The Difficult Birth Of A Free Press   

Entrepreneurs in Hungary face severe obstacles in establishing independent media companies.

In many ways, Janos Havasi was typical of the new breed of Hungarian publishers who started privately owned newspapers after the fall of communism. Havasi, 41, was a professor of political science at Janos Pannonius University in the old southern Hungarian city of Pecs. He always opposed the Communist Party, but he kept his views to himself to hold onto his job in the 1970s and '80s.

When the Communist regime fell in 1989, making it possible for dissidents to speak more freely, Havasi was one of the first to found a newspaper. By the spring of 1990, he had acquired an office, hired a small staff, and contracted with the state to print and distribute his new weekly, A Helyzet (the Situation).

A tabloid with conservative design and attractive typography, A Helyzet was printed on good paper stock. But there was no news in it. The articles were all essays, mostly written by Havasi, with some short fiction and even poetry.

There was no advertising, either. Ads, he said, would "commercialize" his publication, cheapening it in the eyes of his readers. He was sure he could find enough customers for his essays to make his paper profitable.

But he also had no plans to promote his publication. He was not in the marketing business. He was a writer and a political scientist. He believed that when people heard about his publication – by word of mouth – they would come running and pay any price.

Not surprisingly, Havasi's "newspaper" is out of business. Most of the other 600 publications that sprouted in Hungary in the first year-and-a-half of relaxed press regulations have met a similar fate.

Havasi's publication, however short-lived, is representative of post-communist Hungarian journalism. In Hungary, as in most of Europe, journalism is often regarded as a political activity. Thus, most Hungarian journalism is not fact-based, nonpartisan or objective. The typical article is an essay, and is usually literary or political.

Advertising is as uncommon as reporting. Under communism, private display advertising was discouraged. Now, many Hungarians still regard Western-style advertising as vulgar, intrusive and exploitative. And there are some who believe it's unnecessary. Equally important, the Hungarian economy is in a recession and there just isn't enough advertising to support the media that already exist.

But not all journalists shun Western-style approaches. There are three other emerging prototypes for independent media in Hungary. The first is the publisher with no background in journalism, as exemplified by Gyorgy Matrai, who founded a now-defunct Hungarian newsweekly. Next is the entrepreneur journalist, such as Tamas Gyarfas, who is trying to launch a private television channel. Finally, there is the American-style journalist, such as Andras Kereszty, the editor of the former Communist Party daily newspaper. All face formidable odds in establishing thriving news operations, but some of them stand a better chance than Janos Havasi.

Empire Builders

Gyorgy Matrai is in his mid-30s, young enough to be free of the old communist mentality, old enough to take advantage of the situation. He graduated from college in the mid-1980s with a degree in chemical engineering, but there were no jobs; the university let him stay on as a laboratory assistant. He taught himself computer programming and began to develop programs in Hungarian. By the time the Iron Curtain came down in 1989, he had cornered the Hungarian software market.

In 1991 he decided to start a weekly news magazine called Kosztarsasag (Republic). He first recruited one of Hungary's leading journalists, Tibor Frenkl-Thurzo, to be the editor in chief, and the manager of the Hungarian Association of Journalists to be his publisher. He then opened a lavishly furnished office and hired a number of Budapest's better journalists to work under Frenkl-Thurzo, including Gabor Szego, then deputy editor of Esti-Hirlap (Evening Journal), a newspaper in serious financial trouble. By May 1992, the first issue of Kosztarsasag rolled off the presses.

Matrai kept Kosztarsasag going for nearly a year, but the magazine was unable to attract enough subscribers or advertising. There just isn't the volume of business yet in post-communist Eastern Europe to support slick and expensive consumer publications. Steadily the issues grew thinner, and the staff dwindled. By the end of the year, Kosztarsasag had ceased publication.

In early 1993 Matrai was in jail. Szego said his former boss had made a deal in Russia for automobiles and took millions of forints (a forint is worth about 11 cents) in down payments. He apparently never delivered the cars.

Unlike post-communist Eastern European journalists obsessed with political essays, Matrai and other new empire builders are only interested in making money. The rush to pornography was the first manifestation of this obsession, but after three years Hungarians are getting bored with skin magazines. A Hungarian edition of Playboy was one of the first new magazines to come onto the scene after the political change. The American company soon sold it to a Hungarian, who paid for the name and the right to continue the format. But the Hungarian Playboy's circulation has been dropping steadily.

Entrepreneur Journalists

One journalist turned businessman who seems likely to survive is Tamas Gyarfas, who started his career as a sports reporter. Gyarfas became the publisher of a sports newspaper and owner of a restaurant. He then saw the need for a telephone yellow pages, even though as of two years ago less than 20 percent of Hungarian homes had a phone.

Nearly every household, however, has a television – a key instrument of propaganda under communism. Now that there is more programming, a television guide is a popular item. So Gyarfas bought a guide from one of the failing Hungarian newspapers.

But Gyarfas hopes to make his millions in broadcasting, so he sold his restaurant and television guide last year. Before last fall there had been a government moratorium on the development of private broadcast stations. That meant the government still had a monopoly on radio and television, one of the few such left in Eastern Europe. Gyarfas nevertheless got into the business through finagling and good fortune.

It started with his sports newspaper, which led to a sports television show, for which he built a production studio. In 1990 he started producing a morning magazine show modeled after ABC's "Good Morning America." It was called NAP-TV, which means Sun TV. He "rented" air time from the government, which operates the only two Hungarian channels.

NAP-TV quickly became one of the most popular Hungarian programs. Gyarfas hired Ference Szekely, a former movie newsreel journalist, as his editor in chief. Gyarfas, Szekely and their team put together a magazine show that seemed hard-hitting, interesting, critical of government mistakes, and candid – all things for which Hungarian television was not well known.

