Mihai Coman. Journalism Studies. Volume 11, Issue 4. 2010.
During the period of communism, the communist party in Romania was the sole owner of the press. In order to gain total control over the mass media, the totalitarian party first obtained the “in amonte” power by nationalizing the means of mass communication. Thereafter, the state-party began to use its monopoly over press’ materials and finances. Subsequently, the party controlled all the resources that were important for audiovisual programmes and the production of publications. This ownership guaranteed the “in aval” control, in other words the exercise of censorship (the control of media messages before their distribution). Another characteristic of the communist period was the centralization of resources distribution. A small group of people (the “apparatchiks”) assumed control of different categories of resources and fixed distribution criteria according to its own interest. In this way, the paper quotas, established by the annual plan, limited newspaper and magazine production to the number decided by the Party. Consequently, the possibility of any alternative publication was denied. Following the same pattern, the number of radio and television frequencies and the number of broadcast programme hours were strictly limited. Furthermore, assuming control over the transportation, telecommunication and means of production (paper factories, typography, energy sources, radio and television studios) assured rapid broadcasting of their own mass media products and the elimination of any products considered “unacceptable”.
After the fall of communism, when the euphoric period—related to the discovery of freedom of speech—passed, the economical realities of the press began slowly to emerge. Different social actors, keenly interested in access to power, discovered that press power means the control of resources (legislative, production, information access) and of the “free speech” promoter’s ideology. Achieving all this bestows a real sense of power. At the beginning of the democratic period, this control assumed forms associated with authoritarianism, which quickly gave way to more indirect forms based on hegemonic control. In this context, two convergent processes unravelled: (1) politicians tried to obtain favourable positions through buying media outlets and used them for promoting their political careers (a process known as press “berlusconization”); (2) mass media owners entered into collusive relations with different political groups in order to achieve economical advantages. This collusive system requires social actors with a clear identity (politicians constitute a category that quickly established itself, but media owners were less clearly defined with a far more heterogeneous field of recruitment). That is why this study outlines a new typology for media owners.
Owners as Owners
Post-communism brought the spontaneous privatization of the communist mass media and a rapid creation of new media enterprises. Control over almost all of the former communist print media—including the ownership of publication titles, facilities, equipment and staff—was quickly transferred from the state to private media companies. This included domestic or international business groups, professional journalist associations, individual investors, banks and other entities. New print media enterprises were also created. Small local and regional private radio stations sprouted throughout Romania in the immediate aftermath of communism’s demise, operating illegally because the legal mechanisms for licensing them were not yet established. The state maintained its monopoly in the television field until the late 1990s when private, commercial television was, finally, given legal blessing (Coman, 2003; Gross, 1996).
The Law on Competition (1996) attempted to regulate commercial media and the tendencies toward monopolization, by creating the Council on Competitiveness which was given the remit of authorizing media mergers and acquisitions. Ownership of media outlets is, however, often secret. The pressure exerted by the Council on Competitiveness for full disclosure of ownership brought results; Sorin Ovidiu Vantu, for example, one of the most controversial businessmen in Romania, in February 2006, admitted to being the owner of Realitatea TV, a news TV station that he controlled behind several “front-men”. Phantom companies or organizations in Cyprus or other countries are sometimes set up as media owners. Manuela Preoteasa (2004, p. 405) stated that “as a rule, Romanian legislation forbids anonymous ownership; every [media] company is obliged to register [the name of the owner] in the Trade Register Office and to communicate changes [in ownership]. In practice, few companies meet this obligation because there are no sanctions in force”.
Foreign capital was slow to enter the Romanian media field, especially when compared to Hungary, the Czech Republic and Poland. When it finally arrived, it remained marginal at best, being most visible in the financial and economic press (Ringier), women’s press (Burda, Hachette, Ringier, Axel Springer and Sanoma-Hearst), and the entertainment press (Gruner & Jahr, Playboy and Hustler).
