06. 07. 2005

NEW OWNER, OLD CONCEPT

BELGRADE, July 6, 2005 – Around 150 radio and television stations in Serbia, to be privatized until the middle of next year, are founded and owned by local governments. The process of privatization of local media could finally get under way, since the Ministry of Culture and Media has recently adopted the new Bylaw on privatization of these radio and television stations. Although the privatization of those media outlets is to be conducted in line with the Privatisation Act, the Bylaw would regulate the protection of the professional conduct. The Bylaw on privatization of local and regional radio and television stations prohibits political party or legal entity owning a political party, or institutions founded by the Republic of Serbia or autonomous province, to buy those stations. The potential buyer will also be obliged to provide the assessment of the Broadcast Agency regarding the unauthorized media concentration in order to participate in the tender or auction. The Bylaw also stipulates that the continuity in production and program broadcasting needs to be maintained from the day of selling contract signing and for the period of at least five years. In this period, the owner will not be allowed to change the professional orientation. If the privatization is concluded before the frequency allocation competition, the purchase itself does not guarantee the buyer the broadcast license. The Bylaw stipulates that “the provision referring to maintaining the continuity in production and program broadcasting does not apply to RTV stations unsuccessful in the license issuing public competition”. Despite this, Slobodan Kremenjak, legal representative of the Association of Independent Electronic Media (ANEM), with its twelve radio and television stations waiting for the privatisation, predicts that this process would start very soon, before the frequency allocation procedure. “Maybe that’s the better way”, Kremenjak said, representing the general view of the Association, “since it would leave space for the buyers’ necessary investment”. “If the process of broadcast license issuing is concluded before the privatisation, there is a possible risk that half of those broadcasters would close down due to their difficult financial state. It is an advantage, though, for those believing that their media outlet could operate commercially, since they can reorganize and buy off the station at a considerably low price”, said Kremenjak. Member of the Broadcast Agency Council Slobodan Djoric also expects the privatisation process to begin before local and regional radio and television stations enter the process of frequency allocation, but probably not before next year. “The frequencies would be in stations’ use for eight years, which would multiply the value of those stations that get the frequency. Buyers interested to purchase before the frequency allocation process would have to make good assessment of what they are buying. However, all the cards would be on the table before the competition, so they would know exactly the size of the media market, competition, the criteria and costs. Based on that, the potential buyers will decide if their investment is worthwhile”, Djoric explained. He also points out that the basic program concept is not subject to change, adding that the Broadcast Agency would determine the program standards available for the broadcasters before the competition.