Backroom Business Deals
In a comprehensive statement yesterday,[1] the WAZ media group admitted to having engaged in dubious business deals. According to the statement, an unnamed "contractual partner" - Bodo Hombach referred to him as a "Serbian oligarch" - committed himself in December 2008 to sell 3 businesses to WAZ: "Ardos" (Austria), "Trimax" (Austria) and "Karamat" (Cyprus). These three companies together possess two-thirds of the Novosti AD shares, the publisher that puts out the Serbian Vecernje Novosti (Evening News). A few years ago, when Novosti AD was privatized and antitrust restrictions prevented WAZ from taking it over - WAZ already owned 50 percent of Politika, the second most significant opinion making journal in the country - the "oligarch" bought the shares, thereby prohibiting another Serbian investor from buying the publishing house. When the deal became public it caused serious anger in Belgrade. The WAZ cannot be permitted to acquire a "trademark" like Vecernje Novosti with "backroom business deals", declared Serbia's Minister of the Economy, Mladan Dinkic.[2]
Austria, Hungary
The WAZ, which has recently raised so much ire with its intrigues in the Serbian capital, has for years been the mightiest foreign company on the press market in Southeast Europe. Already at the end of the 1980s, the "WAZ media group" began exploring possible expansion into eastern and southeastern Europe. In 1987 the Essen-based company bought into two important publishers in Austria. It acquired 50 percent of the Kronen Zeitung, which has a unique standing in the country's media landscape with its 3 million readers in a country with a total population of 8.4 million, and 49.4 percent of the Vienna-based daily, Kurier newspaper (distribution: 200,000). "With this we opened the door to Southeast Europe," said the WAZ employee, charged with relations to Southeast Europe, Andreas Ferling in 2007.[3] With the take over of the Hungarian publishing group, Pannon Lapok Tarsasaga, in 1990, the German company was able to accomplish its first penetration onto the market of a previously socialist country in the immediate aftermath of the radical transformation. The five regional journals of Pannon Lapok Tarsasaga were sold, according to the WAZ, "in four counties stretching from the Austrian border to the gates of Budapest" [4] - total distribution 225,000.
Big Headlines, Scant Language
The first serious resentment over the WAZ's southeastward expansion arose in Bulgaria, where the company was engaged in 1996. Following the takeover of the second largest daily newspaper of the country (24 Tschassa), WAZ bought also the largest (Dneven Trud). The WAZ was not only accused of having used dumping methods to obtain a monopoly position.[5] The company, which had won an antitrust lawsuit brought against it in Sofia, holds today a market share of around 70 percent. In January 2007, the former WAZ employee Ferling explained that "one of our strategies is to go into countries where antitrust laws are not very developed" - and try buying the shares of the market before the antitrust laws become more restrictive.[6] Criticism about the qualitative development of the newspapers taken over by the WAZ can still be heard today. "The potential" for bringing "higher standards" to Bulgarian readers at the time, was "not used" by the WAZ, says a media specialist in Sofia. On the contrary, complains a journalist, "they introduced a new graphic design: big headlines, scant language, large front page photos."[7]
Exclusive Contacts
After the WAZ group had already acquired access to the Croatian (December 1998), Rumanian (March 2001) and Serbian (October 2001 [8]) markets, the media group took on a new manager, Bodo Hombach (SPD), in February 2002, who had exceptional contacts to Southeast Europe. Hombach had been head of the Federal Chancellery (1998 to 2001) during the preparations for the war over Kosovo and NATO's bombing of Yugoslavia and subsequently (from mid 1999) he became the EU's Special Coordinator for its so called "Stability Pact for South Eastern Europe". The "Stability Pact," designed to stimulate cooperation and economic reconstruction in southeastern Europe, gave the EU's Special Coordinator the possibility to develop direct contacts to leading personalities in business and politics throughout southeastern Europe. Already with his activities in Germany, Hombach had occasionally provoked much anger. A regional politician in North-Rhine Westphalia, where Hombach was active until the fall of 1998, was quoted as having said that, with Hombach's departure to the Federal Chancellery "the amount of intrigues in North-Rhine Westphalia" has "significantly decreased."[9] Hombach's activities in southeastern Europe for the WAZ group have also not been without conflicts.
Positive Reporting
In the second half of 2004, a dispute with the editorial staff of the Rumanian daily România Liberă over WAZ directives made the headlines, but has been given various public interpretations. The WAZ group owned 70 percent of the România Liberă shares. This conservative daily's editorial staff complained that the WAZ was trying to prevent critical reporting on Rumania's social democratic government, making reference to Hombach's SPD past and the close ties between the German and Rumanian social democrats. But the WAZ countered that it was insisting merely on standards of quality and "positive reporting."[10] This dispute over the German media group's interference in editorial policies attracted European public attention for several weeks. This would hardly be the case today. "Previously, the WAZ gave itself an image of pursuing purely commercial interests and maintaining strict political neutrality," stated a knowledgeable observer in the spring of 2006, "but now the WAZ-owned Balkan newspapers have become liberal, pro-western," thereby "the company is assuming it's growing political role in the Balkans."[11] This no longer attracts attention.
From Foreign Minister to Newspaper Man
The media group's activities in Macedonia are a good example of the close ties between the WAZ and the political elite in Southeast European countries. In Mai 2003, the WAZ bought the country's three daily newspapers with the largest distribution (Dnevnik, Utrinski Vestnik, Vest). Soon thereafter, the WAZ consolidated its activities in the company Media Print Macedonia (MPM) - insisting "with the Cartel Office's permission."[12] This must be underlined, because with the three newspapers, MPM not only centralizes the complete value added chain from printing to distribution, it even controls more than 70 percent of Macedonia's print market.[13] The excellent relations with the political establishment are of great benefit to the company's activities in Macedonia. When the WAZ made its entry in Skopje, it employed Srgjan Kerim as MPM manager. Kerim knows Germany, because he also served as his country's ambassador to the Federal Republic of Germany (1994 to 2000), then in 2000 briefly as "Special Envoy for Regional Questions" of the Stability Pact for South-Eastern Europe under the Coordinator Bodo Hombach and as Macedonian Ambassador (2000 to 2001) before becoming President of the Macedonian-German Association of Commerce - and beginning work for the WAZ.
Impoverish
The Essen-based WAZ media group considers that "no other western European publishing house is more present in Southeast Europe than the WAZ."[14] Given the fact that this German company has 40 percent of its sales and 70 percent of its revenue abroad, critics in Southeast Europe come to a different conclusion. One being Manojlo Vukotić, editor in chief of the fiercely contested daily, Večernje Novosti, who recently explained in reference to the WAZ group's back room business deals with dubious oligarchs: "they set out to conquer the media scene of the impoverished Balkans and they are succeeding in impoverishing the Balkans even more."[15]
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