During the period of the euphoric development of the post-communist press, financial independence did not seem to be an important topic for professional and public debate. Nobody considered such issues as financing sources, production costs, tax payment, unverifiable circulation, and an underdeveloped advertising market to be significant in comparison to the spectacular increase in the population’s purchasing enthusiasm. After that initial momentum, when public interest in the press offer diminished, the economic problems became more visible and constituted major topics of public debate. Now, the issue of the freedom of the press becomes framed as the subject of the economic freedom of the press (or, from another point of view, the issue of political influence starts to be treated as the issue of political influence by economical control).
Advertising expenditures rose from $26.6 million in 1993 to $105.4 million in 1996, $287 million in 1999, $1,064 million in 2002, €1,499 million in 2004, to €4,460 million in 2007 (first decade estimates were in US dollars and only later in euros). Television has been the major beneficiary of these advertising expenditures and receives a much greater portion of advertising money than its counterparts in Western European countries. In 1999, television received 61 per cent of the aggregate advertising spend, compared to newspapers which received 23 per cent, radio 5 per cent, movie theatres 1 per cent, and outdoor advertising 10 per cent. These disparities continued to grow. In 2000, television received 73 per cent of total advertising expenditures, daily newspapers only 16 per cent, magazines 8 per cent and radio 3 per cent. From 2004 to the present day, television garnered 87 per cent of advertising expenditures, the print media 11 per cent while radio held steady at 3 per cent (Simion et al., 2007, pp. 21-7).
Across the period media moguls begin to emerge. The most important is Adrian Sârbu, who controls PubliMedia (journals, magazines, press agency), Pro Cinema and, with Central Media Enterprises, Media Pro International (with radio and TV divisions). Sorin Ovidiu Vântu recently created a media empire, which includes radio and TV stations, and a press agency, as well as with journals and magazines. At the same time, Dinu Patriciu (owner of rich Rompetrol group) is beginning to construct a similar trust, including daily newspapers and magazines. Dan Voiculescu, who controls television, radio stations and press publications through the Intact group, is involved in both economic and political life (he is the leader of the Conservative Party and a Member of Parliament). His media group has developed slowly since 1995 (unlike the rapid acquisitions made by Vântu and Dinu Patriciu). Officially, he is not involved in media activities any more, because he has handed over the management of the group to his daughter.
Essentially, the media landscape in Romania is controlled by what the journalist Iulian Comănescu calls the five “Bigs” (Ringier, Voiculescu, Sarbu, Vantu and Patriciu for the printed press; public radio and public television, Sarbu, SBS, Voiculescu and Vantu for audiovisual). Comparing the degree of concentration in 2006 with the situation in 2004, he writes: “The number of national newspapers whose owners are other than the five ‘Bigs’ decreased from 8 to 3. This situation is similar in other markets, such as TV niches or economic publications” (Comanescu, 2007, p. 21). Comanescu exaggerates the idea and extent of concentration, because he ignores the rich local media landscape. This evolution clearly shows not only that we are in the middle of a slow, but irreversible process of consolidation or “trustization”, but also that the major actors on the stage of the press have acquired power and stability. Consequently, they do not depend on the political sector anymore, but negotiate their position from the same level as the political actors. However, such a position of power is not (so) damaging to the freedom of the press, because economic consolidation allows them to be less dependent on political interest (Coman, 2009).
