Romanian oligarchs slow down their assault of the media market

According to the latest unofficial informations, ‘Adevărul’, a title recently taken over by the controversial Romanian oil mogul Dinu Patriciu, desisted its plans for a local editions expansion. The management of the new press holding also announced several weeks ago, at a meeting with the ‘Adevarul’ team, that Patriciu’s plans for a television would be put on hold.

It all could be interpreted as bad news for the market, but actually the opposite is true. Finally, one of the Romanian oligarchs started to resize his strategy according to the HR available on the market and to some coherent development plans, possibly due to the appointment of a professional print media manager as a GM of his holding, in the person of Razvan Corneţeanu, former executive director of the most important division at the successful Ringier Romania.

Patriciu’s strategy rethinking might be followed by Sorin Ovidiu Vîntu, the other big and controversial new investor on the market. Voiculescu and Sîrbu, the two other Romanian media moguls, might also slow down some of their very brisk and schematic development plans. And Ringier Romania, the ‘5th Big’ in Romanian media, might lose less of its employees in the future.

Fresh money on the market

Patriciu’s involvement into the Romanian media market is a part of the ‘oligarchs assault’ that started earlier this year. Vîntu, a controversial Romanian billionaire, started to throw in a lot of money in January-February 2006. His media assault might be related to a very bad public image he got at the beginning of the decade. In 2000-2001, he had had to face a wave of unpopularity because of the rise and fall of FNI, an investment fund which at a certain point became a Ponzi phenomenon [EN] or pyramid game. Said to have a personal fortune of nearly 1 billion US dollars, Vîntu had to face various charges but to this point escaped any conviction.

This spring, the Romanian billionaire took over the ‘Academia Caţavencu’ holding, consisting of various titles among which the influential satire weekly eponymous, the ‘Cotidianul’ daily newspaper, a women glossy and ‘B 24 Fun’, the most successful free lifestyle weekly in Romania. Vîntu also launched a business television, The Money Channel, and a news agency, NewsIn, and publicly admitted he owns Realitatea TV, the highest rating and oldest rolling news TV station in Romania, after previously denying his involvement.

Patriciu’s assault started at the end of 2005 with the take-over of ‘Dilema veche’, an intellectual stronghold of the anti corruption fight, with political views close to the winning right-wing government alliance “Justice and Truth” (D.A.), and some other small ‘culture’ publications previously sponsored by Mircea Dinescu, a famous poet, journalist and ex-dissident. The acquisition was followed during this summer by Patriciu’s first massive involvment into the market, with ‘Adevarul’, one of the strong titles on the Romanian market until 2005, March, when the editorial team left the newspaper to form ‘Gândul’.

Dinu Patriciu is also one of the top Romanian businessmen, with a fortune of the same size as Vîntu, and is under prosecution for some economic charges related to him taking over the Rompetrol [EN], an ex-state oil giant. Various authoritative voices in the Romanian media have seen the two businessmen massive investment into the media market as a preemptive move against the actual government’s anti-corruption campaign, an important point in their list of electoral promises and also a “red flag” in some earlier EU country reports.

The ‘5 big’ and the status quo

The other two big Romanian media players on the market, Adrian Sîrbu and Dan Voiculescu, started their businesses back in 1995-1996 and have a stronger position, especially on the TV market, but are also connected to the political class and had to face various charges and allegations of using their media empires as pressure instruments to increase their wealth and success. Sîrbu is the general manager and owner of 10 % of the Pro TV, the most important TV station in Romania, and Acasa TV, a successful niche TV station targeted at women, which during the last years started to achieve ratings that place it as the third commercial TV station. Sîrbu also owns various print titles such as ‘Ziarul financiar’ (business newspaper) or ‘Business Magazin’, got the franchises for the Romanian editions of ‘Playboy’ and ‘Maxim’ and is the main shareholder of two radio stations, Pro FM and Info Pro. Sîrbu’s main associate is Central Europe Media Enterprises or CME [EN], the Ronald Lauder media holding owning various assets in East Europe.

