The Hungarian Media Capture Express: Next Stop, Europe

The Hungarian oligarchy has thus far been focused on controlling media at home. Now, they move on to Europe.

As Hungarian elections are fast approaching, political observers and media experts are on the lookout for new media acquisitions by oligarchs close to Fidesz, the right-wing political party of Prime Minister Viktor Orban. This has been the pattern since 2010, a period in which Mr. Orban’s party has been uninterruptedly in power in Hungary. Approximately a year before the elections, the Fidesz-friendly businesses began to take over media outlets that either can be used to boost the party’s voter base or need to be silenced because they’re too critical of the government.

But this time Mr. Orban’s ambitions seem to extend well beyond Hungary’s borders. As most of the news media in Hungary have been brought under Fidesz’s control, Mr. Orban is now expanding his business empire across Europe.

“Nothing can stop this man anymore,” said on condition of anonymity a Romania-based journalist working for a media outlet owned by a company whose Hungarian subsidiary has recently been taken over by investors close to Mr. Orban. The journalist says he and his team have been gathering evidence about a slew of investors mobilized by the Orban family across several European countries to buy key media and internet companies. However, the journalist claims his editor told him to bury the story, at least for the moment, because there is “nothing of public interest in it right now.”

“They have a very clear strategy focused on controlling two things: content and tech,” the journalist said. “They will jump at any opportunity to buy news media and internet companies anywhere they can,” the journalist added, saying that a spate of new acquisitions by investors supportive of Mr. Orban is expected in the coming months.

Two recently concluded major acquisitions are a strong indication of said strategy.

Last December, Portugal-based private equity investment fund Alpac Capital purchased 88% of the shares in Euronews, a pan-European news channel, from its owner, Egyptian businessman Naguib Sawiris. The announcement didn’t surprise anyone as Mr. Sawiris has been trying to sell his stake in the channel for some years now.

However, it soon turned out that the fund is linked to Mr. Orban. The Hungarian Prime Minister is a pal of Mario David, a former MEP and father of Alpac’s CEO. Mr. Orban said after the acquisition was concluded that his Fidesz party had no plans to build a “world empire.” Euronews’s top management also rejected the idea that the channel is in danger of coming under editorial pressures after Alpac’s purchase. Pedro Vargas David, Alpac’s CEO, told Euronews’s staff after the deal was inked that there was no intention to “interfere editorially.”

Nevertheless, two Euronews journalists I spoke to say they are a bit concerned given the long relationship between Alpac and the Hungarian government, and for good reasons. Alpac’s only foreign offices at the moment are in the United Arab Emirates and Hungary. In the past, Fidesz government officials have promoted Alpac in Hungary. The fund has received cash from EXIM, Hungary’s official export credit agency, and some key Hungarian companies, according to Politico. Some of this funding was used to buy Euronews.

Mario David, who served in the European Parliament on behalf of Portugal’s Social Democratic Party, became Mr. Orban’s friend in the 1990s. He later was Mr. Orban’s advisor. The two traveled together in official delegations. Not a surprise that Mr. Orban gave him a state award “as a true friend” of Hungary in 2016. Mr. David said that all the services for the Hungarian Prime Minister were provided pro bono.

Earlier this month, the businessmen around Fidesz concluded another equally important acquisition. The company 4iG bought the Hungarian assets of the Romanian-owned internet company DIGI. 4iG paid a total of €625m for the stake. DIGI was fully owned by RCS & RDS, a major Romania-based internet service provider.

The deal marks the rise of a major telecom player with ambitions beyond the Hungarian borders. By folding its newly acquired assets, as well as some of its companies in the Western Balkans, into a larger group comprising another major telecommunications player in Hungary, Antenna Hungaria, 4iG is now primed to grow into a powerful regional internet company.

A closer look at the company reveals the same web of interests converging back to Fidesz and Mr. Orban. 4iG’s owner and CEO, Gellert Jaszai, used to work for Opus Global, a company owned by Lorinc Meszaros, Mr. Orban’s childhood friend who is now one of the wealthiest oligarchs in Hungary. Last year, 4iG was designated as a strategic company by the Hungarian government. This means the deals the company is involved in do not need to be approved by the local competition authority and can’t be investigated by any state bodies.

Alpac Capital, whose CEO is also a member of the 4iG board, provided funding for this deal, too, according to evidence gathered by MediaPowerMonitor.

This is not the first time Hungary’s oligarchic class is investing in media and tech companies abroad. In recent years, Fidesz-linked oligarchs have made acquisitions of media outlets in Slovenia, a small Eastern European country of two million whose Prime Minister Janez Jansa is a buddy of Mr. Orban, and North Macedonia, another small Balkan nation whose fugitive Prime Minister, Nikola Gruevski, convicted for corruption, was sheltered by Mr. Orban in Budapest four years ago.

At home, in Hungary, Fidesz-supportive oligarchs have taken over swathes of news media. Three years ago, they donated most of their media assets to the European Press and Media Foundation (KESMA), a pro-Orban group that shelters some 500 media organizations.

But while the media in Hungary serves Fidesz in the national elections, the switch to pan-European outlets like Euronews and tech groups with cross-border operations marks a significant change in Fidesz’s strategy.

Mr. Orban, who has been at loggerheads with the EU for the past few years because of his atrocious migration and minority policies and views, might look for more impactful communication weapons that would give him more leverage in the endless fights with Brussels over European funds. Moreover, Mr. Orban, whose morale was significantly buoyed by three consecutive electoral victories in the past 12 years, increasingly likes to pose as the leader of a new, Christian Europe. In recent years, he has organized summits with like-minded populist leaders and has tried to rally to his cause ethnic Hungarians abroad.

To propagate all his ideas, he needs stronger platforms with higher outreach but also a strong foothold in the tech and telecom industry to control the flow of content and communication. With news in 13 languages, Euronews reaches a monthly audience of 15.2 million viewers in Europe and can be watched by 415 million households in 156 countries, according to the channel’s own audience data.

On the other hand, as the internet is still a hard-to-control space where critical opinions can be aired freely, investing in tech infrastructure is key for the future, if Fidesz wants to have one. At home, the DIGI network that Fidesz-controlled 4iG took over, has 1.1 million subscribers, a significant portion of households in a country of less than 10 million people.

All in all, Mr. Orban doesn’t seem to have any concerns at all about winning the Hungarian elections again, which are three months away. His eyes are now set on a much bigger prize.