Not Even Rich People Feel Safe In The Media Business

Michael Hedges June 19, 2017 Follow on Twitter

For media outlets in fledgling democracies getting ahead of the curve, so to speak, is difficult. Agents of media development, largely from the outside, will do only so much, particularly as results depend on factors unseen and unexpected. Local owners and operators see only hard decisions. Those on the front-line are left to their own wit and wisdom.

Employees of Macedonia’s oldest privately owned daily newspaper Dnevnik were sent “on vacation” last week. Actually, they were given three weeks pay and told not to come back. Dnevnik and its web portal have closed.

Dnevnik was published by Media Print Macedonia (MPM), a subsidiary of Graphic Center. It was forced into bankruptcy proceedings earlier this year, heavily in debt and unable to secure forward financing. In early May two monthly newspapers published by MPM - Utrinski Vesnik and Vest - were closed. The three newspapers thrived in the late 1990’s. Sports daily Macedonia Sport seems to have escaped closure.

MPM was formed in 2004 by German media house WAZ Media Group as it invested widely in the Western Balkans. WAZ Media Group exited Macedonia in 2012, part of a general retreat from the region. The buyer was investment house Orka Holding, whose chief executive was Macedonian politician and diplomat Srgjan Kerim, once WAZ Group’s chief executive for the Balkans. Ownership was shuffled again as Orka Holding principal Orce (Jordan) Kamchev, Macedonia’s richest person (Forbes list 2015), took a majority stake. Mr. Kerim, retired from Orka Holdings, retained a one-third stake through a separate company, according to bankruptcy proceedings.

Two months before the Dnevnik closing, MPM complained when news crews from television channels 24 Vesti and TV Nova gathered at the company’s human resources department, interviewing employees who were asking about their future. The company’s financial difficulties were well known. Distrust among workers was raised when a similarly named company, suspected to be MPM owners banking on a post-bankruptcy - and debt absolved - return, posted ads for media workers.

Macedonia’s media sector has long been on the edge financially. Media outlets were opening apace twenty years ago, largely on outside investment, hopeful of expanding economic prospects. GDP growth rate rose steadily from the Great Recession low (minus 2% in 2009) to a peak in 2011 (6%) only to fall again two years later (minus 1%). By the end of 2016 GDP growth rate had peaked again (slightly over 6%) only to fall again. Economic and political uncertainty are closely related. Testing an austerity program to control public debt, government advertising, estimated at 30% of total ad spending, was curtailed, officially a moratorium, in 2015.

A year before WAZ Group exited Macedonia television channel A1 was closed, owner Velija Ramkovski was jailed for financial crimes. Several newspapers that Mr. Ramkovski claimed to own, though officially titled to others, were also shuttered leaving 800 media workers unemployed, according to mediaobservators.net (April 23 2014). He claimed a personal and political vendetta by now former Prime Minister Nikola Gruevski. Mr. Ramkovski died in prison last February.

Of the countries once comprising Yugoslavia Macedonia received the lowest overall score in the recently released (June 15) IREX Media Sustainability Index 2017. It is placed in the “unsustainable mixed system” category beneath Bosnia & Herzegovina and Serbia. Kosovo, Croatia and Montenegro, in that order, are in the “near sustainability” category. IREX does not rate Slovenia, which declared independence from Yugoslavia in 1991 and became an EU Member State in 2004.

For Macedonia IREX give highest scores to supporting institutions and lowest to business management of media outlets. Media-related trade organizations and NGOs abound in Macedonia. IREX notes that only the Macedonian Media Association, related to the Macedonian Chamber of Commerce, has much clout. Other groups that provide training or support are largely dependent on funding, if not direction, from outside.

Business practices within Macedonian media outlets are affected, according to the IREX report, by the marketplace. Advertising is the primary revenue stream but a plethora of pushes ad rates lower. The largest media houses, shrinking as they are, are owned by local people with larger business interests. Survival - or sustainability - is dependent on influence.

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