already been submitted by three international media consortiums — including a group headed up by U.S. cosmetic entrepreneur Ronald Lauder and Hollywood producer Andrew Vajna — the board’s decision to change the rules of the game in the fourth quarter has whipped up anger in the broadcast industry.
“In a normal society, it is a strange move — to put it mildly — that the issue of a tender changes its mind during the process,” said Miklos Hegedus, managing director of the Budapest-based Economic Research Institute.
Niceties aside, the ORTT’s decision calls into question the integrity of Hungary’s privatization process — impartiality being something investors have been wary of from the beginning. “We hope that the bids will stand on their own,” said a spokesperson for Central European Media Enterprises (CME), the regional media investment company chaired by Lauder that submitted bids for both frequencies under the corporate banner MKTV.
Process in question
But there is more at stake than bad impressions. Late last week, the ORTT threatened to stop privatization altogether. The board announced that the money allocated it by parliament is insufficient to complete privatization of the two state frequencies slated for sale, and to ready Hungary’s media sector for the advent of commercial television.
“This qualifies as political blackmail,” said Gyula Gaal, deputy chairman of the parliamentary budget committee. “It is an appalling statement.The board was to announce the winning bids June 10, making it possible for private stations to be up and running by Sept. 1. The board has now rescheduled the date for announcing the winners to June 26, making it more difficult for the successful bidders to meet the September deadline.