Politicians as Media Owners
By the turn of the new millennium, and following a pattern evidenced in other Eastern European post-communist countries, an increasing number of local political and business leaders entered the press world, joining those who already owned or controlled national and local media. Dumitru Sechelariu, the former mayor of Bacau, who was also a local businessman, purchased the local 12,000-circulation daily Desteptarea and the local Radio Alpha and Alpha TV stations. Other examples abound: in the Oltenia region, the media group Media Sud-Est, led by Constantin Paunescu, owns the 30,000-circulation Gazeta de Sud and the station Radio Sud; in Brasov, the president of the County Council, ex-Democratic Party Senator Aristotel Cancescu, is the owner of the powerful radio and TV network Mix-FM (taken over by SBS Broadcasting Media in 2007); controversial businessman and Constanta Mayor, Radu Mazare, controls the daily Telegraf and Soti-TV; the mayor of the fifth Sector in Bucharest, Marin Vanghelie, purchased the daily Monitorul de Bucuresti in 2002. The mayor of Piatra Neamt, Gheorghe Stefan, is the owner of Radio Unu and Unu TV. Parliamentarians also control media enterprises. Victor Ponta, for example, controls Radio 21, Verestoy Attila, local print media in Harghita, and Gyorgy Frunda, Radio Gaga. In 2004, Liviu Luca, the leader of the syndicates from Petrom who owns Petrom Service, assumed ownership of the dailies Ziua and Gardianul, of Realitatea TV and Radio Total; in 2005, he sold his media holdings to the controversial businessman Sorin Ovidiu Vantu. The phenomenon of politicians owning media outlets raises a key question regarding the independence of the press: What are the prospects of an independent editorial policy when the press is controlled or influenced by individuals with political interests and aspirations? However, the political people who have invested in mass media were not able to receive representative positions (Ghinea and Fotiade, 2006, pp. 53-600; Preoteasa, 2004, pp. 34-51).
Journalists as Media Moguls
“The moguls”, that is, the new owners of the new post-communist media, are only the tip of the iceberg. Behind them are the journalist-managers, courtiers who are reminiscent of the servitude of feudal times, who own shares in media enterprises. Their main objective is to retain their dominant position and to this end they are willing to accept or promote nefarious coalitions with economic pressure groups or with the political establishment. And so it is that, “In all Eastern/Central European countries, the dividing line between the business office and the editorial office frequently became blurred” (Hiebert, 1999, p. 117). These vassals of the owners also attempt to limit the access of other colleagues to decision-making processes by refusing to support any form of institutionalization of the mass media system and by promoting an ideology of “openness”, which sustains the situation that there are no pre-conditions for entering journalism. Ultimately, in a take off from the “capitalism without capitalists—capitalists without capitalism” description of how capitalism was formed from the ruins of communism, we can say that these 10 years have led to a system in which the corps of journalists, and especially the leaders, control journalism without respecting the standards of the modern mass media. This has led journalists who do not practise journalism, to refuse to accept certain Western journalistic models and techniques, because these would undermine the control which this profession exercises over its own system (Coman, 2004; Gross, 2002).
Most successful broadcast and newspaper directors use their medium as personal platforms. On the eve of elections, directors and editors-in-chief of print media monopolize the political debates (see the cases of Ion Cristoiu, Octavian Paler, Cornel Nistorescu, Sorin Rosca Stanescu, Cristian Tudor Popescu, Horia Alexandrescu, Bogdan Chireac etc.). More specifically, they are on the front page of morning newspapers and then, as commentators and panellists, pontificate on the merits of political candidates on evening television shows. Some may appear on two or three shows on the same night. They assume the status of “specialists in everything”, eclipsing bona fide political analysts such as political scientists, sociologists, diplomats, economists and others with a specialization in a field pertinent to an ongoing debate. They have made it their “official” right to express opinions on each and every issue, thus becoming the filter through which any political initiative, politician, party or societal group has to pass in order to be known and recognized. They have power but through this form of engagement with the political class they also give it a considerable amount of influence and, consequently, contribute to the lack of real media freedom and journalistic influence.
The battle for the control of the profession was the salient element in the post-communist media evolution; a large group that fought to enter and stay in the system and a small group that wished to create and legitimize instruments of control waged the battle, which continues to date. Both groups promote a missionary ideology and support the open, non-institutionalized character of the profession. One group exercises discretionary control over the system, and the other discovered that after 20 years of “transition” it was dispossessed of the instruments of control and also of any measure of auto-protection. The latter group failed to negotiate access to the system, salaries, working conditions, all aspects relating to daily journalism, ethical problems, and issues related to professional conscience. In addition, this group found itself dispossessed of its self-identifying discourse, which the other group articulated. Under these conditions the vast majority of journalists lost rights, control over the profession, and over the self-legitimating discourse, generating an acute crisis of identity (Coman, 1998, 2004).
