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Sustain – Not Stop – The Press!In its first decade Media Development Loan Fund moved the balance for independent news media in emerging democracies from subsidy and charity to continuity and sustainability. The success stories are moving, too. But, hold on, its new investment offer will bond!From mid-December the not-for-profit Media Development Loan Fund (MDLF) has launched an investment product aimed at individual and socially responsible investors called Free Press Investment Notes. MDLF Deputy Managing Director Harlan Mandel, in an interview with
Conceived by MDLF Managing Director Sasa Vucinic, the Free Press Investment Notes (FPIN) allow the general public to invest in a flexible financial instrument, choosing both term and interest rate (fixed at below market rate), with a minimum of $US 1000. Since 1996 MDLF has loaned nearly US$ 40 million, with a write-off rate less than 2%. MDLF’s Free Press Investment Notes are similar in terms to the Calvert Foundation’s Community Investment Notes (CIN), a pioneering investment instrument benefiting US community development. Fast Business magazine named Calvert Foundation “Social Capitalist” of 2006 and featured the organization in the January 2006 edition. Calvert Foundation recently partnered with investment banking house Incapital to broaden its market for CIN to US brokers. Calvert Foundation, not to be confused with the venture capital Calvert Group, administers the Free Press Investment Notes for MDLF. “It took some time to figure out how to do it legally,” said Mandel. And it will take a bit more time to make the offer generally available, now only available in 20 US States and the District of Columbia. More US States will follow, as will similar products for European and Asian investors in 2006. MDLF anticipates raising US$ 10 million within three years, adding to its revolving loan pool built on repayments and grants from notable foundations and development agencies. One of MDLFs well-known success stories, Aceh (Indonesia) radio news agency 68H, figured prominently in re-building media outlets following last December’s tragic Boxing Day tsunami. Another is Belgrade radio, and now television station B 92, where Sasa Vucinic worked before co-founding MDLF.
The lion’s share of MDLF’s investments has gone to media – press, TV, radio, news agencies and online media – in the former Soviet Union and former Yugoslavia. Mandel pointed out that, because of the strict due-diligence, “some” level of rule of law must be in place. And publishers and television operators have been the dominant beneficiaries, roughly 90% of loans and “other program related investments.”
"Noseweek (South Africa) was founded on too little capital."MDLF functions, as Mandel describes it, much like an investment banker but with a “different product.” With a strict loan application and processing criteria plus a hands-on “long term-relationship with every client” the success rate is high. Sustainability and capacity building go hand in hand with financial assistance. That “different product” – independent media in transitional countries – is MDLF’s “longer horizon,” a battle fought by the other co-founder, George Soros. According to legend, Sasa Vucinic pitched the idea of an investment fund for independent media to Soros, who told him it wouldn’t work but contributed anyway, so long as other foundations contributed. After a decade and 80 investments in place, MDLF takes another step toward insuring financial independence for media struggling to keep their voices. |
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Mandel describes the success of Altapress, a publisher in Western Siberia formed by three journalists in 1990. MDLF provided business planning and, thereafter, financing for modern printing facilities. Fending off hostile local authorities by publishing the popular and respected weekly Svobodnyi Kurs (Free Course) Altapress was awarded Die Zeit’s Young Press Eastern Europe prize in 2003. Today the company owns nine publications, employs 1000 and has grown into the 5th largest publisher in Russia.