Pay To Play Or Fight Another Day

Michael Hedges September 6, 2016 - Follow on Twitter

Media owners, big and otherwise, are being challenged to put-up or shut-up, sometimes literally. Austerity economics mixed with a side of populism has opened the door for every government to think of broadcasting as a revenue opportunity. Then, too, accountability is a bigger issue than ever.

The big Greek television license auction was held last week. Those bidding were sequestered at the Press Ministry for more than three days, mobile phones banned to prevent leaks. Nobody said it was a picnic, some described it as like reality TV show “Survivor.”

The Greek government, the auctioneer, was the most notable winner, raising €246.5 million in hard, cold cash. Two incumbent TV broadcasters, Skai and Antenna Group (ANT1), bid successfully, paying €43.6 million and €75.9 million, respectively. Opening minimum bids were set at €3 million, paid in advance.

Shipping company owner Vangelis Marinakis is making his first foray into big time broadcasting, bidding €73.9 million. Mr. Marinakis also owns popular football team Olympiakos. Construction contractor Yannis Kalogritsas bid €52.6 million to enter Greek TV land. He’s the son of billionaire construction company owner Christos Kalogritsas.

Leaving the marathon auction, Skai chief executive Kostas Kimpouropoulos said he “wasn’t contesting a license. We came to negotiate a ransom,” quoted by capital.gr (September 2). The auction effectively halved the number of privately owned national TV operators as the government contends ad revenues can support only four. ZenithOptimedia estimated 2015 TV ad revenues in Greece at €460 million. The Greek government said it is likely closer to €280 million due to discounting.

"The completion of the television license auction puts an end to 27 years of lawlessness,” said Minister of State Nikos Pappas, in a closing statement. "The Greek Government has acted decisively and fairly to open up and streamline the unregulated ad hoc chaos that existed within the TV market and we have done so in a transparent and unimpeachable manner. We are profoundly very satisfied, and very happy for the outcome of the auction, especially because we have managed to send a message both inside and outside the country, and that is something that Greece needs, especially after the economic crisis, that Greece is a country that is recovering.''

The winners have two weeks to deposit one-third of their promised bid amounts, temporary licenses then issued. Four runners-up were chosen, also by bid. In the event any of the first four fail to meet “asset and wealth” requirements for licensing the waiting-room is full. New licensees must then describe in detail their operating plans, including employee headcount and program descriptions. After a period of wrangling over the details – not to forget any legal challenges – 10-year licenses will be issued in December. Over the last three decades radio and TV broadcasters have been issued provisional licenses, frequently renewed without process.

Noting that the previous government of Prime Minister Antonis Samaras public broadcaster ERT was auspiciously closed, the winners are expected to demand from the government a commitment to not change their minds and grant more national TV licenses. ERT was shutdown in 2013 as part of austerity demands to shed public sector workers. About 2,700 were terminated, many of whom took to the streets in protest joined by angry citizens. A shell State broadcaster operated briefly. Re-authorized by the Greek Parliament of the newly formed government ERT returned in 2015.

With national television licensing out of the way, presumably, regional and thematic TV licenses will be next, followed by radio licenses. Along the way, the Greek parliament is debating a new law on broadcast advertising, expected to form a State “advertising marketplace… to curb tax evasion,” said an official statement (September 2).

Those not invited to the ordeal or falling short in the bidding have not taken the result lightly. Employees of Mega TV, the broadcaster owned by the insolvent Tiletipos, gathered to demand the five months unpaid salaries from company shareholders and the government. Shareholders agreed then backed away from a bailout in May. "We are talking about human lives and not just accounting figures," said one, quoted by iefimerida.gr (September 4). Mega TV was not invited to the bidding and will go dark in 90 days. Several of the failing bidders suggested they might opt for thematic channel licensing or pay-TV platforms.

“It was worse than we imagined,” said Alpha TV chief executive Dimitris Foyrlemadis after bidding €61 million only to be a runner-up. “We have many weapons in the quiver, said Alpha Group owner Dimitris Kontominas, quoted by eleftherostypos.gr (September 4). “Vindication will come soon.” Alpha TV, Skai and Mega TV are the original privately owned TV operators in Greece.

Officials in Cyprus – not to forget its media workers – are waiting to see what might happen to Alpha TV and Mega TV channels broadcasting on their island.

See also in ftm Knowledge

Media in Greece, Cyprus and Macedonia

The Greek media world has been turned upside down in recent years. Financial constraints coupled with political confusion seem endless while digital media promises a new future. Media in Cyprus, largely tied to Greece, shows certain signs of stress while media in neighboring Macedonia remains under stress. This ftm Knowledge file explores the bright spots and all the rest. Includes updated Resources. 82 pages PDF (June 2014)

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