These often slow and covert developments emerged during moments of conflict. A perfect example would be the so-called “three scandals” in 2004 and 2005 when the most important dailies in Romania experienced powerful internal conflicts which were highly mediatized. The conflicts were between the print media employers and journalist-managers on one side (Petre Mihai Bacanu at Romania Liberă, Cornel Nistorescu at Evenimentul zilei, Cristian Tudor Popescu at Adevărul), and media owners (foreigns or Romanians) on the other. In all three cases, in a veiled or direct manner, huge sums (measured against the usual income of the mass media) were extorted, benefiting the leaders of the newspapers. More important were the discreet ways used by these compradores-journalists to control important press companies (Sorin Rosca Stanescu at Alpha and Fulcrum or Mircea Toma at Academia Caţavencu).
Their managerial position allows them several opportunities:
- The accumulation of capital, without the risks (that were placed upon employers, stockholders or the state’s shoulders).
- The construction of a “grey” market around those mass media products by creating their own companies with favourable contracts and draining an important amount of money from the publication funds.
- The realisation of alliances with several economic and political circles.
- The control of the event’s public image construction—in this way every time the governors or employers attempt economic regulation of the media, the businessmen-journalists counter-attack with political commentaries in newspapers, TV or radio shows. In order to maintain legitimacy they role play “civil society” voices, expressions of the craft’s indignation (hiding their own economical interests) and one of freedom’s defenders that accuse politicians of obscure interests (again hiding their own agendas and commercial stake).
All three cases illustrate the huge amount of money that accrued to these newspapers’ “historical” leaders or founders (as compared to a post-communist media journalist’s usual income). More precisely: the wage incomes (fixed by them), the annual profits and dividends, the companies connected to the publication (and where these leaders were owners or main stakeholders) and the commissions received from the companies that had advertising contracts with them.
The three scandals were also about the limitation or even the loss of audiences. In other words, the editorial formula used by historical leaders (Bacanu, Nistorescu and Popescu) no longer impressed the public (at least not the new type of public born in Romania along with the explosion of “white-collar workers”). In the long term, different actors entered the market with suitable products for this type of audience, and made the old titles risk failure or the minimal accepted profitability. The foreign or autochthonous owners dealt with the perspective of losing the audiences and the advertising subsidising sources. This problem was unimportant for the manager-journalists as they supplemented their incomes using the “grey market” (commissions and profit from “tick companies”). This grey market was closed to the employers. In this way, the employers’ group invested in loss while the newsroom leaders multiplied their incomes using Administration Council funds and control over the contracts with advertising firms; they were “capitalists without capitalism”. This is not a new phenomenon, nor one specific to Romania (Coman, 2003; Sparks and Reading, 1998). Nevertheless, this phenomenon is hard to decode as in the name of the fight for “press freedom” the wolves dressed as lambs.
This professional group was only slightly interrogated (in a scientific or journalistic way). In order to identify the scale of their economic power, I will cite two investigations made by The Romanian Center for Investigation of Journalism (www.crji.org/arhivă/050906.html, 12 March 2006) and the magazine Financial Week (February 2008). Both of them cast light upon these new moguls’ social status. The two documentaries devoted to “Romanian journalists’ wealth” mix up some media owners’ financial positions with no journalistic activities: television stars, talk-show hosts, managers, famous writers, independent analysts—all highly promoted by the media. If we focus on the journalistic group, formed by the manager-journalists (people involved in both the Editorial Board and Administration Council), we will find that:
- Most of them own consulting firms with activities in political communication, mass media production and distribution, advertising; some even own firms in other domains (Sorin Rosca Stanescu has firms in agriculture, tourism, the wood industry, alcohol production and Mihai Tatulici’s firms cover the food industry). This situation casts doubts upon some press campaigns started by these journalists’ newspapers (without defending the public interest but promoting personal commercial interests). The most famous case is Bogdan Chireac’s, which started a press campaign against a rival firm in order to get a state contract.
