Ringier ups capital of Hungary’s top left-wing daily

Swiss multinational Ringier is giving a capital boost of HUF 750 million (roughly EUR 2.5 million) to the left-wing newspaper Népszabadság, Hungary’s top news daily, which is currently operating at a loss, HVG reports. Ringier’s decision comes after its failed deal to sell its majority shares of Népszabadság to the Szabad Sajtó Foundation, which is run by the Hungarian Socialist Party (MSZP). According to HVG, Ringier was trying to sell its shares of the paper so the Media Council would approve its merger with German media conglomerate Axel Springer. The Media Council blocked the merger last year, and according to HVG, it was rumored that the the Council informally agreed to clear the merger if Ringier sold its holdings of Népszabadság.

Nepszabadsag, which has long been linked to Hungary’s Socialist party, has been operating at a loss since 2008. The paper, Hungary’s country’s largest circulation news daily, was hit hard by the 2008 economic crisis and the widely reported shift in state ad spending to pro-Government media companies since the change of government in 2010. According to HVG, since 2010 Ringier has gradually expanded its influence over Nepszabadsag. In 2010, a general manager of Ringier became the vice president of the daily and the editorial staff lost its power to veto the appointment of its chief editor, because the daily had been operating at a loss for several years. In 2009 and 2010 both Ringier and Szabad Sajtó increased their capital in Népszabadság. In 2011, Ringier offered to buy the shares from Szabad Sajtó, and then a year later it tried to sell its majority shares to the Socialist-run foundation.

As HVG reported previously, it was rumored that the Media Council exerted pressure on the Swiss publisher to leave Népszabadsag in exchange for the Council’s approval of Ringer’s merger with Axel Springer. In 2010, Ringier and the German-based Axel Springer formed a joint company to expand their positions in the Central and Eastern European media market. Accoring to HVG, the merger was approved by the Swiss, Austrian, German, Czech, Slovakian and Serbian antitrust authorities, but the Hungarian Competition Authority postponed its decision for a year and then ruled that the Media Council’s approval was needed to authorize the merger. Under the 2010 media laws, the Media Council has some decision-making powers in cases of media mergers.

In April 2011, the Media Council decided against the merger on grounds it would jeopardize the public’s “right to diverse information.” Ringer and Axel Springer have extensive media holdings in Hungary’s print sector. According to HVG, the Media Council informally told Ringier that if it left Nepszabadsag, it would approve the merger with Axel Springer.

In 2012, Ringier initiated talks to sell its majority shares of Nepszabadsag to Szabad Sajtó but they did not come to an agreement. Sources affiliated with the Socialists told HVG in 2012 that Ringier offered its shares for EUR 1.