Economy
Economic interests behind allegedly politics-related firing of Hungarian online editor
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A local news portal, 444.hu, claims German economic interest and Hungarian political aspects are the key in this story, adding that the fate of origo.hu had already been decided before Sáling’s appointment last November.
Mutual consent. Right.
The owner of the popular Origo.hu website, Origo Zrt. - a subsidiary of German telecom giant Deutsche Telekom AG - said that Sáling was stepping down "by mutual consent", but denied allegations the editor had been booted out for political reasons.
The termination was "not my initiative," Sáling told AFP without giving further details.
An Origo journalist told AFP anonymously however that Sáling was "forced out" for political reasons after the site published a story about the massive expenses Lázár claimed on his foreign travels.
Although management insisted that Sáling was not fired because of political pressure, on Wednesday they already tied to persuade members of the editorial to stay at least until September. They promised that if they remain on board until then, their severance payment will be three months worth of salary. Some did not wait, though, such as Zsolt Pethő, the author of the story on Lázár’s trips.
The editorial of origo.hu itself also published a separate statement, saying they do not agree with the editor’s sacking for their opinion has not been taken into consideration. “In the current situation Origo’s editorial does not see it ensured to continue its job as previously." Management argued Sáling was laid off because of a “shift in consumer habits".
Around 1,000 people, including many journalists, marched Tuesday evening from the Origo offices to the Hungarian Parliament in protest at the editor's removal.
The Telekom connection
“This woman was sent here to smooth every conflict with Orbán [and his government] and ensure the group’s revenues and leading position in Hungary. This is what is happening now," 444.hu cited an unnamed source, “B." who had taken part in several large telecom businesses before. The source was referring to Kerstin Günther, who was appointed Chairwoman of MTel’s Board of Directors last April.
The source claims Günther is the key player in this process which ended up with Sáling being fired for getting into conflict with German economic and local (Fidesz) political interests.
Origo Zrt. is the owner/publisher of origo.hu. Its owner is Magyar Telekom, which is owned by Deutsche Telekom, which is partly owned by the German state.
A large part of Magyar Telekom’s revenues stem from state orders. It even has a department responsible for relations with the government. Its head is Balázs Máthé, Deputy CEO and Chief Legal and Corporate Affairs Officer. For a long time he has been consulting directly with Lázár who is responsible for telecom issues from the cabinet’s part.
Whereas Máthé did not comment on the issue (he legally cannot), on several occasions Origo’s journalists learned about government complaints through Máthé allegedly saying Lázár was sad about this or that, 444.hu said.
After the 2010 elections no one cared one bit why Lázár was sad about, as relations between the company and the government were rather hostile. The special tax imposed on the telecom sector hit MTel hard and Vodafone starting to snatch some of its state and municipality orders too. Regardless of these relations between Germany and Hungary were not too bright, either, as local politicians had difficulties getting along with Chairman-CEO Christopher Mattheisen.
In the autumn of 2012 PM Viktor Orbán and German Chancellor Angela Merkel had a good spirited meeting. As German-Hungarian relations began to thaw, the positions of MTel improved too.
The Great Fixer
In April 2013 - allegedly at the request of the government - the functions of the Chairman and the CEO were separated and 47-year-old Kerstin Günther was appointed Chairwoman of the Board. She had ample knowledge of the Hungarian political scene, as she started her career in the 1990s in Hungary and socialized professionally amid the Hungarian privatization era. She and all the main political and economic figures go back a long time, which is understandable given that between 1997 and 2001 she was in charge of relations with Hungarian regulators, i.e. she was the one to talk with government officials. Whenever the János Lázárs of that time had a problem with MTel, Günther was the one they had to turn to.
She is known in the industry as a rock hard executor (just like Lázár is seen in the political arena as the person who gets things done), who is taken more seriously than Mattheisen was on the market, as well.
According to 444.hu, her mission was to iron out every conflict between MTel and the cabinet.
Keeping the mobile frequencies used by T-Mobil was pivotal for MTel, for instance. Frequencies belong to the state and concessions are granted for (hefty) fees and for limited periods of time. There are tonnes of fleet contracts and other business relations between the company and the state. If MTel wants to expand it needs state approval in many cases, e.g. a green-light by the competition authority.
The most important issue in 2013 was the future of mobile frequencies. The government was suggesting for a long time that these will be redistributed. MTel’s greatest revenues are generated by its mobile arm so it was crucial for the group to be able to use its existing frequency further. In the autumn of 2013 the cabinet decided to extend the frequency usage rights of the three local mobile carriers, Magyar Telekom, Vodafone and Telenor in the 1800 MHz frequency band otherwise expiring on 7 October, 2014 and in the 900 MHz frequency band otherwise expiring on May 4, 2016 for MTel and Telenor and on October 8, 2014 for Vodafone have been extended and harmonized until April 7 and 8, 2022, respectively.