Gyarfas rented space for NAP-TV in a building owned by the Hungarian state munitions monopoly, and when that organization went bankrupt, Gyarfas bought the building. He wrangled a radio license from the city government of Budapest. Even though the station's range and hours on air are extremely limited (it can only be heard well in its district and can only broadcast eight hours daily), it nevertheless puts Gyarfas in line for major radio expansion when true privatization comes to broadcasting.

A major reason the Hungarian government has kept the moratorium on private broadcasting until now has been fear of media influence, especially the power of television. The first post-communist government has not fared well since its election as a coalition of parties in the spring of 1990, and it has been widely criticized by the Hungarian print press. (The government is quick to point out that the journalists who are critical are the same ones who were slaves to the party line under communism.) It's generally believed that the national coalition cannot hope to be reelected this spring unless it maintains its broadcast monopoly.

The government has already attempted to drive Gyarfas out of business. A government-owned bank, Postabank, which held much of the stock in NAP-TV, pressured Gyarfas to sell his shares. Aided by an infusion of capital from Japan's Fujifilm, however, Gyarfas was able to buy out Postabank and retain control.

Meanwhile, the government was pressing officials of its own monopoly, Magyar Radio and Magyar Television, to better reflect the state's positions. In December 1992 the government brought broadcasting under tighter control by firing the presidents of its television and radio divisions. Later it dropped all but one news program.

The government then shifted its sights to NAP-TV's morning show, seen by some officials as too irreverent and too critical. The government cut the program from three to two hours and moved it from the national channel to the one serving only Budapest. In response, NAP-TV started to soften its criticism of the government. The show dropped one of its tougher reporters, Henrik Havas, and replaced him with two women reporters who have been characterized as "easier."

Last summer the government moved NAP-TV back to Channel 1 and restored it to its original length. But there has been much dissension among the NAP-TV staff. Some charge that the program succumbed to political pressure.

Yet Gyarfas' strategy probably gives him the best chance of getting the first private TV channel, which would be worth tons of influence and tens of millions of dollars. If that happens, Gyarfas can redeem himself. If he gets the big private station and makes it into a balanced medium of news, he'll be able to say that he allowed himself to be defeated in battle with the current government in order to win the larger media war.

American-Style Journalists

Perhaps the most "American" journalist among post-communist Hungarians is Andras Kereszty, a big teddy bear of a man. He spent five years in the United States in the 1980s as the Washington correspondent for Nepszabadsag (Freedom of the People), the Communist Party newspaper.

During his five years in Washington, Kereszty came to appreciate the role and methods of journalism in a democratic, capitalist country. He traveled widely in the United States and spent time with top Washington reporters, soaking up their ideas, philosophies and techniques. His return to Budapest coincided with the end of communism; he became Nepszabadsag's managing editor and vowed to bring a new journalism to Hungary.

Nepszabadsag was the party newspaper. As such it had the largest circulation among Hungarian dailies. There are 12 daily newspapers in Budapest alone and another 21 around the country. At its peak, Nepszabadsag had a circulation of nearly 900,000; now down to 360,000, it's still the leading daily.

Of course, there is no way a city of 2 million can support 12 independent dailies. Many of them are not really independent – they're subsidized by the government or published by an organization – but Nepszabadsag comes close. It no longer gets any subsidy from the government or the Communist Party.

It does have foreign investors. Bertelsman, a German media company, and a North American investment fund control two-thirds of the paper's parent firm. But it has almost total autonomy.

Kereszty insisted on developing a newspaper that stresses news rather than opinion and has tried to separate the two. Thus far he seems to have been successful, thanks to the reporter training program he instituted in 1990. He and his publisher, Miklos Breitner, also were anxious to adopt Western techniques of promotion, distribution and advertising sales (see "A Hungarian Publisher Takes Home Some Tips," Free Press, November 1993). As of last year the paper was well on its way to becoming a truly independent medium of objective news, with growing advertising support and a strong subscriber base to ensure its success even in a depressed economy.

Other Budapest dailies are in serious trouble. One of them, Uji Magyarorsag (New Hungary), is an official government newspaper and not taken seriously. Nepszava (Speech of the People), a trade union newspaper subsidized by union dues, probably will not survive. Mai Nap (Today), an independent tabloid, is doing so poorly that Australian media magnate Rupert Murdoch sold his 50 percent share back to the Hungarian government last summer. Magyar Nemzet (Hungarian Nation), partly owned by a French investor, also is losing money.

The only paper besides Nepszabadsag that has a chance to succeed is Magyar Hirlap (Hungarian Journal), but it currently has a circulation of only 60,000 and will need many more readers to survive.

Without much competition, Nepszabadsag could become the New York Times or Washington Post of Hungary. But Kereszty resigned last summer to start his own weekly, a business publication called Griff (Griffin) that debuted last July. Nepszabadsag will survive Kereszty's departure, but his absence might slow down the paper's move toward Western-style journalism.

Kereszty, who has invested tens of thousands of dollars in Griff, is trying to bring financial news to what is hoped to be a growing middle class. But like Janos Havasi and so many other Hungarian journalists, Kereszty appears to be more interested in ideas than business.

Many observers say Kereszty didn't do enough market research before launching his new publication. They may be right: By early fall Griff was already showing signs of a premature demise. To compound his problems, Kerezsty may not have done enough homework even on the name of his paper. Three other companies have claimed the rights to the name "Griff."

If he loses out, it will be yet another blow to the dreams of independent journalism in post-communist Hungary. l