- Concerning their belongings we have, on the one hand, those that display a Franciscan poverty (they either cheated the state, or created firms in their family members or colleagues names), and on the other, those that show off a seigniorial lux.
A few examples:
- Horia Alexandrescu has an enormous residence in Bucharest and one in Breaza, a very selective mountain resort, a class C Mercedes, Wrangler jeep and a VW Golf.
- Cristian Tudor Popescu declares an apartment in Bucharest (worth 100,000 euros), a villa in Breaza (150,000 euros) and deposits of 450,000 euros (from selling his shares from Adevarul si Gandul dailies).
- Bogdan Chireac owns an apartment in Bucharest (worth 300,000 euros), a residence in Mogosoaia (700,000 euros), a Toyota Rawa and 200,000 euros deposits.
- Sorin Rosca Stanescu has an apartment in Bucharest, three holiday villas in different areas and land worth 2,000,000 euros.
- Cornel Nistorescu owns three villas with land (1000 square metres each) in Bucharest, paintings worth 1,000,000 euros, owns 4,000,000 euros from selling his shares at Evenimentul Zileidaily and he drives a S80 Volvo and a BMW X5.
- Dan Diaconescu has a house worth 1,000,000 euros, a 2,000,000 euros residence and a car collection that includes a Bentley Flying Spur, Rolls Royce, Infinity, Porsche, Alpha Romeo and Mercedes SLK.
All this is not to offer an apologia for poverty as honesty or to blame the acquisition of capital in a market-based media system! However, these journalists have significant fortunes judged not only by the standards of a less-developed country, but also in the context of a wealthy capitalist country. Moreover, these journalists did not invest money in launching a press business, but obtained money without risk, simply by taking advantage and manipulating their high-level position in the media system (they aggregated the status of manager, VIP, and opinion leader). The data confirm this covert, “underground” process that is described in my previous and other studies (Coman, 1998, 2003, 2004; Coman and Gross, 2006): a top media institution’s management group used its power in order to obtain political and economical privileges. These journalists only very recently agreed to form an exclusive owner’s group, because editorial control assured them influence over political life which in turn meant a source of economical privileges. By contrast, the media owners’ position entailed risks and obligations. So to avoid them they exchanged their manager status and became members or leaders in Administration Councils, orienting the press institution’s investments toward their own firms and received substantial commissions from the directly negotiated advertising contracts. By putting their “claws” over these resources, they bought stock and became the main stakeholders in other firms or in firms that had contracts with media enterprises; and they protected or promoted their own firms by media campaigns against competitors.
Often the hidden sources (from politician’s thank-you-for-not-bothering-me money, to rewards for not investigating a manager or a company) that so-called star-journalists benefit from, are frequently the subject of media profession “folklore”. Nevertheless, until 2006 no major journalism-related corruption case was brought to the public’s attention or debated by the media. In 2006, however, six journalists from a local newspaper (Gazeta de Cluj) appeared in court charged with blackmailing some local businessmen. The media only presented the press releases of the six and the first few days of the event (charging the six, their reaction, the District Attorney’s statement). Afterwards: total silence, the story has been forgotten.
While commenting upon the way this case was presented in the Romanian media, the authors of the report on media coverage of corruption remarked, not without some irony:
Still, the journalistic guild did not look too surprised by the possibility that the accusations may be true. The event seems to have appeared against the background of some scepticism among the journalists: they knew that blackmail by the press was taking place in Romania. The real surprise seems to be that the Prosecutor’s Office took a position in this case. (Ghinea and Fotiade, 2006, p. 38)
This third category of media moguls is atypical since it was formed by exploiting the system breaches, by reducing the economic risks and maximising the advantages they enjoyed as the “defenders of freedom of speech”. Their history shows the effectiveness of a concept and a communist period-specific behaviour: “double talk”. All these media moguls exploited the double talk resources: one aspect of this double talk was public, based on demagogical exaggeration of their role as defenders of freedom of expression; the other was underground, based on the cynical promotion of their personal interests.