MTel was required to pay HUF 34 bn of the HUF 100 bn the state was to collect from the extension. This sum was the result of tough negotiations, 444. hu said.
In exchange for this “deal" the government also asked MTel to either reign in Origo or let it go. A senior government official confirmed that the agreement included expectations concerning Origo. This negotiation took place between Günther and Lázár, it added.
Several other unnamed sources confirmed that they had held talks even before Günther came to Budapest, and that Lázár presented a list of conditions he wanted to be met in exchange for the mobile frequencies. He also handed over a 150-page study containing detailed analysis on the news of hirado.hu and origo.hu, which came to the conclusion that compared to the site collecting the reports of the public media origo.hu is an opposition site of dramatic proportions. This study has later become a reference document within MTel.
The loss-making media business that does not even fit into its profile is of no importance for MTel, especially compared to its mobile segment. That is why the board headed by Kerstin Günther also attempted to persuade Origo Zrt. to try and make the editorial listen to political requests so that this “opposition status" would not be a hindrance to other businesses.
There was another key event at the end of 2013, namely that sale and marketing director István Kozári left Origo and sales issues were taken over by CEO Miklós Vaszily.
The business managers of the market leader portal have been ailed for a long time by the fact that the government’s online advertisement expenditures were directed predominantly to rival website Index.hu. Back in 2008, Origo received the biggest share of the state’s digital advertising spending. It accounted for 34.6% of all such expenditures that year, whereas by 2012 the Central European Media Partners (CEMP), the owner of Index (and Portfolio.hu among others) had a 58.2% share. 444.hu referred to a report by Mérték - a watchdog and think-tank dealing with media policy issues - on the state’s advertising spending between 2008 and 2012 when saying that such a huge change was not justified by market developments.
In the last months of 2013, Origo.hu’s position began to improve in this respect too. IMG, the agency in charge of the government’s digital advertising budget started to spend money at Origo more often. IMG and by extension the Hungarian government became an important advertising client.
"[...] we should do something about RTL Klub and Origo"
As the business relations between the government and MTel, and therefore the government and Origo Zrt. kept improving, company executives increasingly thought that if a problematic article is published, the telco's entire business in Hungary may be endangered, The company attributed economic consequences to political complaints. Criticism of the content was understood as blackmail in disguise. When Máthé, brought news about Lázár or somebody else being sad, it meant that something was wrong with an article, a scandal had broken out, and journalists should take care not to let something similar happen again.
In 2013 editors at Origo.hu received such messages ever more often and with ever greater severity. They could feel in more and more cases that political discontent should be considered seriously, 444.hu said.
Recently Lázár stated in government circles that “we should do something about RTL Klub and Origo".
Lázár has never hidden his aversion to RTL, for instance on Wednesday he said that RTL Klub is a threat to the country.
"[...] RTL is threatening the country’; it is blackmailing the viewers and the politicians. It would be best if it practiced this at home, in Germany, rather than in Hungary," Lázár said referring to how the broadcaster reacted to the plan of a new advertising tax.
In his view RTL as a large international media company must bear a much bigger share of public burdens than before.
Notwithstanding, in most cases Origo.hu’s editors did not change their journalistic standards. According to most journalists at the website Sáling was ousted because Origo Zrt.’s executives became fed up with this and wanted political requests at last implemented by the editors.
Nothing may represent this embrace better than what Lázár announced at his parliamentary hearing early on Wednesday afternoon, one day after Sáling had been dismissed. Origo’s owner, MTel and the Hungarian government will launch a joint development project worth hundreds of billions of forints.
Press freedom at risk
Since coming to power in 2010, Orbán's government, re-elected in April, has often been accused of trying to curb press freedom, particularly since setting up a powerful new regulatory authority and centralising public media.
The latest attempt in this regard was a bill submitted to Parliament on a new advertising tax that would be payable as a proportion to revenues with rates up to 40%.Both TV2 and RTL, Hungary’s two largest commercial television channels, have objected to the cabinet’s plan to impose a hefty advertising tax on media companies. RTL said it was "shocked" to learn about the bill submitted to Parliament, adding that about half of the tax obligation would burden the company. TV2 said the approval of the bill would have "unforeseeable consequences" for media companies, especially on the TV sector and on TV2.Lázár said on Wednesday revenues collected from the levy will be fully spent on children, more specifically on the development of schools and the modernisation and expansion of educational institutions. He also made other harsher remarks that are unlikely to be the magnet for foreign capital.Hungary’s Constitutional Court ruled late last month that the content provider of any website can be held responsible for comments infringing other persons’ rights even if it was not aware of the infringing content, regardless whether the content in question was removed at once at the requests of the aggrieved party.
