A Hungarian entrepreneur critical of Viktor Orban is acquiring a minority stake in the Polish publisher of influential newspaper Rzeczpospolita weeks ahead of a tightly contested national election.
(Bloomberg) — A Hungarian entrepreneur critical of Viktor Orban is acquiring a minority stake in the Polish publisher of influential newspaper Rzeczpospolita weeks ahead of a tightly contested national election.
Zoltan Varga, who owns one of Hungary’s largest independent media groups, is buying a 13.43% stake in Gremi Media SA from Amsterdam-based Pluralis BV. The stake carries voting rights of more than 20%. Pluralis, which invests in media companies with the backing of pro-democracy funds, will remain the group’s largest shareholder.
The deal will help shore up Rzeczpospolita, a Polish daily covering business and politics that’s gained a reputation for remaining above the fray in the country’s polarized political landscape. The newspaper has struggled with declining advertising revenue from state-owned companies as the ruling Law & Justice party seeks to tighten its grip over independent media.
Poland’s parliamentary election on Oct. 15 is gearing up to be a test for Law & Justice, which leads in polls but may fall short of a majority as the party seeks an unprecedented third term in power.
The size of the investment was not disclosed, but Bloomberg calculations based on previous transactions estimate it at around €8 million ($8.6 million).
Varga is no stranger to operating in a hostile media environment. His Central Media Group, which he founded and has led since 2014, is one of the few independent media outlets remaining in Hungary. It runs more than 25 print and special-edition magazine titles and 19 online publications that together reach more than half of the country’s population of 10 million every month, according to the company.
Varga told Bloomberg in an interview in 2020 that he felt intimidated by the Hungarian government and under pressure to sell his businesses. He said at the time that he wouldn’t be selling — and that holding on to his companies was a matter of principle.
Media Mogul Feels Pressure of Orban’s Squeeze on Democracy
Through this deal, Varga will extend his investments in the so-called Visegrad nations that include Slovakia and the Czech Republic, as well as Poland and Hungary.
“Our mission is to fight fake news, and we are happy to deploy our Hungarian knowledge in the Polish market,” Varga said in a statement to Bloomberg. “We will be an active shareholder in Gremi to provide the necessary financial support and expertise.”
Poland ranked 57th in this year’s world press freedom index, between Kosovo and Burkina Faso, but above Hungary, which came in at 72nd. Poland’s government has adopted some of the tactics and methods used by Orban in order to control and pressure media in Hungary.
Media advocacy groups in Poland have accused the nationalist government in Warsaw of turning state television into a tool of propaganda. In 2020, state-controlled oil refiner Orlen SA bought the largest publisher of regional newspapers in the country and promptly fired most of its editors-in-chief.
State-owned companies have in recent years drastically cut back on advertising in newspapers and magazines critical of the government, choking key sources of media revenue. In 2021, the Polish parliament passed a law that would force Discovery Inc. to sell most of the controlling stake in Poland’s biggest private broadcaster. The regulation was later vetoed by President Andrzej Duda following reported pressure from the US.
Pluralis first invested in Gremi in late 2021, with the option to purchase an additional stake at a later date. The Netherlands-based company is backed by several European media firms, democracy-supporting foundations and impact investors, including King Baudouin Foundation, the Media Development Investment Fund, Mediahuis and the Soros Economic Development Fund. Pluralis exercised the option to increase its stake in Gremi last month.
“Our mission is to defend and strengthen private independent media institutions in Europe and as a strong business is the best guarantor of editorial independence, we welcome Central Group as an aligned partner,” Joanna Rozycka-Iwan, Pluralis’s vice-chair and representative on Gremi’s supervisory board, said in a statement.
Gremi, which also publishes the business title Parkiet, was previously controlled by Warsaw-listed KCI, the investment vehicle of businessman and film producer Grzegorz Hajdarowicz.
–With assistance from Zoltan Simon.
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