According to various allegations, Sîrbu chose to give the ex-government, ex-communist social-democratic party (PSD) a friendly coverage in his titles and televisions, in exchange of some indulgent delays accorded to his media empire in terms of taxes due to the state budget. At a certain point, he was owing as much as 6 million US dollars.

Dan Voiculescu controls the 2nd commercial TV station in Romania, Antena 1, the most important sports newspaper, ‘Gazeta sporturilor’ (slightly better results than its main competitor, ‘Pro Sport’ - Ringier) and the 2nd general interest daily newspaper, ‘Jurnalul naţional’. Also the leader of the small Conservative Party (PC), Voiculescu has been accused in the past to use his media channels to favor his political party and its allies, especially the ex-government PSD.

Great intentions, smaller achievements

Both Voiculescu and Sîrbu stated earlier this year they would launch various media outlets. The Intact-Antena holding (Voiculescu) promised in a press release ‘two TV stations and a popular newspaper’ until the end of 2006, but only some news about one niche TV station, with an uncertain date of launching, appeared since. Media Pro (Sîrbu) announced one business TV station and a sports television during 2006, but the business TV seems a postponed plan, and the sports TV appears to be TV Sport, taken over from Silviu Prigoana.

Ringier Romania [EN], a Swiss company and the fifth big competitor on the Romanian media market, didn’t state or achieve any strong expansion plans during 2006. Several weeks ago, most of the team from ‘Libertatea’, the biggest sales newspaper, left to relaunch ‘Averea’ as ‘Click’, a tabloid with a close formula to the Ringier title. Until now, ‘Libertatea’’s sales didn’t diminish, according to some internal informations at Ringier Romania. Two of the editorialists of ‘Evenimentul zilei’ left for ‘Adevărul’ (Patriciu), to became the editor-in-chief and the deputy-editor-in-chief of the title.

Prior to the people hemorragy, Ringier had launched at the beginning of May 2006 the first free newspaper of Romania, ‘Compact’, and at the end of 2005, a successful women weekly, ‘Libertatea pentru femei’.

Sîrbu and Voiculescu proved to be tangibly active mainly on the new media market, with several new TV shows sites (Sîrbu) and some successful spin-offs of ‘Gazeta sporturilor’, which has the most popular news site in Romania, GSP.ro [RO].

At the end of the day: the media market is normalizing

As it was said above, various voices on the market have regarded the ‘Big 4′ expansion on the Romanian media market as a preemptive move to meet the anti-corruption campaign of the winners of the 2004 elections. The expansion plans of the Romanian moguls have targeted the already crowded market of the daily newspapers or some politically influent TV stations such as Voiculescu’s Antena 3, while, by contrast, foreign investors look for unoccupied niches, like Ringier, or the weak local newspapers networks. In addition to the HR crisis, a bad effect of the money thrown into the market would have been the inflation of new titles, while the Romanian press is already abundant in small circulation publications, with uneven business strategies and suspicions of political biasing of the content. However, the vain promises and the overdose of money the Romanian investors were pumping into the media market six months ago seem to be, or at least will soon become, history. The expansion will probably continue, but according to more even, strategic plans, which will make of the money the good news it usually is on a market.

Overall, the crucial moment in the decision process of the 2+2 (new+old) moguls on the Romanian media market will be the publishing of the sales figures of the new ‘Averea’ [EN], to be relaunched in the near future as ‘Click’. Very good results of the former team at the very successful ‘Libertatea’ (Ringier) with Patriciu’s new tabloid title is the best that a new investor on the market can expect. The me-too strategy of the former ‘Libertatea’ journalists and the constancy of their old title suggest, however, not-so-good news in that respect.

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1. [...] Am facut ceva mai cuprinzator pe tema asta aici, la Comanescu.ro, cu informatii de context interesante pentru extraterestii aflati in vizita in Romania. [...]

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