The owner of the popular Origo.hu website, Origo Zrt. - a subsidiary of German telecom giant Deutsche Telekom AG - said that Sáling was stepping down "by mutual consent", but denied allegations the editor had been booted out for political reasons.
The termination was "not my initiative," Sáling told AFP without giving further details.
An Origo journalist told AFP anonymously however that Sáling was "forced out" for political reasons after the site published a story about the massive expenses Lázár claimed on his foreign travels.
Although management insisted that Sáling was not fired because of political pressure, on Wednesday they already tied to persuade members of the editorial to stay at least until September. They promised that if they remain on board until then, their severance payment will be three months worth of salary. Some did not wait, though, such as Zsolt Pethő, the author of the story on Lázár’s trips.
The editorial of origo.hu itself also published a separate statement, saying they do not agree with the editor’s sacking for their opinion has not been taken into consideration. “In the current situation Origo’s editorial does not see it ensured to continue its job as previously." Management argued Sáling was laid off because of a “shift in consumer habits".
Around 1,000 people, including many journalists, marched Tuesday evening from the Origo offices to the Hungarian Parliament in protest at the editor's removal.
The Telekom connection
“This woman was sent here to smooth every conflict with Orbán [and his government] and ensure the group’s revenues and leading position in Hungary. This is what is happening now," 444.hu cited an unnamed source, “B." who had taken part in several large telecom businesses before. The source was referring to Kerstin Günther, who was appointed Chairwoman of MTel’s Board of Directors last April.
The source claims Günther is the key player in this process which ended up with Sáling being fired for getting into conflict with German economic and local (Fidesz) political interests.
Origo Zrt. is the owner/publisher of origo.hu. Its owner is Magyar Telekom, which is owned by Deutsche Telekom, which is partly owned by the German state.
A large part of Magyar Telekom’s revenues stem from state orders. It even has a department responsible for relations with the government. Its head is Balázs Máthé, Deputy CEO and Chief Legal and Corporate Affairs Officer. For a long time he has been consulting directly with Lázár who is responsible for telecom issues from the cabinet’s part.
Whereas Máthé did not comment on the issue (he legally cannot), on several occasions Origo’s journalists learned about government complaints through Máthé allegedly saying Lázár was sad about this or that, 444.hu said.
After the 2010 elections no one cared one bit why Lázár was sad about, as relations between the company and the government were rather hostile. The special tax imposed on the telecom sector hit MTel hard and Vodafone starting to snatch some of its state and municipality orders too. Regardless of these relations between Germany and Hungary were not too bright, either, as local politicians had difficulties getting along with Chairman-CEO Christopher Mattheisen.
In the autumn of 2012 PM Viktor Orbán and German Chancellor Angela Merkel had a good spirited meeting. As German-Hungarian relations began to thaw, the positions of MTel improved too.
The Great Fixer
In April 2013 - allegedly at the request of the government - the functions of the Chairman and the CEO were separated and 47-year-old Kerstin Günther was appointed Chairwoman of the Board. She had ample knowledge of the Hungarian political scene, as she started her career in the 1990s in Hungary and socialized professionally amid the Hungarian privatization era. She and all the main political and economic figures go back a long time, which is understandable given that between 1997 and 2001 she was in charge of relations with Hungarian regulators, i.e. she was the one to talk with government officials. Whenever the János Lázárs of that time had a problem with MTel, Günther was the one they had to turn to.
She is known in the industry as a rock hard executor (just like Lázár is seen in the political arena as the person who gets things done), who is taken more seriously than Mattheisen was on the market, as well.
According to 444.hu, her mission was to iron out every conflict between MTel and the cabinet.
Keeping the mobile frequencies used by T-Mobil was pivotal for MTel, for instance. Frequencies belong to the state and concessions are granted for (hefty) fees and for limited periods of time. There are tonnes of fleet contracts and other business relations between the company and the state. If MTel wants to expand it needs state approval in many cases, e.g. a green-light by the competition authority.
The most important issue in 2013 was the future of mobile frequencies. The government was suggesting for a long time that these will be redistributed. MTel’s greatest revenues are generated by its mobile arm so it was crucial for the group to be able to use its existing frequency further. In the autumn of 2013 the cabinet decided to extend the frequency usage rights of the three local mobile carriers, Magyar Telekom, Vodafone and Telenor in the 1800 MHz frequency band otherwise expiring on 7 October, 2014 and in the 900 MHz frequency band otherwise expiring on May 4, 2016 for MTel and Telenor and on October 8, 2014 for Vodafone have been extended and harmonized until April 7 and 8, 2022, respectively.
MTel was required to pay HUF 34 bn of the HUF 100 bn the state was to collect from the extension. This sum was the result of tough negotiations, 444. hu said.
In exchange for this “deal" the government also asked MTel to either reign in Origo or let it go. A senior government official confirmed that the agreement included expectations concerning Origo. This negotiation took place between Günther and Lázár, it added.
Several other unnamed sources confirmed that they had held talks even before Günther came to Budapest, and that Lázár presented a list of conditions he wanted to be met in exchange for the mobile frequencies. He also handed over a 150-page study containing detailed analysis on the news of hirado.hu and origo.hu, which came to the conclusion that compared to the site collecting the reports of the public media origo.hu is an opposition site of dramatic proportions. This study has later become a reference document within MTel.
The loss-making media business that does not even fit into its profile is of no importance for MTel, especially compared to its mobile segment. That is why the board headed by Kerstin Günther also attempted to persuade Origo Zrt. to try and make the editorial listen to political requests so that this “opposition status" would not be a hindrance to other businesses.
There was another key event at the end of 2013, namely that sale and marketing director István Kozári left Origo and sales issues were taken over by CEO Miklós Vaszily.
The business managers of the market leader portal have been ailed for a long time by the fact that the government’s online advertisement expenditures were directed predominantly to rival website Index.hu. Back in 2008, Origo received the biggest share of the state’s digital advertising spending. It accounted for 34.6% of all such expenditures that year, whereas by 2012 the Central European Media Partners (CEMP), the owner of Index (and Portfolio.hu among others) had a 58.2% share. 444.hu referred to a report by Mérték - a watchdog and think-tank dealing with media policy issues - on the state’s advertising spending between 2008 and 2012 when saying that such a huge change was not justified by market developments.
In the last months of 2013, Origo.hu’s position began to improve in this respect too. IMG, the agency in charge of the government’s digital advertising budget started to spend money at Origo more often. IMG and by extension the Hungarian government became an important advertising client.
"[...] we should do something about RTL Klub and Origo"
As the business relations between the government and MTel, and therefore the government and Origo Zrt. kept improving, company executives increasingly thought that if a problematic article is published, the telco's entire business in Hungary may be endangered, The company attributed economic consequences to political complaints. Criticism of the content was understood as blackmail in disguise. When Máthé, brought news about Lázár or somebody else being sad, it meant that something was wrong with an article, a scandal had broken out, and journalists should take care not to let something similar happen again.
In 2013 editors at Origo.hu received such messages ever more often and with ever greater severity. They could feel in more and more cases that political discontent should be considered seriously, 444.hu said.
Recently Lázár stated in government circles that “we should do something about RTL Klub and Origo".
Lázár has never hidden his aversion to RTL, for instance on Wednesday he said that RTL Klub is a threat to the country.
"[...] RTL is threatening the country’; it is blackmailing the viewers and the politicians. It would be best if it practiced this at home, in Germany, rather than in Hungary," Lázár said referring to how the broadcaster reacted to the plan of a new advertising tax.
In his view RTL as a large international media company must bear a much bigger share of public burdens than before.
Notwithstanding, in most cases Origo.hu’s editors did not change their journalistic standards. According to most journalists at the website Sáling was ousted because Origo Zrt.’s executives became fed up with this and wanted political requests at last implemented by the editors.
Nothing may represent this embrace better than what Lázár announced at his parliamentary hearing early on Wednesday afternoon, one day after Sáling had been dismissed. Origo’s owner, MTel and the Hungarian government will launch a joint development project worth hundreds of billions of forints.
Press freedom at risk
Since coming to power in 2010, Orbán's government, re-elected in April, has often been accused of trying to curb press freedom, particularly since setting up a powerful new regulatory authority and centralising public media.
The latest attempt in this regard was a bill submitted to Parliament on a new advertising tax that would be payable as a proportion to revenues with rates up to 40%.Both TV2 and RTL, Hungary’s two largest commercial television channels, have objected to the cabinet’s plan to impose a hefty advertising tax on media companies. RTL said it was "shocked" to learn about the bill submitted to Parliament, adding that about half of the tax obligation would burden the company. TV2 said the approval of the bill would have "unforeseeable consequences" for media companies, especially on the TV sector and on TV2.Lázár said on Wednesday revenues collected from the levy will be fully spent on children, more specifically on the development of schools and the modernisation and expansion of educational institutions. He also made other harsher remarks that are unlikely to be the magnet for foreign capital.Hungary’s Constitutional Court ruled late last month that the content provider of any website can be held responsible for comments infringing other persons’ rights even if it was not aware of the infringing content, regardless whether the content in question was removed at once at the requests of the aggrieved party.
